Even as federal drug policy reform efforts picked up in 2023, U.S. states continued to lead the country’s push for marijuana legalization during the past year. States passed news legalization measures, launched adult-use retail sales and set a raft of sales records as markets matured.

Lawmakers at the state-level also continued to adjust laws around legal cannabis and how to regulate commercial activity and private use. Among the trends in 2023 were efforts at allowing legal marijuana businesses state-level tax deductions, providing protections to workers who consume while off duty and preparing to open up borders to interstate cannabis commerce.

Here are some of the biggest state-level marijuana news stories of 2023:

State-Level Legalization

Five more U.S. states and territories passed laws legalizing marijuana in some form during 2023. Some other states, such as Hawaii and New Hampshire, also made progress—despite some hiccups—on the road to reform. The year also saw voters in Oklahoma reject a legalization measure and cities in Texas put decriminalization measures on local ballots, with mixed results.

Minnesota

In May, Gov. Tim Walz (D) signed a reform bill into law to make Minnesota the 23rd U.S. state to legalize marijuana, removing penalties for simple possession and home cultivation as of August 1. And while regulators are still soliciting public input as they gear up to launch a system of regulated sales, legal retailers have already opened for business on some tribal lands.

The Red Lake Band of Chippewa Indians, for example, opened its medical dispensaries to adult consumers in August and announced plans to launch a mobile retail vehicle to sell marijuana at locations across the state. The White Earth Nation tribe launched an adult-use cannabis shop, too, with its governing council voting to authorize marijuana sales in July, and the Leech Lake Band of Ojibwe has also moved to legalize.

Broader state rules may not be in place until 2025, according to the Minnesota’s Office of Cannabis Management (OCM), meaning wider retail sales are likely still a ways away.

Even before Walz signed the reform bill, the state had launched a website that serves as a hub for information about the new law. Officials also began soliciting vendors to help build a licensing system for recreational marijuana businesses.

Other legalization-related changes have since followed, for example the establishment of the Cannabis Expungement Board, which will facilitate record sealing for people with eligible marijuana convictions on their records. The review process for eligible cases began in August.

In September, the Minnesota Supreme Court ruled that the odor of marijuana, on its own, does not establish probable cause for police officers to search a vehicle.

That same month, however, OCM hit a noteworthy snag after Erin DuPree, a cannabis industry consultant whom the governor picked to lead the new state agency, stepped down after one day of work following a Star Tribune report that her hemp shop allegedly sold illegal products.

Ohio

In a closely watched vote during November’s election, Ohio voters approved a marijuana legalization ballot measure, Issue 2, making the state the country’s 24th to end cannabis prohibition. Almost immediately, however, Republicans in the Senate signaled plans to overhaul the new law—a move legalization supporters decried as an effort to subvert the will of state voters.

GOP lawmakers claimed the changes were needed because voters didn’t understand the initiative’s provisions. While the Senate rushed to make the changes before certain aspects of the law took effect, however, House lawmakers have taken a slower pace and declined to act before adjourning for the year.

Gov. Mike DeWine (R) said earlier this month that the Senate’s proposal to amend the law is a “good bill,” adding that he’s spoken with House Speaker Jason Stephens (R), who assured him that the chamber would take up the issue once back in session. The legislature’s scheduled to reconvene in mid-January.

GOP House and Senate leaders have disagreed on certain procedural issues related to amending the marijuana law, such as the timeline for enactment, but they’ve both generally expressed support for the idea of making changes such as revising the tax structure, preventing public consumption and deterring impaired driving.

Advocates remain concerned about the Senate plan going into the new year. While it was significantly revised from its original form in committee—restoring home cultivation, for example—reformers say it still undermines the will of voters.

Meanwhile, DeWine has complained about what he’s described as the “ridiculous situation” in which marijuana is now legal to possess and use but no legal retailers exist. “The legislature needs to take action now so that we could actually start selling it in Ohio legally and control how it is being sold—and so that the person who’s buying it knows exactly what in fact they’re they’re getting,” DeWine said in an end-of-year TV interview.

