Weed on the ballot: The cannabis industry sifts through Tuesday's mixed results

During Tuesday’s elections, five states considered cannabis alongside their candidates.

Voters Maryland and Missouri both voted "yes" and legalized recreational marijuana. Arkansas, North Dakota, and South Dakota voted no and opted to keep recreational pot illegal — though it remains allowed in all three of those states for medical use.

But even with the mixed results, marijuana advocates were touting their wins Wednesday morning pointing to the fact that recreational marijuana is now set to be legal in 21 states and the District of Columbia. There were also victories on other fronts in this year's voting.

The big picture is that “the marijuana economy pie is growing” says Brian Vicente, the founder of a law firm focused on cannabis companies called Vicente Sederberg, Wednesday after most of the results come in.

“It’s sort of a matter of when, not if, these states move forward,” he added about Tuesday's losses. He predicts that advocates will continue to put the issue before voters in the coming years. Up next is Oklahoma, which is set to hold a special election on legalizing recreational marijuana in March.

Proponents in the industry will also be keenly focused on Washington. Specifically, there are rumblings that long-delayed legislation may become reality that would address problems cannabis companies have finding banking services.

Full results from Tuesday

Tuesday’s votes in Maryland and Missouri don’t make marijuana legal immediately, but instead create a blueprint for state officials to set up a recreational cannabis industry in the coming months or years. In Arkansas, early polling had shown a strong support for passage but a follow-up from a University of Arkansas political scientist found that support faded on the issue closer to election day.

But the industry notched other wins in Tuesday’s voting. The decisive victory of John Fetterman in Pennsylvania’s closely-watched Senate race was a win for the proponents of the industry. The Democrat has long been an outspoken advocate for federal cannabis legalization and made it a key issue in his successful campaign saying it’s time to “let go of this bizarre superstition and criminalization of a plant.”

The overall result "was mixed to slightly positive" for the industry, BTIG Director of Policy Research Isaac Boltansky said Wednesday in a Yahoo Finance appearance adding that Pennsylvania could be next in line for legalization of recreational marijuana after the election of Josh Shapiro as governor there.

Elsewhere in the country, 5 Texas cities voted on municipal ballot initiatives to de-penalize marijuana possession and a range of other local measures across the country are still coming in with mixed results so far.

And another drugs measure appeared to be making headway in Colorado. As of Wednesday morning, voters there were looking likely to decriminalize so-called magic mushrooms with votes still coming in. Colorado, which has long been a leader on decriminalizing marijuana, could join Oregon and become the second state to decriminalized certain psychedelic plants and fungi for people over 21.

“It’s a remarkable milestone in the slow end to the drug war that we’re watching,” says Sederberg of Tuesday’s results in Colorado and around the country.

What's Next?

And the news at ballot box around the country comes amid new steps from Washington DC on the issue.

In early October, President Biden announced actions to use his executive power to further decriminalize marijuana and offer a pardon for prior Federal offenses for simple possession. Meanwhile on Capitol Hill, ta long delayed action on the issue of cannabis and the banking sector may finally be addressed.

The bill, called the SAFE Banking Act, has passed the House of Representatives a whopping seven times, only to die in the Senate. But Senate Majority Leader Chuck Schumer (D-NY) recently gave advocates new hope when he said Congress is getting “very close” to finding consensus on a marijuana bill that would include a range of provisions, including banking.

The banking provisions are meant to address the fact that cannabis is still illegal at the federal level; the bill would bar regulators from punishing financial institutions for providing services to a "legitimate" cannabis-related business. It has long been a key cause for retiring Rep. Ed Perlmutter (D-CO) and he recently told the Hill newspaper that there’s “a lot of activity” around the effort at the moment.

In the past, the cannabis banking efforts have been blocked by Senate Democrats who are eager for a broader bill with Sen. Cory Booker (D-NJ) in the past vowing “lay myself down” to block efforts to pass the marijuana banking legislation before larger cannabis reform. But the recent signal from Schumer is heartening activists. They think a consensus bill could be in the offing—Booker recently said there’s a “good chance” Congress will be able to reach a deal soon.

While polls have consistently shown that there is widespread support for federal marijuana legalization, the immediate term prospects of decriminalizing it at the federal level remain unclear. Lawmakers are still working to find a coalition of Democrats that can ally with Republicans, who are increasingly beginning to talk about legalization as well.

This post has been updated.

Ben Werschkul is a Washington correspondent for Yahoo Finance.

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