As Marijuana Grows More Mainstream, Mechanics of Legalization Change

By Heather Trela

The COVID-19 pandemic and resulting public health emergency caused massive disruption over the past 18 months—jobs were lost, events were cancelled, and people had little choice but to adapt to a virtual world as schools, governments, and offices transitioned to being at least partially, if not fully, remote. One policy that didn’t seem to be slowed down by the pandemic, however, was marijuana legalization. From July 1, 2020 to June 30, 2021[1], nine states legalized new programs for medical and adult-use/recreational marijuana—the largest number of states to legalize marijuana during any comparable year to date.

Though this was an unprecedented year by any metric, there are some takeaways and lessons learned from the proliferation of marijuana legalization. There was a rise of adult-use cannabis legalization through the legislative process, challenges to marijuana initiatives, and increased focus on marijuana legalization as a potential vehicle for social justice reform. This blog post explores these three trends in more detail.

Rise of Legislative Legalization

In the past, it proved difficult to legalize adult-use marijuana through a state’s legislative process. The majority of early legalization efforts were instead accomplished by ballot initiative processes, which put the issue directly in front of voters on election day. Many factors contributed to the complexity of legalizing legislatively, including the role of interest groups, uncertainty around the long-term effects of legalization, and perceptions that recreational marijuana legalization was not a make-or-break issue for constituents. In 2018, Vermont used the legislative process to legalize marijuana for people over the age of 21, but did not create a commercial market for retail sales; the state instead initially allowed only for the home cultivation of a small number of marijuana plants. It wasn’t until 2019 that Illinois became the first state to pass legislation legalizing marijuana and creating a market for it to be purchased within the state—nearly seven years after voters in Colorado and Washington did the same via their initiative processes. Illinois’s action seemed to pave the way: in 2020, the Vermont legislature approved the creation of a commercial market for adult-use marijuana and in 2021, four states—Connecticut, New Mexico, New York, and Virginia—legalized adult-use marijuana through the deliberative legislative process rather than by the impetus of a ballot measure.[2]

Method for Legalizing Adult-Use Marijuana
State Initiative Process Legislative Process
Alaska X
Arizona X
California X
Colorado X
Connecticut X
Illinois X
Maine X
Massachusetts X
Michigan X
Montana X
New Jersey X
New Mexico X
New York X
Nevada X
Oregon X
South Dakota X
Vermont X
Virginia X
Washington X

There are a few explanations for the increase in legislative legalization of adult-use marijuana. One is that some factors that previously served as barriers to the legislative process are no longer as prevalent or impactful. As time elapsed since the early adopter states of Colorado and Washington implemented their adult-use marijuana programs, uncertainty around the longer-term societal and health effects of legalization diminished.

Marijuana legalization and decriminalization also is becoming more frequently used as a campaign issue for both elected officials and voters, often viewed in the context of racial justice. The governors of Connecticut, New Jersey, and Virginia all campaigned on the issue of liberalizing their respective state marijuana laws. Joe Cunningham, who is currently running against the incumbent in the South Carolina gubernatorial race, has made marijuana legalization part of his platforms. This extends to the federal level as well: almost all of the Democratic presidential candidates in 2020 took a position in favor of marijuana legalization (the notable exception being Joe Biden). Senate Majority Leader Chuck Schumer has said that the federal legalization of marijuana is a priority. Marijuana legalization is becoming a mainstream political issue.

That legislative legalization efforts in 2020-21 were occurring during uncertain budgetary times for state governments as a result of the COVID-19 pandemic cannot be ignored either. Finding a new source of state tax income is always attractive to policymakers, but is especially alluring when facing fiscal recovery and rebuilding after shutdowns and costs of fighting COVID-19. After a dip early in the pandemic due to lockdowns, strong sales in most states have given the impression that marijuana may be a “recession-proof” product that will be a steady source of income for states. One report tracked a 46 percent jump from 2019 to 2020 sales. Illinois, where adult-use marijuana sales began in January 2020, has shown steady growth in tax revenue throughout the pandemic.

Illinois Adult-Use Cannabis Tax Revenue

SOURCE: https://www2.illinois.gov/rev/research/taxstats/CollectionsComptroller/Pages/default.aspx.

