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Cannabis legalization is sweeping the US, and experts and industry watchers say that Democratic control of Congress and the White House could spur more reform in the coming months.
Senate Majority Leader Chuck Schumer has said that cannabis reform will be a top priority this year, though that could be a tall task given Democrats' slim majority.
Cannabis is also gaining ground on the state level. Five states voted to legalize cannabis in some form in November's elections.
In March, New York passed cannabis reform through the state legislature. The market could be massive, due to its population and the tens of millions of tourists that visit the state.
Companies already operating in New York told Insider that they're gearing up cultivation capacity. Operators eyeing the Empire State say they're watching closely as regulations shape up but that they're leaning toward entering the market as cultivators, rather than retailers.
Meanwhile, companies are already racing to take advantage of the New Jersey market. In February, New Jersey Gov. Phil Murphy signed legislation legalizing cannabis and establishing commercial sales in the state.
State legislators in New Mexico Virginia, and Connecticut voted recently to legalize cannabis, and the laws took effect in late June and early July.
To put together this tracker, Insider tapped a variety of sources to explain the nuances of each state's measures. We've also included market-size projections to give a sense of how important each state could become for businesses and investors.
Here's everything you need to know about the new wave of US cannabis legalization:
This article was published on October 9. It was updated on July 9 with legalization efforts in New Mexico, Virginia, and Connecticut.
New Jersey
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What's in the law: New Jersey residents voted to pass Public Question 1 in November, legalizing cannabis for adults over age 21.
The ballot measure subjects recreational cannabis products to a 6.65% sales tax. Local municipalities with dispensaries will also be able to put their own taxes on marijuana — capped at 2%.
On February 22, Gov. Phil Murphy signed three bills legalizing marijuana in the state, establishing commercial marijuana sales, and outlining penalties for minors caught with possession of marijuana.
Which companies will benefit: Curaleaf, Acreage Holdings, and Green Thumb Industries, Cowen says.
Why it matters: Cannabis legalization in New Jersey has long been seen as a catalyst that could spur New York and Pennsylvania to legalize as well. New York passed recreational cannabis just one month after Murphy signed recreational cannabis into law.
Prospective market size: Annual sales of up to $950 million by 2024, per industry publication Marijuana Business Daily's annual factbook.
Arizona
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What's in the law: Proposition 207 sets up a regulatory system for the commercial cultivation and sale of marijuana. Adults over the age of 21 can possess up to 1 ounce of cannabis.
The program is headed by the Arizona Department of Health Services (ADHS), which oversees the state's medical marijuana program. Recreational marijuana sales began in January.
Which companies will benefit: Cresco Labs and Curaleaf, Cowen says. Harvest Health & Recreation also has significant operations in the state.
Why it matters: A 2016 vote to legalize marijuana was narrowly defeated in Arizona after a deep-pocketed opposition campaign. While the opposition was less organized in 2020 than in 2016, the state's Republican governor, Doug Ducey, and the Arizona Chamber of Commerce did not support the measure.
Prospective market size: Up to $790 million in annual sales by 2024, according to Marijuana Business Daily.
South Dakota
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What's in the law: South Dakota passed both medical and adult-use cannabis bills in November, the first time a state has voted in favor of medical and recreational cannabis at the same time.
Measure 26 would legalize medical cannabis and sets up a system to let patients with qualifying conditions get the drug. Amendment A would legalize the consumption and possession of up to 1 ounce of cannabis for adults over the age of 21 and also automatically incorporates Measure 26 as the state's medical program.
The state's recreational program faces challenges amid opposition to adult-use, but medical is underway.
Under the state's medical program, patients with "debilitating medical conditions" will be allowed access to cannabis after receiving registration cards from the Department of Health and protections for cannabis patients in the state took effect on July 1.
However, according to NORML, patients shouldn't expect to receive state-issued medical cannabis cards or gain access to products until this fall.
Prospective market size: $100 million across medical and recreational by 2025, according to Cowen.
Montana
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What's in the law: Montana residents voted in favor of two separate cannabis measures to legalize recreational marijuana in the state.
Ballot issue I-190 allows adults over the age of 21 to purchase, possess, and consume cannabis while CI-118 allows the state to set a minimum age for cannabis possession. I-190 also sets up a strict residency requirement for Montana's cannabis industry, meaning local operators will benefit most.
Marijuana officially became legal on January 1, 2021 for adults over 21 to possess and consume, but the state will not start accepting dispensary applications until a year after that.
Which companies will benefit: Montana's law favors local operators over multistate companies. Plus, Montana only has about 1 million residents, meaning that it won't be a large market for any multistate operators.
Why it matters: Montana is a small Western state with a libertarian streak. Though it has voted for Republicans in federal elections since 2008, cannabis legalization is not a highly controversial issue in the state.
