2020 election updates, analysis & highlights

Marijuana Business Daily reporters and editors are providing live coverage of the 2020 general election, focusing on legalization ballot measures in five states as well as key federal races that could affect MJ reform.

Scroll down for updates our staff has filed about the states voting on marijuana-related proposals as well as potentially pivotal U.S. congressional races in addition to the presidential vote. Click here for the current results tally on key state initiatives.

You can also get up-to-date insights on state ballot initiatives and all things Election 2020 for cannabis at MJBizCon. We start with Election Week.

(All entries are in Eastern time.)

3:20 a.m. (South Dakota)

South Dakota made history, becoming the first state to legalize both medical and adult-use during the same election.

Measure 26, the medical marijuana ballot measure, passed with 69% of the vote. Amendment A, the adult-use marijuana ballot item, passed with 53.5% of votes and 90% of precincts reporting.

“No state has ever moved from marijuana prohibition to allowing both medical use and adult-use access, quite literally, overnight,” NORML Executive Director Erik Altieri said.

“These votes are a stunning rebuke to those elected officials that for decades have refused to move forward with substantive marijuana law reform legislation.”

Both ballot issues will become law July 1.

– Kate Lavin

2:04 a.m. (Montana)

Montana voters legalized recreational marijuana, creating a program that will limit business participation to residents of the state.

The state is the 14th to legalize adult use.

The yes vote on Initiative 190 is projected to create $217.2 million in sales in the first year and reach $234 million by 2024.

Aside from the Montana residency requirement for business owners, other key business details include:

Existing medical cannabis operators would get a 12-month head start.
Prospective MMJ companies wouldn’t face a license cap.
The business license application process would start by October 2021.
The impending adult-use market could be a success. While Montana is one of the least populous states at only 1.1 million, its medical marijuana program is booming compared to other markets.

Forty out of every 1,000 Montanans are patients in the state’s MMJ program, whereas Alaska and North Dakota report less than five out of 1,000.

Moreover, Montanans also use cannabis more than the national average.

The 2019 National Survey of Drug Use and Health reported that 14.3% of the state’s adults used marijuana in the previous month, compared with the national average of 9.3%.

– Bart Schaneman

1:45 a.m. (National)

Joni Ernst

Republican U.S. Sen. Joni Ernst of Iowa defeated Democrat Theresa Greenfield, reducing the odds that the Democrats would flip the Senate.

There were 35 Senate races this year, including 15 considered competitive that could result in flips.

Ernst supported the legalization of hemp, but she opposed medical marijuana legalization, cannabis banking reform and prohibitions on federal interference in state programs.

Had Ernst lost and control of the Senate tilted in favor of Democrats, the business outlook for cannabis companies could have been significantly different this time next year.

Industry insiders say a Democratic-controlled Senate is important for getting cannabis banking reform, eliminating Section 280E of the federal tax code and rolling back federal prohibition of marijuana, among other things.

For instance, cannabis banking reform passed the U.S. House of Representatives last year with bipartisan support but stalled in the Republican-led Senate banking committee.

– Bart Schaneman

1 a.m. (South Dakota)

South Dakota voters legalized medical marijuana, making it the third state to pass a cannabis legalization initiative in this election.

A separate ballot measure to legalize a recreational marijuana market was leading in the polls.

State residents favored creating the medical marijuana market outlined in Measure 26 by a margin of 69% to 31% with 84% of precincts reporting. The Associated Press called the race.

“South Dakotans sent an unequivocal message in support of allowing patients the ability to legally access it under the advice of their physician,” NORML Executive Director Erik Altieri said in a statement.

“When operational, this program will provide lab-tested medical cannabis products to thousands of South Dakotans who can benefit from them. These patients cannot wait, and voters were right to take action to make this access a reality.”

At 12:45 a.m. ET, Amendment A, which would create an adult-use marijuana market, was leading with 52.9% of the vote and 84% of precincts reporting.

– Kate Lavin

11:45 p.m. (Arizona)

Voters in Arizona legalized recreational marijuana by passing Proposition 207 four years after a separate adult-use initiative suffered a narrow defeat, according to several news outlets, including The New York Times.

This is welcome news for the 130 medical marijuana businesses in the state. Existing MMJ operators will automatically win entry into the adult-use market.

The state is also expected to award 26 social equity licenses, and retail marijuana sales face a 16% tax.

The passage of Proposition 207 means the state of 7.3 million people will be looking at an adult-use market with projected first-year sales of $375 million-$400 million and up to $700 million-$760 million in 2024, according to Marijuana Business Daily.

The overall number of business licenses will be tied to the number of pharmacies operating in Arizona as well as the locations of existing MMJ businesses.

