Michigan is the first Midwestern state to legalize recreational cannabis in the US, growing the number of states where recreational use of marijuana is legal to 10, in addition to the District of Columbia. Since November 6, where the election took place, every citizen over the age of 21 is allowed to “possess, use, transport, or process 2.5 ounces or less of marijuana or 15 grams of marijuana concentrate,” according to the first marijuana proposal. The number of allowed marijuana plants is currently limited to 12 per individual.
What does it mean for marijuana?
The legalization of marijuana puts cannabis in a regulatory state that is similar to alcoholic beverages. Cannabis products will be subject to a general tax of 10 percent, that will be used to support “the implementation, administration, and enforcement” of the legalization.
It is however estimated that potential buyers of cannabis and THC including products in Michigan will have to wait until 2020 as state lawmakers still need to agree on regulations and licensing. Other than North Dakota’s Measure 3, Michigan’s proposal does not include any paragraph concerning the pardoning of people who have previously been arrested for possessing or selling cannabis.
The cannabis stock market experienced a decent upswing after last weeks legalization. The Marijuana Index started a small rally at 304 points on November 6, finding its peak at 320 points 24 hours later.
As Brendan Kenny, CEO of the established cannabis producer Tilray, told CNBC last week, “I think people are waiting for the Berlin Wall of cannabis prohibition to topple over in the U.S. and I think yesterday’s election removed a few more bricks from that wall.”
Why the change?
Legalization supporters argue that the war on drugs has failed and that prohibitive measures cause more damage than they prevent. There are hundreds of thousands of marijuana-related arrests in the US alone with every single one posing a big financial expense to the state. Furthermore, it is billions of dollars that find their way into the black market and to drug cartels rather than regulated and taxable companies.