The 11th state to legalize the recreational pot will be … – The Fool Motley

In terms of momentum, the marijuana industry has been virtually impossible to stop in recent years. Once considered a taboo subject lawmakers routinely covered, cannabis has now become a common topic in the United States, as evidenced by the fact that two out of three Americans support large-scale legalization, according to Gallup.

Cannabis favorability has also been the driving force behind state-level legalization. In 24 years, we have gone from zero approved medical state or recreational to 33 states with laws on medical pots. Of these 33 states, 10 allow adults to use cannabis, and nine have accepted the retail sale of marijuana (sorry, Vermont).

With the collection of state-level bribes and polls clearly favoring legalization, it seems only a matter of time before new states take the plunge on the medical or recreational side of the table. # 39; s equation. But, to be clear, sales of leisure products should be the lion's share of legal marijuana revenues in the United States.

The 11th state to legalize recreational weeds will be …

So, which state is looking to become the 11th to legalize marijuana for adult use? If you asked for a few months ago, it seemed like an elbow battle between New Jersey and New York. Unfortunately, efforts to legalize marijuana in both states have failed and neither appears to be in a position to pass legislation so soon. Instead, Lincoln appears to be in pole position to become the 11th state legalized for recreational purposes.

As reported by Time and the Chicago Tribune Last weekend, Democratic Gov. JB Pritzker, of Illinois, announced that he had reached an agreement with key lawmakers in the state legislature to legalize marijuana for recreational purposes. Here on January 1, 2020. The bill would allow residents of Illinois to own up to 30 grams of marijuana. cannabis (a little over one ounce), non-staters being allowed to possess up to 15 grams. Residents of Illinois would also be allowed to grow up to five plants. And, as in all other legal states, the age limit for purchases would be 21 years and over.

In addition to simply legalizing weeds for adult use, the bill announced by Pritzker will cancel some cannabis convictions (eg, class 4 crimes and crimes) and include a low interest rate loan program. $ 20 million. This loan program would help applicants open a licensed cannabis business that has lived in high-crime communities or high-incarceration or arrest communities for marijuana-related offenses.

Then there are the very lucrative taxes on the recreational pot. Farmers and processors would pay 7% of their gross sales to clinics, with consumers paying at least a 10% tax rate on recreational cannabis products. Products containing less than 35% tetrahydrocannabinol (THC) – the cannabinoid that lifts the user – will carry a tax rate of 10%, with products with a THC content greater than 35% (eg concentrated ) at 25%. Cannabis-based drinks will have a tax rate of 20%. And for good measure, municipalities and counties can add their own separate tax rates, which peak at 3% for municipalities and up to 3.5% for unincorporated counties. At least 10% of the income generated by the legalization of the recreational pot would help Illinois cover unpaid bills.

According to the governor's office, although the legalization takes effect on January 1, 2020, the recreation licenses for the clinics would be issued only in May or June 2020.

These marijuana stocks are rushing for Illinois to legalize marijuana for recreational purposes

As we have seen in Garden State and Empire State, even so-called things can collapse. Although the road to legalization seems clear now, the bill will undoubtedly face opposition. But if Illinois became the eleventh state to accept marijuana for adult use, there would be plenty of happy campers in the cannabis industry.

To begin, MedMen companies (NASDAQOTH: MMNFF) would do the joyous dance. Although the upscale and vertically integrated dispensary operator only has one site open in Oak Park, this would mean that the MedMen stock transaction, worth $ 682 million dollars to purchase the private group PharmaCann seemed more attractive. You see, PharmaCann had originally obtained six marijuana licenses for medical purposes in Illinois, which was a record in that state at the time of the award. It has four open clinics serving approximately 80% of the Chicagoland market and two relatively local production facilities. With the infrastructure already in place, MedMen would simply need to apply for a recreation license or modify its medical pot licenses to get a piece of what could be a multi-billion dollar market.

The legalization of weeds for recreational purposes in the land of Lincoln would also be a headache for Cover growth (NYSE: CGC)which announced the possible acquisition of Surface Fund (NASDAQOTH: ACRGF) for $ 3.4 billion last month. If the US Federal Government Legalizes Marijuana Within 90 Months, Canopy Will Be Entitled to Acreage, Currently Growing, Processing or Retail in 20 States – Best Operator vertically integrated dispensaries. Illinois is one of those 20 states, where Acreage has a culture farm and two health clinics. In other words, it would further strengthen Canopy Growth in one of America's key markets.

The largest vertically integrated dispensary by number of licenses (assuming closure of all pending acquisitions), Harvest Health & Recreation (NASDAQOTH: HRVSF), also benefits. In March, Harvest Health announced that it would buy the private company Verano Holdings for $ 850 million in a transaction involving only shares. Verano currently has two Zen Leaf clinics in Illinois (one in Chicago and the other in St. Charles). Although Harvest Health has 130 retail store licenses in 17 states (again, assuming all acquisitions are finalized), you can count on Illinois to become a relatively important part of its strategy. long term.

Now we are just looking and waiting to see if Illinois lawmakers can deliver the green as promised by the governor.