Which State Will Be Next to Legalize Cannabis?

You’re reading a copy of this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news.

Subscribe to receive our free weekly newsletter in your inbox each Sunday morning.


Late Friday, Delaware moved close to becoming the 22nd state that has legalized for adult-use. The governor, John Carney, indicated that he wouldn’t take action on two bills, and this means that the state, which has medical cannabis already, will become legal on Wednesday. Carney doesn’t support legalization, but he didn’t veto it like he did last year.

The country has come a very far distance in the 11 1/2 years since the citizens of Colorado and Washington voted for cannabis to become legal. The country now has 44% of the states that will be legal for adult-use this week, so the addition doesn’t really matter much in our view. The state is very small, with just 1 million residents.

What should investors think about this? Will it help the market, which has been in decline for 26 months now and has fallen more than 90% as measured by the New Cannabis Ventures Global Cannabis Stock Index? As much as we hope so, we don’t think it will matter much, though the low population may not be as big of an issue as it seems. Philadelphia, which isn’t legal yet for adult-use but has 1.6 million residents, is a 40-minute drive to Wilmington, Delaware’s largest city.

Already the nation’s largest state, California, is legal, but the state is having a tough time on the cannabis front. Among the top 5 states in population, #2, Texas, and #3, Florida, don’t have adult-use programs. Neither does #5, Pennsylvania. New York, at #4, is having a very tough time as well. The three that don’t have adult-use yet all have medical programs. 2 of the states, Florida and Pennsylvania, are considered likely to legalize for adult-use soon, but Texas is unlikely to do so.

We are concerned that Florida, which has a very active medical program that is quite mature, won’t legalize soon due to its governor, Ron DeSantis, likely runs for President in 2024. The state has over 810K medical cannabis patients, and this is about 3.7% of the population, a large percentage. Pennsylvania had over 714K last May, and this is about 5.5% of its population. Both states would likely quickly serve the expanded market due to the large number of operators, both cultivation/production and stores.

Texas has a much less mature medical cannabis industry than the other large states, and there are less than 12K active patients. This is only 0.04% of the state’s population! Texas would be a great state to legalize for adult-use, but it’s very unlikely to happen. There is no legal process for the voters to vote for it. Any legalization must come from the legislature. The governor of Texas, Greg Abbott, is very much against cannabis, and he would veto any legislation. The medical program has improved recently, but it’s still really bad. The state expanded the number of conditions that enable treatment, but it remains quite limited. Worse, the amount of THC in cannabis oils is limited to just 1%

Florida or Pennsylvania legalizing for adult-use would be a lot more helpful for the industry than Delaware. They are more likely to do so than Texas, which would be an even better state in our view. Looking at the next five largest states, Ohio, Georgia and North Carolina aren’t yet legal for adult-use. Ohio could move in that direction.

While it would be nice to see more states legalize adult-use, we don’t think that it’s necessary for that to happen. We continue to hope for the elimination of the onerous taxation, 280E, or the ability of the operators to trade on the NASDAQ or the NYSE. The cannabis sector needs institutional investors, and either of these would help attract them in our view.

Like this newsletter? Sign up, and you will receive a free copy by email each Sunday morning. Each week, we share the top stories and write an original perspective as well.

New Cannabis Ventures publishes curated articles as well as exclusive news. Here is some of the most interesting business content from this week:


NCV keeps its readers informed of the revenue-generation by leading companies, and we reviewed recent reports and shared the outlook for upcoming quarterly financial reports in May.

Canadian cannabis sales were ahead of expectations, but they fell sequentially in February, a short month. The annual growth was 12.8%. We broke it down for the leading provinces, which grew 8-21% from a year ago.


Curaleaf, which shocked investors in the prior week that the state of New Jersey had decided against renewing its adult-use licenses, shared the good news that the state had changed its prior decision.

To get real-time updates download our free mobile app for Android or Apple devices, like our Facebook page, or follow Alan on Twitter. Share and discover industry news with like-minded people on the largest cannabis investor and entrepreneur group on LinkedIn.

Use the suite of professionally managed NCV Cannabis Stock Indices to monitor the performance of publicly-traded cannabis companies within the day or over longer time-frames. In addition to the comprehensive Global Cannabis Stock Index, we offer the Canadian Cannabis LP Index, the American Cannabis Operator Index and the Ancillary Cannabis Index.

View the Public Cannabis Company Revenue & Income Tracker, which ranks the top revenue producing cannabis stocks.

Stay on top of some of the most important communications from public companies by viewing upcoming cannabis investor earnings conference calls.

Discover upcoming new listings with the curated Cannabis Stock IPOs and New Issues Tracker.


Alan & Joel

Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

Get Our Sunday Newsletter