The 2016 US elections and what they mean for marijuana startups
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BERKELEY, CA - MARCH 25: One-ounce bags of medicinal marijuana are displayed at the Berkeley Patients Group March 25, 2010 in Berkeley, California. California Secretary of State Debra Bowen certified a ballot initiative late Wednesday to legalize the possession and sale of marijuana in the State of California after proponents of the measure submitted over 690,000 signatures. The measure will appear on the November 2 general election ballot. (Photo by Justin Sullivan / Getty Images Israel)

7 states approved new marijuana laws, but could a Trump Administration roll them back?

Legal marijuana sales in the US are predicted to come to $6.7 billion by the end of the year, and over $10 billion in 2018, according to Fortune, and there are now several new states in the US where the cultivation and distribution of the drug will be legal. (It is still among the most restrictive class of narcotics under federal law.)

As the country went to the polls to choose its next president and dozens of Congressional seats, seven states also voted on recreational marijuana use and decided in favor of it: Arkansas, California, Florida, Maine, Massachusetts, Nevada, and North Dakota. Additionally, Coloradans defeated a ballot measure to close down some of their own recreational markets. Below, we look at those legal decisions, and what might happen with them now that President-elect Donald Trump is set to take office in January 2017.

Given his state drug policy positions, likely cabinet appointees, and conflicting donor agendas, it is as-yet unclear what his election means for the industry and the states, except that he is unlikely to touch medical marijuana laws.

Arkansas

The Arkansas Medical Cannabis Act passed this week, legalizing dispensary sales. The state legislature will now decide on exactly what types will be permitted. It will still be illegal to grow your own marijuana there, though. As in other states, the taxes collected will be allocated across a variety of agencies and funds, including the Department of Health and the Alcoholic Beverage Control Division.

It is somewhat ironic these two agencies will benefit, though, as public health departments and the alcohol lobby are at the state and national level generally opposed to any form of recreational use.

California

Proposition 64 was heavily funded by Napster founder Sean Parker, who poured $8.5 million the getting the measure approved. Unlike a previous effort in 2010, this one succeeded and raised $16 million in total. (Medical marijuana was previously legalized in 1996.)

There will be two tax structures on both retail and cultivation, with legal use starting at age 21 and 1-ounce possession permissible. The money will go towards supporting new addiction and law enforcement measures for drug use, as well as academic research.

There is another Silicon Valley connection here, though, and it is in the Trump camp. Republican donor Peter Thiel, co-founder of PayPal and the President-elect’s only big-name tech donor, backed Proposition 64 as well. Unlike some of Trump’s deep-pocketed donors, he is very pro-legalization. Thiel has even participated in a $75 million Series B for the marijuana equity firm Privateer Holdings.

This sets Thiel apart from another major Trump donor, Sheldon Adelson, who gives heavily to anti-legalization campaigns nationwide.

What, if any, influence either man has on Trump’s marijuana policy is unknown.

Colorado

Colorado legalized recreational use of marijuana in 2012 when Colorado Amendment 64 passed, though only about a third of the state’s counties and municipalities have gone ahead and let retailers set up shop. There has been a backlash in some counties against growers and sellers, though. This election, the most serious rollback effort yet – to close 100 pot-related businesses – lost.

This is good news for Colorado’s pot industry because last year, sales totaled over $996 million for medical and recreational use, split about 59-41. The total state tax take was $135 million, a good portion of which will be used for school construction.

As elsewhere, the minimum age is 21 and the maximum possession amount at an ounce.

Florida

The Florida Medical Marijuana Legalization Initiative succeeded where previous efforts had failed, succeeding despite heavy lobbying both in and out of state against it. The measure expands the number of conditions doctors can prescribe cannabis for, as limited “compassionate” use was instituted a year ago.

One of Trump’s potential appointees as Attorney General, Pam Bondi, has been a vocal opponent of medicinal legalization in the state, and helped kill the 2014 initiative. Though her office did not block the 2016 Florida initiative, as it did in 2014 when it failed by only a few thousand votes, her personal position has stayed constant.

Until Nevada pushed its own legal weed ballot initiative, Adelson spent most of his lobbying efforts in support of Bondi and her confederates’ blocking efforts in Florida, $6.5 million in total, including another $1 million this cycle.

Maine

Maine’s Marijuana Legalization Measure only just squeaked by with less than a single percentage point, or less than 3,000 votes. Opponents have not conceded and vow to fight the measure, which has proven extremely controversial. Medicinal marijuana was legalized in 1999, but it took 17 years to advance beyond that as multiple efforts failed in the interim.

If the lead holds and the opposition concedes, anyone 21 years and up would be allowed to possess up to 2.5 ounces of pot, and practice home cultivation.