Proposition 207 calls for one vertically integrated marijuana company for every 10 pharmacies and allows for additional adult-use cannabis business licenses to be issued in any county that has fewer than two existing MMJ operators.

Additional business permits will also be available as the state’s population grows.

– Bart Schaneman

10:30 p.m. (National)

Lindsey Graham

Republican incumbent Sens. Lindsey Graham of South Carolina and John Cornyn of Texas won their respective bids for reelection, according to results calculated by the Associated Press.

Democrats had hoped to flip both Senate seats, particularly Graham’s.

Not long after 10 p.m. ET, Graham was leading Democrat Jaime Harrison, 56% to 43%. With 44% of the vote tallied, the AP called the race for Graham.

In Texas, Cornyn was leading challenger M.J. Hegar, 53% to 45%. With 78% of the vote counted, the AP called that race as well.

– John Schroyer

10 p.m. (National)

John Hickenlooper

Incumbent Republican Sen. Cory Gardner lost his bid for reelection to former Colorado Gov. John Hickenlooper, according to results tabulated by the Associated Press.

The race is the first this year in which the Democrats have flipped a Republican Senate seat.

With 54% of the vote tallied, Hickenlooper was leading Gardner, 54% to 44%, and the AP called the race for the ex-governor.

Gardner, who was first elected to the Senate in 2014 after a stint in the House of Representatives, was seen as a staunch ally to the marijuana industry, who helped convert other Republicans to pro-MJ industry causes such as opening banking access to businesses.

But Hickenlooper, who oversaw the 2014 rollout of recreational marijuana in Colorado, isn’t viewed as an opponent by most industry groups as much as a reluctant supporter. He’s expected to be a supporter of federal marijuana reforms in the Senate.

– John Schroyer

9:50 p.m. (New Jersey)

As expected, New Jersey voters legalized recreational marijuana, the first in what could be a long line of dominoes across the Northeast and even down the East Coast in the coming years.

The New Jersey vote puts pressure on several neighboring medical markets to add adult-use cannabis, including New York, Pennsylvania, Rhode Island and Connecticut. Even Virginia and Maryland could follow suit.

With 8.9 million residents, New Jersey is projected to have recreational sales of $375 million-$400 million in the program’s first year and could reach annual sales of $850 million-$950 million by 2024, according to a Marijuana Business Daily projection.

However, sales are not likely to begin right away, as only 12 MMJ businesses are producing cannabis now. The demand for recreational marijuana is expected to be so strong that if regulators launched adult-use sales immediately, stores would be cleaned out.

New Jersey joins Maine and Massachusetts as states in the region that already have recreational marijuana markets.

In addition to New Jersey, the population of four states that have also been discussing adult-use legalization – New York, Pennsylvania, Connecticut and Rhode Island – totals 37 million.

The Northeast has been trying to move as one bloc toward adult-use legalization, with New York Gov. Andrew Cuomo hosting a meeting of Northeast governors in fall 2019 to develop a regional approach to legalization.

– Bart Schaneman

9:30 p.m. (South Dakota)

The polls have closed in South Dakota.

The secretary of state’s office reported Monday that 216,140 ballots had been received, meaning 37% of the state’s registered voters had cast their votes before Election Day.

Two cannabis ballot initiatives went before voters:

Measure 26 would create a medical marijuana market in the state.
Amendment A would legalize adult-use marijuana and offer protections to the MMJ program.
Measure 26 was expected to pass easily, while Amendment A was facing a very close race, according to Washington DC-based Mason-Dixon Polling Strategy.

– Kate Lavin

Mitch McConnell

9 p.m. (National)

Senate Majority Leader Mitch McConnell has been elected to a seventh term, the Associated Press reported.

The Kentucky Republican is expected to continue to be a thorn in the marijuana industry’s side unless the Senate flips to the Democrats.

One exception could be cannabis banking reform, which could gather enough momentum even in a Republican-controlled Senate to force McConnell to hold a floor vote on the issue.

– Jeff Smith

7:30 p.m. (New Jersey)

Marijuana multistate operators Curaleaf, TerrAscend and Green Thumb Industries are three of the big beneficiaries from potential recreational marijuana legalization in New Jersey.

That’s according to a research report last week by St. Louis-based investment banking firm Stifel.

Stifel pegs Massachusetts-based Curaleaf as having the largest share of New Jersey’s medical cannabis market with an estimated slice of 35%-40%.

Curaleaf, Stifel reported, has a large cultivation and processing expansion slated to come online in early 2021 “and a second store potentially opening near-term.”

TerrAscend, based in Toronto and New York, is expanding rapidly in New Jersey, Stifel noted.