While states have made progress in their ability to use the legislative process to legalize, for many of them it took multiple sessions for all the components to come together for bills to actually pass. Connecticut, New Mexico, and New York, for example, each had made previous attempts to legalize in earlier legislative sessions, but deals could not be reached to get their bills over the finish line. In New Mexico, Governor Michelle Lujan Grisham formed the Cannabis Legalization Working Group in 2019 to develop legislation and try to iron out issues after a failed legislative legalization attempt in the House earlier that year. Given recent trends, it will not be surprising to see the legislative process to legalization shorten as more states legalize and public support continues to rise.

Complications with Initiative/Referendum Legalization

States have not abandoned the use of the initiative and referendum process, however. On November 3, 2020, voters in Arizona, Montana, and New Jersey supported the legalization of adult-use marijuana, and voters in Mississippi came out in favor of medical marijuana. South Dakota became the first state to legalize medical and adult-use marijuana at the same time via two separate ballot questions (Initiated Measure 26 and Constitutional Amendment A, respectively).

This year also saw legal challenges to some of these initiative legalization efforts. On May 14, 2021, the Mississippi State Supreme Court overturned Initiative 65, citing the state initiative process used for legalization to be invalid. That state’s initiative process currently requires ballot measures to obtain signatures from each of the state’s five congressional districts. After the 2000 census, however, Mississippi lost a congressional seat to reapportionment and its initiative procedure was never updated to reflect that the state now has only four congressional districts. The court therefore found that the state’s ballot initiative process as it was is “unworkable and inoperable on its face” and that it would be up to the legislature to address the issue. The ruling upended the state’s approval of medical marijuana use and opened up any previous ballot measure passed under this procedure to legal challenge. The Mississippi legislature is currently weighing whether to create a medical marijuana program through legislation.

While the initiative process was an important component of early marijuana legalization… challenges to voter-supported marijuana initiatives are showing some of the weaknesses in that approach.

South Dakota’s adult-use marijuana legalization effort also has faced a lawsuit. Shortly after voters approved Constitutional Amendment A, its constitutionality was challenged, with the support of the governor, on the grounds that the amendment should not have appeared on the ballot. The South Dakota Sixth Judicial Circuit Court agreed, ruling that Amendment A violated the constitution’s “single subject rule” (Article XXIII, §1) by addressing both marijuana and hemp in the title of the amendment and in defining the terms separately within the text of the amendment, as well that the amendment contains sections, including taxation, that the court found were not “reasonably germane” to the stated purpose of the legalization of marijuana. Additionally, the court found that the text contained in Amendment A “provides far-reaching changes to the nature of South Dakota’s governmental plan” and should therefore be considered a revision to the constitution, rather than an amendment, which would necessitate it following the process of a constitutional convention rather than the initiative process. The ruling was appealed to the South Dakota Supreme Court and oral arguments were heard on April 28, 2021. A decision by that state’s highest court is expected sometime later this summer.

While the initiative process was an important component of early marijuana legalization and was a tool for citizens to introduce the idea of medical and adult-use marijuana when legislatures were more hesitant to take action, these challenges to voter-supported marijuana initiatives are showing some of the weaknesses in that approach.

Some states also have begun passing legislation to change the initiative process, adding restrictions to make it harder for items to qualify for the ballot. In April 2021, for example, Idaho Governor Brad Little signed a new law that changed the signatory requirement for initiatives; while measures previously needed 6 percent of voters from 18 of the legislative districts in the state, the new legislation requires a minimum of 6 percent of voters of all 35 legislative districts. In South Dakota, Senate Bill 77 was enacted, which sets 14 point font as the minimum for ballot initiative petitions, in addition to the previous requirement that the full text of a petition and signatures must be on a single sheet of paper. Florida enacted a law, preliminarily blocked by a court ruling, setting a $3000 contribution cap on ballot initiatives. According to a report citing the Ballot Initiative Strategy Center, as of May 2021, 144 bills have been introduced in 32 state legislatures that would restrict the ballot initiative process.

Challenging the initiative process and making the initiative harder to use may become a new legal strategy for those that oppose marijuana legalization.

