Legal cannabis is off to a roaring start in Canada, of course, but the next flood of big-gain potential will come to us courtesy of folks south of the border.
That’s because today, voters in Colorado, Michigan, North Dakota, Utah, Missouri, Ohio, and Wisconsin will head to the polls to vote on no less than 36 major cannabis reform ballot measures.
Now, any one of these could catalyze tremendous pot-stock gains virtually overnight because, as we’ve seen time and again since 2014, “when laws pass, stocks soar.”
But I’m most excited about the biggest of them…
Change Is in the Cards Across the Country
In Ohio, voters in six cities – Dayton is the biggest one – are deciding on whether to decriminalize cannabis. If passed, these initiatives would reduce the penalty for misdemeanor marijuana offenses to the lowest penalties allowed by law.
And in Wisconsin, voters in several counties are deciding whether to legalize medical marijuana. Other counties are voting on full adult legalization.
In Colorado, one of the nation’s most important “adult use” markets, voters are deciding on an amendment that would redefine industrial hemp so it aligns with the federal definition. If it passes, Colorado farmers would be at a huge advantage – and continue to lead the country’s hemp industry. Right now, Colorado produces half of the hemp in the United States.
In Utah and Missouri, citizens will be voting on whether to legalize medical marijuana. Both these states sport deep red, profoundly anti-marijuana electorates, so these two, specifically, are monumental votes, testing exactly how mainstream legal cannabis has become.
And finally, Michigan and North Dakota voters will be deciding on adult-use recreational marijuana. The proposed laws would not only legalize the sale of certain amounts of marijuana, but also change how law enforcement prosecutes marijuana drug infractions. In some cases, the violations would be changed from criminal to civil; in others, marijuana convicts’ records would be expunged entirely.
Six of the seven states will also be voting on taxes and other legal cannabis regulations. For example, Michigan and North Dakota are looking to enact marijuana laws and taxes that would mimic those of alcohol sales.
So what does this mean for the states that are looking to legalize? Fortunately, we have a pretty good example to look at as a jumping-off point.
The Centennial State Gives Us a Road Map
When Colorado legalized marijuana, it raked in $70 million in tax revenue annually. Michigan’s population is twice the size of Colorado’s 5 million residents. So, if it follows a similar tax plan, Michigan is, in theory, looking at as much as $140 million in annual tax revenue if its ballot initiative passes.
North Dakota is also looking to go fully legal, but its population is much smaller than Colorado’s. It’s home to just 750,000 people, but even that many could generate up to $10 million in tax revenue per year.
Wisconsin, meanwhile, has roughly the same population as Colorado. So it could generate just as much tax revenue through cannabis tourism, medical marijuana, and recreational legalization.
And these numbers just reflect the beginning. Today, Colorado nets about $247 million – a 250% increase from since it went fully legal – in taxes and other fees.
If even a few of these states pass laws, they’re looking at a massive influx of cash… and that’s just in taxes, which go right to the state to help improve things like infrastructure, roads, and schools.
And these election results also will bolster the bottom line of the best cannabis firms – the sort we talk about here all the time.
That will, in turn, lead to higher share prices.
Because, again, “when laws pass, stocks soar,” and we’re looking at as many as 36 passing by the time polls close tonight.
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Source: Money Morning