2022 has been a rollercoaster of a year for the cannabis industry. On the upside, several states have passed legislation to either permit adult use or permit a medical marijuana program. Federally, simple possession cannabis offenses have been pardoned and legislation was passed to allow for research into cannabis. On the downside, the industry has been in a slump as the market gets more crowded and investor streams are drying up.
Below is a breakdown of some of the biggest changes in the industry this past year.
State Legalization of Cannabis
Cannabis was on the ballot in five states this past year, but Maryland and Missouri were the two to allow legalization.
In Maryland, the adult use measure passed by two thirds of voters. Beginning on July 1, 2023, adults 21 and older may possess and consume 1.5 ounces of cannabis flower, 12 grams of concentrated cannabis, or a total amount of cannabis products that does not exceed 750 mg THC. The law established a process for expunging all cases in which possession of less than 10 grams was the only charge and is decriminalizing possession up to 2.5 ounces. The law also created three new funds to address socio-economic disparities in relation to previous cannabis enforcement.
In Missouri, the ballot measure passed with 53 percent of the vote. Beginning in February, recreation marijuana will be available for those 21 and older. The law also allows for those convicted of nonviolent marijuana related crimes to petition for parole or release and have their records expunged.
Though not on the ballot, Rhode Island passed the Rhode Island Cannabis Act, which like in Maryland and Missouri legalized possession of marijuana and created the review and expungement of past criminal records.
Alabama and Mississippi started working on the rollout of their medical marijuana programs. As of December 2022, Alabama has received and will start to review applications for medical marijuana licenses. In Mississippi, medical dispensaries are beginning to open across the state.
Federal Cannabis Actions
On October 6, 2022, President Biden issued a proclamation that pardoned individuals who had federal convictions for simple marijuana possession offenses. This proclamation is limited to federal and DC code offenses, but President Biden did urge governors to do the same. The proclamation also included asking HHS and the Attorney General to review marijuana scheduling. An October blog discusses what could come from this proclamation. President Biden also signed into law The Medical Marijuana and Cannabidiol Research Expansion Act on December 2,2022, which allows for scientific and clinical research of marijuana.
Cannabis Market Declines
The spike in cannabis sales from the pandemic showed signs of a slowdown. In established markets such as Oregon, Washington, and Colorado, sales at both retail and dispensaries have declined since 2021. Some are blaming competition from the illegal market, but others say that inflation and the return to "normalcy" are major factors. Additionally, as markets began to grow, especially in new states, investors are starting to tighten their funding streams. Many were hoping that federal legislation in regard to banking or rescheduling marijuana would pass, but that hasn't occurred yet. Though the cannabis market is in a slump, there seems to be hope in the long term as sales are projected to reach 52.6 billion in 2026.
New York and New Jersey Rollouts
New York opened its first adult-use cannabis dispensary, and the New York Cannabis Control Board is continuing to issue more cultivation, processing, and dispensing licenses. Many of these licenses are being provided to people who have been harmed by marijuana criminalization and non-profit organizations. Additionally, the New York Cannabis Control Board has issued guidance to help regulate this new and growing industry.
New Jersey has opened 21 recreational dispensaries in 2022 and has seen sales exceed over $100 million in the third quarter. New Jersey has had a bit of a slower rollout for social equity investment, but New Jersey Cannabis Regulatory Commission has been holding hearings to get public input on how to invest the social equity fees raised from legal marijuana sales.
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