How the 2016 Election Became a Watershed for Weed

The year of 2016 may go down as a watershed for weed, the election when legalization shifted from being an experiment in the American West to something primed for the mainstream.

Nine states voted on marijuana-related measures—four related to medical marijuana and five to recreational—and eight of them passed. The upshot is that more than half of the states in the U.S. now have comprehensive medical marijuana laws and roughly one fifth of the population lives in a place where adults 21 and older can legally consume weed for fun.

While the green rush is taking place from coast to coast, many eyes were on the Golden State on Tuesday. California legalized recreational marijuana, and experts believe that it will prove a tipping point. “If California legalizes,” the Drug Policy Alliance’s Amanda Reiman said ahead of the vote, “it is the death knell for federal prohibition.” Massachusetts and Nevada also legalized adult use initiatives. Arizona voters rejected one, and Maine is still too close to call.

Before Election Night, adult use was legal in four states and the District of Columbia. It is now legal in seven. But California has outsized clout, the most populous state and the sixth largest economy in the world. Reiman noted that while “a handful” of Congress members lived in a state with legal weed before November 8th, now roughly 100 do.

Though it was a footnote in a presidential race rocked by scandal and sensation, both Hillary Clinton and Donald Trump expressed support for medical marijuana. They also said little to suggest that they would break with the Obama Administration’s policy of generally not going after people that are acting in accordance with their state and local marijuana laws, despite the fact that the federal government still views marijuana as a highly addictive substance on par with heroin.

Legalization advocates hope that with influential states coming online, the incoming president and Congress might be proactive in reform rather than looking the other way—perhaps rescheduling cannabis as a substance with known medical uses or changing tax laws that have been highly problematic for businesses in the nascent legal market, because the IRS still technically views them as drug traffickers. Many hope to see the easing of banking restrictions that have forced this multi-billion-dollar industry to largely operate in cash, a dangerous practice that creates safety hazards for proprietors and makes revenue harder to track and tax.

Changes in policy in places like California “put big pressure on the federal government, not necessarily to legalize and to remove all restrictions but to ease some of the contradictions of the current legal status of marijuana,” said Sam Kamin, a marijuana law expert at the University of Denver.

A total of 28 states have now legalized medical marijuana, up from 25 before voters went to the polls. North Dakota and Arkansas approved medical measures, but Florida, the first to pass a marijuana legalization measure this year, is the big kahuna among this cycle’s cohort. (Montana voters also approved a measure that would loosen restrictions on the state’s medical program; voters legalized in 2004.)

Though markets for medical marijuana are generally smaller, legalization in the third most populous state presents a big economic opportunity and tilts the scales in a part of the country that has been slower to accept marijuana. “If Florida passes, that’s going to be a huge, huge thing for the East Coast,” Bruce Barcott, author of Weed the People: The Future of Legal Marijuana in America, said before the vote. “It’s a huge market.”

States will soon get to the business of setting up regulatory frameworks and preparing to issue licenses to cultivators and dispensaries over the next several years. Residents in some states will now be allowed to grow plants in their own homes and felons will have a chance to get their records expunged in others, if their previous crime is something that is no longer illegal. And as bureaucracies churn through change, money will come pouring in.

Though big corporations remain wary of getting into the weed business so long as federal prohibition remains, individual angel investors and family funds are already cutting million-dollar checks to firms like Privateer Holdings, a private equity outfit that specializes in the space. CEO Brendan Kennedy says that California is one of “three big milestones” he has been anticipating, along with Canada looking to legalize recreational marijuana next year and Germany planning to legalize medical.

“This isn’t the beginning of the end,” says Kennedy. “We’re moving toward the end of the end of prohibition.”