Maine could actually be the state that precipitates the incoming Trump Administration to take federal action on legal weed, since the state’s governor, according to the Portland Press Herald, “will ask … if Trump’s administration will enforce existing federal law against marijuana possession before deciding whether he will file a legal challenge” in Maine itself.

Massachusetts

The Massachusetts Marijuana Legalization Initiative follows the pattern many other states have, moving to decriminalize recreational possession for adults and set up tax structures to begin moving forward on a fund to enforce the new law and channel money to other areas beginning next month.

Medicinal dispensaries opened in 2012, though as the Marijuana Policy Project notes, there are still only a handful doing business. Officials are asking for a delay in opening shops in 2018, though, to allow for more law enforcement prep time to handle any issues that may come up.

As in Florida, Trump donor Sheldon Adelson spent $1 million lobbying against the initiative.

Nevada

The Nevada Marijuana Legalization Initiative follows the 2000 campaign that legalized medicinal use. Anyone over the age of 21 can now grow up to 6 plants for personal use, and quotas have been set on how many retailers can exist in any single county. A 15% excise tax will accompany such sales.

Although the alcoholic beverages lobby usually comes out against recreational use, in Nevada, the legalization camp secured a buy-in from alcohol distributors by offering them choice terms. Heavy opposition came in part from Republican megadonor Sheldon Adelson. Adelson spent $2 million against the initiative Nevada and his newspaper, the Las Vegas Review came out against the campaign. Despite this, the new law goes into effect January 1, 2017.

North Dakota

The North Dakota Medical Marijuana Legalization Initiative will allow medical dispensaries to sell prescription pot to residents with chronic illnesses, or, depending on distance from doctors’ offices or dispensaries, let patients grow their own.

Vocal opposition from the state medical association did not dent support, as the measure won by a 2:1 margin. This was surprising, since previous efforts in 2015 failed by similarly wide margins in the state legislation. And unlike other states, the amount of money raised in support was miniscule.

Proponents of the initiative caution, though, it will take up to a year to get the first dispensary overseen by the health department up and running. The state government also says funds are not available at present.

Trump’s position unclear

In total, there are now 28 states plus the District of Columbia where some form of marijuana use is legal or soon to be legal. But now there is the question of what President-elect Donald Trump will do. His campaign did not issue any formal statements on the matter, and his transition team has yet to do so either.

Trump did go on FOX in February to say, “medical: I’m in favor of it a hundred percent” while registering skepticism on recreational legalization. Earlier, in 2015, he also said he was in favor of medicinal marijuana “100%” and that, “I really believe we should leave it up to the states” when it came to legalization, though said he didn’t think it was working out in Colorado in terms of recreational use.

Should the federal government allow the states to keep voting on the matter, and should momentum carry forward in the legalization camp’s favor, a “mature” industry could add tens of billions of tax revenue to federal, state, and local coffers, according to the Tax Foundation. This would be consistent with his earlier positions, as he advocated legalization and taxation of pot beginning in the 1990s. Such a policy would also carry forward the Obama Administration’s policy of de-emphasizing prosecutions for possession to focus instead on combating trafficking.

Uncertainty thus arises from Trump’s lack of a formal policy position, and also his possible picks for Attorney General. These include people strongly opposed to most, if not all, paths to legalization in any form. Of those in the running, New Jersey Governor Chris Christie and Florida Attorney General Pam Bondi have been able to dictate state policy before.

As noted above, Bondi has led the charge against medicinal marijuana in Florida. And although Christie’s home state does have medical dispensaries, in 2015 he said that if he was elected president he would force states to suspend recreational use. Senator Jeff Sessions of Alabama, who alongside former New York City Mayor Rudy Giuliani was named as a choice for Attorney General, are big critics of legal weed as well.

With respect to the enforcement side, Trump and the Republican-controlled Congress will be able to appoint new heads to the Drug Enforcement Agency, Food and Drug Administration, the FBI, and Office of National Drug Control Policy, AKA the White House drug czar. But if Trump wants to rollback legalization, he probably won’t need to appoint any new people to these agencies to get bureaucratic support for it. Of the incumbent directors, all are either skeptics or opponents of legalization. And while the current Surgeon General is alright with some medicinal applications, Trump will be able to appoint a new one in 2018.

It is also unclear how a Trump Administration would approach decriminalization, as 19 states plus the District of Columbia have replaced prison time with fines for pot possession.

In the meantime, many of you can legally check out the following marijuana tech list from Product Hunt. They also recommend Meadow, the “Uber for weed,” LEVO, the “Keureg for cannabis infusion,” High There, the “Tinder for cannabis lovers,” and Merry Jane, the “VICE for the cannabis lifestyle.”

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