As voters statewide legalized marijuana, local activists also notched a series of municipal-level wins on election night to decriminalize larger amounts of cannabis in three Ohio cities: Harbor View, Risingsun and Sugar Grove.

Delaware

After vetoing reform proposals during last year’s session, this year Delaware Gov. John Carney (D) allowed a pair of marijuana bills to become law in April, making the state the nation’s 22nd at that point to legalize adult-use cannabis. One measure legalized marijuana itself, while a second established a regulatory system for legal sales.

While Carney said at the time that he still opposed the policy changes, he explained that it was “time to move on” from the marijuana conversation and focus on other priorities. But even if Carney had decided to veto the bills, both measures cleared the legislature with more than enough support to override him.

The measures, sponsored by Rep. Ed Osienski (D) allow adults to purchase up to an ounce of cannabis from a licensed retailer, although home cultivation will remain illegal. And while sharing between adults is allowed, it’s forbidden to gift marijuana “contemporaneously with another reciprocal transaction between the same parties”—an effort to avoid gray-market sales schemes seen in some other states.

Legal sales aren’t expected to begin until sometime in late 2024.

Delaware’s new cannabis law gives local governments the ability to opt out of legal cannabis commerce, and some of the state’s beach cities—despite being known as boozy party towns—have already moved to ban marijuana businesses.

Separately, Delaware’s Senate approved a resolution in March that urges the state’s congressional representatives to support legislation to end federal cannabis prohibition.

U.S. Virgin Islands

Nearly a year ago, U.S. Virgin Islands Gov. Albert Bryan Jr. (D) began 2023 by signing a pair of bills to legalize and regulate marijuana for adults and facilitate automatic cannabis expungements, joining the Northern Mariana Islands and Guam among U.S. territories to adopt the reform. Bryan signed a medical cannabis legalization bill into law in 2019.

Despite political tensions between the governor and the recreational bill’s sponsor, Sen. Janelle Sarauw (I), over what the governor described as delays in introducing the measure, Sarauw told Marijuana Moment at the time that she was “grateful that the governor put politics aside and signed the bill into law” and that she looks forward to “the next steps and for the governor to really make a dent in establishing the infrastructure for this industry to flourish.”

There’s nevertheless been criticism of the legalization rollout, with licensing for the industry stalled due to a lack of a fully formed regulatory body. Advocates who championed the reform, including Sarauw, are especially frustrated that equity components of the law have seen delays.

Further, although an amendment to the expungements bill made the process automatic, Bryan’s administration in November asked people with prior marijuana convictions to “proactively” reach out and see if they’re eligible, citing “recent changes that have made the expungement process more complex than initially intended.”

Maryland

Though voters approved a legalization referendum in November 2022, it wasn’t until this past April that state lawmakers resolved differences between a pair of bills to regulate marijuana sales, just months before the voter-approved law took effect.

“It’s our job. We have to have a regulated market,” House Economic Matters Committee Chairman C. T. Wilson (D) said on the floor ahead of the vote on final passage on his chamber’s bill. “This is not the perfect vehicle, but it’s best we can do with the information that we’ve had… We want to make sure that we create the access that we can and that we on July 1 can fulfill our duty to our citizens who apparently wanted recreational marijuana.”

As passed, the measure set the tax rate for adult-use marijuana at 9 percent and does not tax medical marijuana.

Legal sales kicked off on schedule in July, with the majority of existing medical marijuana dispensaries opening their doors to adult customers. Two other laws took effect at the same time, including one that prevents police from using the odor or possession of marijuana alone as the basis of a search and another that made it so the lawful and responsible use of cannabis by parents and guardians cannot be construed by state officials as child “neglect.”

Kentucky

In March, a bill signed into law by Gov. Andy Beshear (D) made Kentucky the 38th U.S. state to legalize medical marijuana—meaning more than three quarters of all states have now adopted the reform, sponsored by Sen. Stephen West (R).

House lawmakers had advanced similar measures in past sessions only to have them stall in the Senate, but things proved different in 2023, with the other body taking the lead on advancing the issue.

Smoking marijuana is prohibited under the change, though patients can still access raw flower under the bill for the purposes of vaporization. Home cultivation will also remain illegal.

