The recreational use of marijuana could occur as soon as 2018 in several states along the East Coast and even the Southwest if voters approve the referendums.
The number of states that have approved medicinal use of cannabis has increased during the past few years, but many states have banned recreational use.
Last fall voters in California, Massachusetts, Maine and Nevada approved the recreational use of marijuana while Arkansas, Florida and North Dakota adopted medical marijuana laws. Efforts in Arizona failed, but this issue could emerge as a ballot initiative next year, said Bryan Meltzer, a partner at Feuerstein Kulick, a New York law firm specializing in cannabis law, litigation and corporate transactions.
As the nascent marijuana industry accelerates, revenue generated in the legal cannabis sector has grown at an immense pace with North American consumers spending $6.7 billion on legal cannabis products in 2016, up 34% from 2015, according to The Arcview Group, a cannabis investment and research firm based in San Francisco.
The momentum is expected to pick up as the adult use markets open in California, Massachusetts and Canada. By 2021, the industry is predicted to generate revenue of $22.6 billion, the firm said.
Depending on the state's laws, legalization could occur either through a referendum or a state's legislature. More states and their lawmakers will seek to legalize recreational use of cannabis, especially if they are located in an area surrounded by other states that have been generating revenue already.
A regulated market will deplete the existing black market of its supply and could be a catalyst for other states, said Meltzer.
"A lot of products that fail state regulations and can not be sold in a legal market will likely go towards black markets in nearby states that do not have legal regulated markets," he said. "This also includes legal products sold in legal markets."
Lawmakers who are cognizant of the loss of tax revenue could decide this is the impetus needed to legalize recreational use. They could "tax it like businesses in other industries to generate hundreds of millions in tax revenue," Meltzer said. "It's a compelling reason for a state to do that."
The advocacy groups in some states are working hard to collect signatures to place marijuana initiative measures on the 2018 ballot. As of Augudy 7, New Approach South Dakota has 90 days to collect all their signatures in order to place two marijuana initiative measures on the ballot, according to the Marijuana Policy Project, a Washington, D.C.-based marijuana policy reform organization. One petition seeks to legalize marijuana for medical uses and the other to legalize certain amounts of marijuana for adult use and to regulate and tax marijuana businesses.
Legalizing recreational use has a spillover effect not just in generating tax revenue, but also in creating more jobs, said Jason Spatafora, co-founder of Marijuanastocks.com and a Miami-based trader and investor known as @WolfofWeedST on Twitter.
"In a perfect world where politics and gerrymandering of districts didn't impact marijuana legislation, states that adopted cannabis laws similar to Colorado would experience something their less progressive neighbors would be envious of such as the benefits of tax revenue as well as the intrinsic values these laws have on surrounding ancillary industries such as security, real estate and other services," he said.
The impact on the manufacturing industry is also sizable as the cannabis sector will only add more jobs instead of reducing them, unlike the coal industry, Spatafora said.
"But if I had my personal choice of where to wave my judicial wand, it would be in states where they used to mine coal and where they are very good at making moonshine," Spatafora said. "States should also see a reduction of opioids overdoses as well as a reduction of marijuana-related drug offenses, which has an immeasurable value," he said.
While the adult use of cannabis is emerging as a bi-partisan issue, nearly everyone is coming around and understands the medicinal qualities and effects, said Jeffrey Zucker, president of Green Lion Partners, a Denver-based business strategy firm for early stage cannabis companies and a board member of the Marijuana Policy Project.
"There are plenty of Republicans who have seen what it is doing for many states," he said. "They will have to consider it more since some of their deficits are so large."
Partaking in edibles, extracts and topicals will soon be ubiquitous like consumers who opt to drink alcohol as entrepreneurs develop various uses for cannabis for both medicinal and recreational purposes, Zucker said.
"It will be regulated like alcohol and generally once there is medical approval, the minds of constituents and politicians will slowly open their minds to recreational use," he said.
While experts sometimes disagree on which states are likely to legalize recreational use, these are the six states that are most likely to end prohibition for adults 21 years and older.
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