Prospective market size: A University of Montana study found that legalizing cannabis could generate $260 million in sales by 2026.
Mississippi
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What's in the law: Initiative 65 allows doctors to recommend medical cannabis to patients with qualifying conditions, including post-traumatic stress disorder, cancer, and multiple sclerosis. The measure also allows for the cultivation and sale of medical cannabis in the state.
Mississippi's new program will be headed by the state Department of Health. The agency has until August 15, 2021, to issue medical marijuana cards.
Qualifying Mississippians will be allowed to possess up to 2.5 ounces of marijuana at one time if they receive a recommendation from a doctor. The state will tax medical cannabis sales at a rate of 7%.
Though 74% of Mississippians voted to legalize medical marijuana in November, the state's program is tied up in litigation, reported Mississippi Today earlier this year. As of July, the program is still facing challenges in the state.
Which companies will benefit: Not specified
Why it matters: Mississippi is the latest deep-red state after Oklahoma to legalize medical cannabis. While it's not likely the state will push for recreational cannabis anytime soon, the move is another clear sign that even strongly Republican states are in favor of increasing access to medical marijuana.
Prospective market size: Annual sales could hit $800 million by 2024, per Marijuana Business Daily.
New York
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What's in the law: New York lawmakers passed the Marijuana Regulation and Taxation Act on March 30, and Gov. Andrew Cuomo signed the bill the next day.
People in New York are now allowed to possess and consume cannabis, but sales aren't expected to begin until mid-to-late 2022. More rules are expected in the coming months but according to the language in the bill, the 10 cannabis companies currently operating in New York's medical market will be allowed to transition into adult-use if they pay a one-time fee.
No operators — aside from the state's medical companies and select social equity businesses called "micro-businesses"— will be allowed to be vertically integrated in the state, giving incumbents a big advantage.
Which companies will benefit: Cresco Labs, Acreage, Columbia Care, Curaleaf, and Green Thumb Industries, according to Cantor Fitzgerald analyst Pablo Zuanic.
Why it matters: New York has the potential to become one of the biggest cannabis markets in the US. The state's population of more than 19 million is an attractive draw for companies looking to increase their footprint in the Northeast.
Prospective market size: Once the market ramps up, annual sales could reach $5 billion to $7 billion, according to estimates from analysts at Stifel and Cantor Fitzgerald, respectively.
New Mexico
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What's in the law: Gov. Michelle Lujan Grisham in early April signed legislation to legalize cannabis after convening a special session of the legislature to hammer out details.
New Mexico residents over the age of 21 are now able to consume cannabis, possess up to two ounces, and grow up to six marijuana plants at home. Recreational sales are set to start in the state on April 1, 2022.
The state will levy an excise tax on marijuana sales that will start at 12% and will increase to 18%, per the Associated Press. Further rules on licensing, product labeling and safety, and marijuana store employee training are due by 2022.
Which companies will benefit: New Mexico isn't a priority market for the largest cannabis companies, but expect some deals to happen to access major markets like Albuquerque, Las Cruces, and Santa Fe.
Why it matters: New Mexico has a sizeable population and neighbors states like Arizona and Colorado that have legalized marijuana.
Prospective market size: New Mexico's cannabis market could drive $318 million in sales and 11,000 jobs in the first year, according to an economic analysis released by the governor's office.
Virginia
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What's in the law: Virginia's legalization bill allows adults over the age of 21 to consume and possess up to an ounce of marijuana in the state. The law took effect on July 1, 2021.
Initially, the bill would have gone into effect on July 1, 2024, but Gov. Ralph Northam pushed the legislature to move up that date.
Virginia's Democratic lieutenant governor, Justin Fairfax, broke a 20-20 tie in the state's Senate to support the measure.
The details of marijuana sales in Virginia are still forthcoming — recreational sales are set to begin on July 1, 2024.
Which companies will benefit: It's too early to say. Legal sales won't begin for over three years. Altria — which owns a big stake in Canadian cannabis company Cronos Group — is headquartered in Richmond, Virginia.
Why it matters: Virginia is the first Southern state to legalize recreational cannabis.
Prospective market size: Too early to say.
Connecticut
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What's in the law: On June 18, 2021 the Connecticut legislature legalized cannabis for adults 21 and over and the law took effect a few weeks later on July 1.
Adults are allowed to possess up to 1.5 ounces of marijuana. Sales aren't expected to begin until next year.
Which companies will benefit: Curaleaf and Green Thumb Industries, according to Cantor Fitzgerald analyst Pablo Zuanic. The two companies operate six of the 18 medical dispensaries in the state, according to Barron's.
Why it matters: Though it has a small population, Connecticut was one of the few states left on the Northeast to hold out on legalization. Now with its transition to a recreational program, even fewer states in the region remain just medical.
Prospective market size: $500 million to $600 million by the end of 2023, per Cantor Fitzgerald.