Patients can qualify for the new program if they have cancer, severe pain, epilepsy, multiple sclerosis, muscle spasms or spasticity, chronic nausea or cyclical vomiting, post-traumatic stress disorder or any other medical condition or disease which the Kentucky Center for Cannabis deems appropriate.

The state will need to finalize regulations July 1, 2024, with the main provisions of law set take effect on January 1, 2025.

Also this past year, lawmakers in the state, which is already a large hemp producer, sent a bill to the governor’s desk to regulate the sale of delta-8 THC products—a measure Beshear signed into law.

Notable Mentions: New Hampshire, Oklahoma, Hawaii, North Carolina and Texas

A 19-member commission in New Hampshire was supposed to issue recommendations at the beginning of December on how to legalize marijuana in the state, but that plan fell apart at the body’s final meeting, with members—some of whom opposed the reform altogether—failing to reach a consensus. A last-minute list of demands from Gov. Chris Sununu (R), who initially directed members to explore a system of state-run stores, further divided the body. Despite the failed effort, some lawmakers have already previewed a few competing legalization bills ahead the coming legislative session, while a number of others are targeting reforms to the state’s existing medical marijuana system.

In Oklahoma, meanwhile, voters in a March election sharply defeated a ballot initiative that would have legalized marijuana for adults, rejecting the measure on a 62–38 margin. For most counties in the state, the cannabis reform measure—State Question 820—was the only proposal on the ballot, a unique scenario in the history of the legalization movement. State Republican Party leaders and GOP elected officials had urged voters to reject the measure. Advocates tried to put the reform on the November 2022 ballot, but delays in signature verification by officials and the state Supreme Court’s subsequent decision in litigation meant that it missed the window to qualify for that cycle.

After Hawaii Attorney General Anne Lopez (D) announced support for cannabis legalization in April, her office released a comprehensive legalization proposal in November, and some lawmakers have already expressed interest in advancing it. Advocates also called for revisions to bolster equity provisions and remove language that could perpetuate criminalization. Hawaii lawmakers have introduced legalization legislation in recent sessions, with the Senate passing a reform bill in March, but it’s yet to be enacted. House Judiciary Committee Chairman David Tarnas (D) has said Lopez did “a really good job pulling together all of the different input and providing a comprehensive bill,” while Sen. Jarrett Keohokalole (D), chair of the Senate Commerce and Consumer Protection Committee, called the attorney’s proposal “the best version to date.”

North Carolina lawmakers made an effort to legalize medical marijuana in 2023, passing a bill through the Senate in March. But after months of stagnation in the House, Speaker Tim Moore (R) in July declared the proposal dead for the year. Months later, however, the Eastern Band of Cherokee Indians became the first jurisdiction within North Carolina’s borders to legalize marijuana. Voting on a 70–30 margin in September, members of the tribe passed the measure despite threats from North Carolina lawmakers. The tribe had previously legalized medical marijuana and, in October, issued the first legal medical marijuana cards within North Carolina.

In Texas, a number of cities made noteworthy policy decisions on marijuana this year. Perhaps most notably, leaders in Lubbock approved voted in December to put a local marijuana decriminalization initiative to voters in a special election in May 2024. A month earlier, the City Council unanimously rejected the decriminalization proposal put on the agenda after activists submitted enough signatures to force its consideration. Earlier in the year, voters in Harker Heights narrowly reaffirmed a cannabis decriminalization measure they previously approved but which was later repealed by local officials. San Antonio voters, meanwhile, overwhelmingly rejected a ballot initiative that would have decriminalized marijuana, although that proposal was included in a measure that would have also blocked enforcement of abortion restrictions.

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Legal Sales Begin In Three States And New York Rollout Continues

2023 also saw the implementation of legalization policies adopted in past years, including the launch of legal sales in Maryland, Missouri and Connecticut. New York, which saw limited sales begin on December 29, 2022, also worked to continue opening storefronts across the state this year despite a series of delays that have frustrated many new licensees.

