U.S.-listed shares of pot producers rose premarket on Tuesday after the Florida Supreme Court on Monday allowed voters to decide on the fate of recreational use of marijuana in the state through a referendum on the November ballot.
If voters approve of the amendment to the state’s constitution, adult-use cannabis will be legal in the country’s third-most populous state.
The Supreme Court essentially snuffed out an argument by Florida Attorney General Ashley Moody that the proposed amendment did not clearly explain to voters that cannabis would remain illegal at the federal level. The justices, in a 5-2 decision, found that the wording was clear and constitutional enough.
“…We conclude that the ballot summary and amendment comply with the requirements imposed by article XI,
section 3 of the Florida Constitution and section 101.161(1) of the Florida Statutes. We therefore approve the proposed amendment for placement on the ballot. No rehearing will be permitted,” Justice Jamie Grosshans wrote for the majority in the April 1 opinion.
Two justices wrote dissenting opinions.
The ruling means that Florida can become the next top prize for regulated U.S. marijuana operators, and could present significant opportunity and risks for insurance carriers. Florida has a population of more than 22 million and is already an important medical cannabis market, Reuters news service reported. If recreational pot becomes legal, more stores and dispensaries may need property insurance, but could also face liability for personal injury lawsuits, premises liability and other issues.
States that legalize adult-use cannabis typically see rapid growth of the market, with the openings of dispensaries, growing facilities, and distribution operations, the Insurance Journal has reported. Many insurers, managing general agencies and brokers who specialize in cannabis are usually already operating in these states. Florida is predicted to see strong growth through 2028 if sales become legal, according to BDSA, which tracks cannabis data nationwide.
Related: Takeaways on Selling Insurance to Cannabis Businesses in Newly Legal States
Voter approval of the amendment could also add to the Biden administration’s efforts to push cannabis reforms such as seeking to ease the treatment of the psychoactive plant under federal law and pardoning thousands of convictions for mere possession of the drug.
The U.S. health agency last year also proposed to reclassify cannabis as a lower-risk substance, boosting expectations of legalization at the federal level.
Adult-use cannabis is legal in 24 U.S. states and also in the District of Columbia, Guam and the Northern Mariana Islands.
“As the nation’s largest medical cannabis market with a high population and significant political influence, Florida has the chance to make history by joining the growing majority of Americans who say ‘yes’ to legal regulated cannabis and the wealth of positive health, wellness and economic benefits this incredible plant provides millions of individuals and countless communities every day,” said George Archos, CEO of Verano Holdings.
Kim Rivers, CEO of Trulieve Cannabis, agreed: “We are thankful that the Court has correctly ruled the ballot initiative and summary language meet the standards for single subject and clarity. We look forward to supporting this campaign as it heads to the ballot this November.”
Shares of marijuana companies rose between 1% to almost 7% before the bell, Reuters noted.
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