Social Justice as a Central Issue in Negotiations

Framing the legalization of marijuana in terms of racial equity and social justice is nothing new—that people of color and people from disadvantage communities are disproportionately affected by the War on Drugs was part of the dialogue in support of legalizing adult-use marijuana in the early-adopter states of Alaska, Colorado, Oregon, and Washington. That dialogue, however, did not translate into many states’ initial legalization policies in ways that would help communities negatively impacted reap the rewards of legalization, whether that be participation in the industry or using newly generated revenue to target investment and programs in those communities. Massachusetts was the first state to create just such a social equity program when it legalized adult-use marijuana in 2018. That state’s program provides resources and training to bring those that were negatively impacted by previous marijuana prohibition policies into the newly legal industry.

This year saw social equity and racial justice take center stage in negotiations on state legalization of adult-use marijuana, potentially setting a new benchmark. Equity was key to the crafting of the New York legislation, with negotiations focused around how to distribute new adult-use marijuana tax revenue to communities that were particularly affected by previous enforcement measures. The final legislation not only earmarks 40 percent of the tax revenue from sales for a community grants reinvestment fund, but also sets a goal of 50 percent of adult-use marijuana licenses to be issued to social and economic equity applicants. Connecticut Governor Ned Lamont threatened to veto adult-use marijuana legislation when he thought that a provision added by the Senate would broaden the definition of social equity applicant so much that it wouldn’t target those most negatively impacted by the enforcement of previous marijuana laws.

This year saw social equity and racial justice take center stage in negotiations over state legalization of adult-use marijuana…

Expungement of records for some previous drug convictions has also been a feature in the legalization efforts in many states, and this year saw more states consistently embrace an automatic process for doing so. In many states, qualifying marijuana convictions can be expunged or sealed, but it is up to the individual to petition the court for this to happen, requiring them to have the necessary funds for counsel and/or knowledge of the legal system to navigate this process. In states with automatic expungement, however, the burden is on the state, not the individual, to initiate the process. The majority of states that legalized adult-use marijuana in the most recent legislative session went this route, with Connecticut, New Jersey, New Mexico, New York, and Virginia all making the automatic expungement of some convictions part of their legalization strategy. Automatic expungement is not quick—it may take years to identify and process all the eligible convictions—but it is supported by social justice advocates because it removes social and economic barriers that some individuals may face if they are required to initiate the process on their own.

States with legalization laws already on the books also took steps this year to incorporate social equity initiatives into their programs. In July 2021, Colorado Governor Jared Polis announced the creation of the Cannabis Business Office to focus on providing assistance, both financial and technical, to social equity licensees. In November 2020, Washington created the Social Equity in Cannabis Task Force to make recommendations on how to facilitate social equity within the state’s marijuana industry, including a program for the issuance of licenses. In Oregon, HB 3112 was introduced to establish the Equity Investment and Accountability Board and the Equity Investment and Accountability Office within the Governor’s office to address issues of social equity in that state’s marijuana industry.

With the ongoing national debate around issues of equity and justice, it is not surprising that states are being more deliberate in incorporating a social equity lens to their state marijuana legalization efforts, including revaluating what works and what does not in achieving more diversity and representation in the industry and addressing the disproportionate prosecution and incarceration of certain communities during marijuana prohibition.

Marijuana Moving Forward

Marijuana legalization does not show any signs of slowing down. Many states, including Ohio, Mississippi, and Rhode Island, have already taken steps to put medical or adult-use marijuana up for debate. Several bills have been introduced in the US Congress that would impact the industry, including the Cannabis Administration and Opportunity Act that would decriminalize and deschedule marijuana at the federal level.

Activity on marijuana legalization and decriminalization in 2020-21 provides clues as to where marijuana policy across the country is likely headed.

ABOUT THE AUTHOR

Heather Trela is director of operations and fellow at the Rockefeller Institute of Government


[1] Forty-six states have a fiscal year that beings on July 1. New York (April 1), Texas (September 1), Alabama (October 1), and Michigan (October 1) are the exceptions.

[2] Additionally, Alabama enacted legislation to legalize medical marijuana in 2021.

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