Maryland

Maryland lawmakers worked swiftly in 2023 to pass a sales regulation bill just a few months before legalization in that state took effect, in July. And by the start of that month, nearly 100 existing medical marijuana dispensaries had been approved to start serving adults 21 and over. Within the first weekend of legal recreational sales, storefronts had sold more than $10 million worth of products. In terms of state revenue, the Maryland Cannabis Administration said in December that the state collected more than $12 million in marijuana tax revenue during the first three months of legal sales. With lawmakers in many states concerned about the long period of time it sometimes takes to implement legalization laws, a top regulator in Maryland spoke to Marijuana Moment earlier this year about how the state moved so quickly to set up the new system.

Missouri

Missouri’s first legal sale of marijuana for nonmedical use happened in February 2023, following voters’ approval of a legalization initiative the November before. Less than two months after the market launch, the change had created thousands of new jobs. One CEO said the state came to be seen as the “darling” of the cannabis industry after hitting $102.9 million in sales—$72 million for recreational marijuana—during the market’s first month of operation. By the next month, the combined sales figure had grown by nearly a quarter, to $126 million overall.

Connecticut

Connecticut began 2023 with the opening of the state’s first adult-use marijuana stores in January. State regulators granted hybrid licenses to a number of existing medical marijuana providers to supply both markets. “Today marks a turning point in the injustices caused by the war on drugs, most notably now that there is a legal alternative to the dangerous, unregulated, underground market for cannabis sales,” Gov. Ned Lamont (D) said at the time. Ahead of the launch, officials issued an advisory to medical cannabis patients encouraging them to stock up in order to “avoid long lines and traffic that may develop around hybrid retailers.” By November, however, regulators said the market had mostly stabilized, and the state doubled the adult-use purchase limit. As the year drew to a close, regulators also reminded consumers that while alcohol sales are barred on holidays like Thanksgiving, Christmas and New Year’s Day, marijuana stores can stay open.

New York

While stores in New York technically began selling to adults during the final days of 2022, sales in most parts of the state didn’t get going until this past year. And even then, the rollout in 2023 was slower than many had hoped—the result of a court-imposed blockade on processing business licenses. Regulators are now processing a backlog of hundreds of conditional retailer licenses. Halfway through December 2023, only 34 retailers across the state had received licenses, although officials said they expected another dozen shops to open by the end of the year. Amid the state’s protracted legalization launch, illicit cannabis operators have proliferated, prompting the governor to announce the state would be “ramping up” enforcement. As part of the state’s effort to speed consumer access to legal marijuana, regulators also launched a program, known as the Cannabis Growers Showcase (CGS), an initiative of OCM that allowed licensed growers and processors to sell directly to consumers. That program has since ended, but a key Assembly lawmaker says he will be filing legislation meant to extend it. The New York Senate Cannabis Subcommittee, which was established in April, has also invited witnesses to discuss potential legislative solutions to the state’s ongoing cannabis legalization implementation problems.

States Set Records For Legal Marijuana Sales

A handful of states set records for sales of legal marijuana in 2023, in some cases setting multiple consecutive records over the course of a few months. August was a particularly strong month, with at least seven states setting sales records, including Montana ($28.7 million), New Mexico ($48 million), Connecticut ($25 million), Maine ($22 million), Massachusetts ($139.3 million), Maryland ($92 million). Rhode Island‘s $9.7 million monthly sales figure, meanwhile, set a state record for the fourth consecutive month.

Rhode Island retailers also passed the $100 million mark during the state’s first year of adult-use sales, while Maine recorded more than $200 million in legal cannabis products sold during the year. In Arizona, meanwhile, legal marijuana sales in 2023 passed the $1 billion mark back in September.

As the year went on, many states with fledgling adult-adult use programs saw medical marijuana sales decline as retail sales expanded. That meant a number of states, such as Maryland, subsequently set records specifically for adult-use sales, even when overall sales numbers dipped slightly. In other states, however, such as Connecticut, increasing sales to adults more than made up for declines in medical receipts.

In Illinois, meanwhile, the state hasn’t seen an overall sales record since December 2022, but in November retailers sold more marijuana to in-state residents than ever before. And as in past years, the made significantly more revenue from cannabis than from alcohol. Michigan also made more tax revenue from marijuana than alcohol, as cannabis revenue grew by nearly 50 percent.