TerrAscend said in August it had started the construction of a 200,000-square-foot facility. The first phase of the construction, 80,000 square feet, is expected to be operational by year-end.

Stifel reported that the company’s initial 37,000-square-foot greenhouse has come online, and TerrAscend’s first dispensary is expected to open before the end of 2020.

Illinois-based Green Thumb, Stifel said, isn’t far behind in terms of cultivation, processing and retail capacity.

Other MSOs in New Jersey include New York-based companies Acreage Holdings and Columbia Care.

7 p.m. (National)

If the Democrats win control of the U.S. Senate, as some election gurus and pollsters predict, then an eye-opening possibility for the marijuana industry will be how western U.S. states will likely have several senators in positions of power over any MJ legalization effort.

The following Democratic senators would be in line to chair their respective committees:

Ron Wyden of Oregon on the Finance Committee.
Dianne Feinstein of California on the Judiciary Committee.
Patty Murray of Washington state on the Health, Education, Labor and Pensions Committee.
Maria Cantwell, also of Washington state, on the Commerce, Science and Transportation Committee.
“It provides a really unique opportunity for the West Coast to be driving policy in an area where they have the most expertise … and the most need for federal reform because of what interstate trade and uniform health requirements would accomplish,” said Randal Meyer, the executive director of the Global Alliance for Cannabis Commerce.

Meyer noted that the Senate’s Democratic leader, Chuck Schumer, has publicly promised to make marijuana legalization a priority if his party wins the upper chamber, which could put each of those senators in key positions to influence how the federal policy is shaped.

Meyer said he’s also watching the Senate races in Arizona and Maine, where Republican incumbents might lose tight races to Democratic challengers.

He believes control of the Senate is still on a “razor’s edge” and could go either way, adding that the only thing he’s confident of is, whichever party wins will have a “really thin majority.”

Meyer did say he expects former Vice President Joe Biden to win the White House, mainly because President Donald Trump really hasn’t expanded his base since winning the presidency four years ago.

– John Schroyer

6:30 p.m. (New Jersey)

New Jersey residents are expected to legalize recreational marijuana, creating a market that will ignite hundreds of millions of dollars in business opportunities in the state and likely influence neighboring states to go down the same path.

Marijuana Business Daily projects that annual sales in New Jersey will reach $850 million-$950 million by 2024.

But details are yet to be worked out, so that estimate could be conservative.

“We expect it to be the largest cannabis market on the East Coast,” said Scott Rudder, president of the New Jersey CannaBusiness Association.

Approval is expected to cause a domino effect in the Northeast, putting particular pressure on New York and Pennsylvania to legalize adult-use.

New Jersey also could accelerate legalization efforts in Maryland and Virginia.

The referendum was placed on the ballot by the state Legislature.

Lawmakers are expected to introduce enabling legislation later this week or early next week, using a previous bill as the foundation.

Rudder anticipates significant opportunity for New Jersey businesses such as craft producers, even though existing medical cannabis operators are expected to get priority status in adult-use licensing.

A market launch could occur by mid- to late-2021.

– Jeff Smith

6 p.m. (National)

Democrats have a 3-in-4 chance to flip the U.S. Senate, according to FiveThirtyEight’s final election forecast.

FiveThirtyEight analyzes and integrates a number of poll results from around the country. But the site also notes a key caveat: A number of tight races remain well within margins of error.

The Democrats need a net gain of four seats to win control of the Senate, and they appear most likely to pick up seats in Arizona, Colorado, Georgia, Maine and North Carolina. At the same time, it looks as if the party will lose a seat in Alabama.

If the Democrats win the White House, control could be gained through a net gain of three seats because the vice president becomes the Senate tie-breaker.

But how often does a vice president actually play that role? Less than 300 times since 1789.

A Democratic-controlled Senate is much more likely to pass federal marijuana reform, industry experts believe.

While concurring with that sentiment, New York-headquartered investment banking firm Cantor Fitzgerald also noted that if so-called red states such as Montana and South Dakota legalize recreational marijuana, then a “thriving cannabis industry there could make senators from those states more open to reform at a federal level.”

So while a Democratic-controlled Senate is almost certain to accelerate federal marijuana reform, all is not lost if the Republicans maintain control of the upper chamber.

– Jeff Smith

5:20 p.m. (Mississippi and New Jersey)

Tweets from governors of two states voting on marijuana legalization show a stark difference in messaging in the run-up to the election.

On Nov. 2, New Jersey Gov. Phil Murphy tweeted in favor of the state’s adult-use legalization vote, saying, “Let me be BLUNT: Legalizing marijuana is a matter of social justice, racial justice, and economic justice.”

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