REEFERENDUM
With Michigan voting to legalize adult use, its neighbours could soon follow suit,
NEW YORK— The legal U.S. cannabis market just got a little greener.
In midterm elections that saw Democrats gain control of the House and reaffirmed Republican control of the Senate, more states also voted to legalize marijuana. The outcome will help expand a U.S. pot market that could be worth $75 billion (U.S.) by 2030, according to an estimate from Cowen & Co. Pot stocks, led by Tilray Inc., surged on the news.
Michigan became the 10th U.S. state — and first in the Midwest — to legalize recreational pot. Sales there, estimated to start in 2020, could grow to as much as $1.7 billion in the coming years, according to the trade publication Marijuana Business Daily. The total legal U.S. market is expected to hit about $11 billion in sales in 2018.
With Michigan voting to legalize adult use, neighbours like Ohio and Illinois could soon follow suit to help build a market in that region, according to Ken Shea, an analyst at Bloomberg Intelligence.
“Michigan can act as an anchor,” he said. “You could get a cluster effect.”
Long demonized as a dangerous drug, and still considered an illicit substance with no medical use by the federal government, marijuana is increasingly going mainstream as investors pour billions into the industry. Cannabis is now legal across Canada, and U.S. firms are rushing north of the border for public listings and to access capital markets. In the U.S., meanwhile, the steady creep of legalization has companies buying up licenses and expand- ing operations.
In addition to the recreational market, more states are embracing medical marijuana. Missouri became the latest state to allow medical use, while a proposition in Utah also appeared poised to pass as of Wednesday morning.
Still, not all states were ready to follow Canada’s lead: North Dakota’s ballot measure to decriminalize marijuana failed. More than 60 per cent of Americans support making pot legal, but with cannabis still illegal on a federal level, the politics remain fraught. Cannabis stocks gained Wednesday, led by Tilray and Cronos Group Inc. Tilray, the largest publicly traded pot stock, gained as much as 9.3 per cent, while U.S.-listed shares of Cronos rose as much as 6.6 per cent. Aurora Cannabis Inc. and Canopy Growth Corp. gained as well.