While most of the records were set in states with relatively young and fast-growing cannabis industries, one of the first states to legalize also notched a major milestone as Colorado this year reported passing $15 billion in marijuana sales since legalization began almost a decade ago.

More States Allow Tax Writeoffs For Marijuana Businesses

The legal cannabis industry in 2023 was still subject to Internal Revenue Service (IRS) tax rule 280E, which prohibits marijuana companies from taking standard business deductions on federal tax returns. But lawmakers in a handful of legislatures this past year nevertheless tried to make state-level changes to treat marijuana businesses with more tax parity.

Among the states to adopt a state-level version of tax reform around marijuana in the past year were New York, Illinois, Maine, New Jersey and Connecticut. In Pennsylvania, meanwhile, House lawmakers approved a similar tax cut in October despite pushback from Republicans.

New York Gov. Kathy Hochul (D) also signed a bill to ease marijuana banking compliance as congressional efforts at the reform dragged on.

States Gear Up For Interstate Cannabis Commerce

While federal prohibition still stands in the way of cross-border cannabis commerce, a number of states have already passed measures to prepare for what many see as the inevitable nationalization of the marijuana industry in the U.S. In Washington State, for example, the governor in May signed a bill into law that would allow the state to enter into compacts for interstate marijuana commerce, although it requires a federal policy change first “allowing or tolerating” cross-border trade. All three Western coastal states are now positioned to allow instate imports and exports of cannabis: Oregon was the first state to take the step in 2019, followed by California in 2022. Maine lawmakers this year, however, rejected a similar proposal.

Even with the laws in place on the West Coast, however, it will likely be some time before marijuana products cross state borders legally. While some local government groups in California had said the activity likely wouldn’t invite federal enforcement actions, the state’s attorney general said in December that engaging in cross-border commerce currently would put California at ‘significant legal risk.’

As more states eye interstate commerce laws, advocates are also calling on regulators to adopt a universal symbol to apply to cannabis product packaging. Others, meanwhile, warn that rushing to open a national marijuana market without proper protections could create monopolies and hamstring state-level equity efforts.

Anti-discrimination Policies To Protect Cannabis Users

After decades of cannabis prohibition and stigma around marijuana, some states are now working to undo employment risks that face people who use legal cannabis products.

In California, for example, Gov. Gavin Newsom (D) signed a bill into law in October to prevent most employers from asking job applicants about prior marijuana use—a change that takes effect on January 1, 2024. The new law built on existing employment protections enacted last session that barred employers from penalizing most workers for using marijuana in compliance with state law off the job.

Across the country, in Washington, D.C., Mayor Muriel Bowser (D) also signed a measure banning most workplaces from firing or otherwise punishing employees for marijuana use. The reform expanded on a previous measure lawmakers approved to protect local government employees against workplace discrimination due to their use of medical cannabis. As in New York, exceptions apply for certain safety sensitive and federally regulated jobs.

In Colorado, Gov. Jared Polis (D) signed a bill to bolster marijuana-related protections for working professionals in the state—effectively codifying an executive order he issued in 2022. The measure prohibits regulators from denying or revoking professional certifications, registrations or licenses to people based solely on prior civil or criminal violations over cannabis-related activity that’s been made legal under state law.

Washington State, meanwhile, saw the passage of a law that prevents would-be employees who use marijuana from being discriminated against during the hiring process, although employers could still fire or otherwise discipline employees for cannabis use once they’re hired.

Lawmakers in the Commonwealth of the Northern Mariana Islands also approved a similar measure this summer to end pre-employment marijuana testing for most government jobs in the U.S. territory.

Michigan officials also proposed ending pre-employment drug testing for marijuana for most government job applicants, while also giving people who’ve already been penalized over positive THC tests an opportunity to have the sanction retroactively rescinded.

And in Louisiana, a House committee advanced a bill to protect employees who use medical marijuana from being disqualified from receiving unemployment benefits, although the proposal did not proceed further.

These Were The Biggest Federal And Congressional Marijuana Policy Developments Of 2023

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