5 States Where a Recreational-Marijuana Initiative or Bill Has Failed Since 2010

When it comes to the fastest-growing industries in the U.S., few, if any, can top legal marijuana. According to Marijuana Business Daily's newest report, "Marijuana Business Factbook 2017," legal sales of the drug -- including medical and recreational weed -- are expected to grow by approximately 300% between 2016 and 2021 to perhaps north of $17 billion. Depending on your source, legal pot sales are set to grow by around 25% annually in the U.S. and/or North America over the next five-to-10 years.

A big reason why legal-marijuana sales are soaring has to do with changing public perception. Back in 1995, the year prior to California becoming the first state to legalize medical cannabis for compassionate use, just 25% of respondents favored the idea of legalizing marijuana across the country. In 2016, that same Gallup poll showed that 60% of Americans now favor legalizing pot nationally.

This substantial shift in opinion is a big reason why so many states have been able to push legalization efforts forward over the past 21 years. Today, 29 states have legalized medical cannabis, and eight have given the green light to recreational weed.

Five states where a recreational marijuana initiative or bill went up in smoke

However, a pretty steady improvement in favorability toward marijuana for two decades doesn't mean cannabis initiatives or marijuana legislation has passed in every instance. Since 2010, five states have seen their efforts to legalize recreational marijuana go up in smoke. Of course, a few of these failures turned into a passed recreational-marijuana initiative a few years later. Let's have a look at five states where voters, or legislators, struggled to get the green light for adult-use pot.

California (2010), but it's now legal

Though 2012 is often viewed as the defining moment for the recreational-marijuana industry, with residents in both Colorado and Washington state voting to legalize recreational cannabis, California attempted to do the same thing two years prior. California's Proposition 19 wound up falling short of the needed majority, with 46.5% of voters in favor of the measure. The Los Angeles Times pegged weaker-than-expected young adult voter turnout and the inability to sway more moderate voters for the measure's defeat. Mind you, if it had passed, California would have become the first state to have legalized adult-use pot.

However, California's pot proponents got their reason to cheer in the Nov. 2016 elections, with Proposition 64 overwhelmingly passing with 57.1% of the vote -- a nearly 2 million vote margin. Pundits have suggested that legalizing recreational weed could generate an additional $1 billion in tax revenue a year for the state. Considering the state's history of having a cash-strapped budget, that dollar figure proved too alluring to ignore last November.

Oregon (2012), but it's now legal

Oregon, which is often viewed as a progressive haven for the cannabis industry, had a chance to join Colorado and Washington in legalizing recreational pot in 2012, but it was the lone state where voting came up short. Ballot Measure 80, officially known as the Oregon Cannabis Tax Act, garnered just 46.6% of the vote in favor of its passage.

How on Earth did a marijuana initiative fail in Oregon? Aside from having fewer big donors in support of Measure 80, the bigger issue is how the initiative was written. Rather than following in the path of Colorado and Washington, which issued grow licenses and collected tax revenue from businesses, Oregon's measure would have issued licenses, allowed the state to purchase marijuana from growers, and then let the state sell that product to consumers for a profit.

In effect, the state would have been the dispensary. Oregonians didn't seem to care much for that idea, and it was shelved. And it's a good thing, too, because Oregon overwhelmingly passed Measure 91 in 2014, which followed the recreational-marijuana licensing model implemented by Colorado and Washington.

Ohio (2015)

In 2015, Ohio attempted to do something that no other state had ever tried: legalizing medical and recreational marijuana at the same time. Usually, states pass and establish a medical cannabis presence to "learn the ropes" of how to regulate the industry. Not Ohio. It went for the gusto, and it came up laughably short. The final tally showed the measure, known as Issue 3, losing in a landslide, with only 36.4% support.

Considering how popular marijuana has become with the public, the magnitude of the defeat shocked proponents. But the issue wasn't with the drug itself, so much as the way the law was written. Had Issue 3 passed, just 10 growers would have been apportioned licenses, and these growers would have barriers put in place to keep competition out for at least a couple of years. In effect, it would have set up a veritable cannabis oligopoly within the state, which could have had a negative impact on pricing. Voters recognized this and clearly pushed back.

Since this vote, Ohio's legislature has passed a medical cannabis law, but recreational marijuana is, for now, off the table.

Arizona (2016)

If not for Arizona, the 2016 elections would have been a "green sweep" for the cannabis industry. All four medical-cannabis measures wound up being approved last November, and four-out-of-five recreational initiatives got the green light. The exception was Proposition 205 in Arizona, which narrowly missed the mark by 67,000 votes, or a little more than 1.3%.

Why no love for cannabis in Arizona? It likely had nothing to do with the way the law was written, which was the issue in Ohio and Oregon. Instead, demographics look like the easy answer. Arizona has a relatively high percentage of seniors over the age of 65 compared to other states. It also has tended to lean toward the Republican vote in recent elections. As Gallup's data has shown, just two groups, as of 2016, oppose the expansion of marijuana: senior citizens and Republicans. The state's demographics appears to be to blame for Prop 205's defeat.

However, given how narrowly the measure was defeated, I'd venture a guess that a new proposal with focused support from proponents could have a decent chance at passing in an upcoming election.

Vermont (2017)

Last but not least, Vermont has joined the list of failed attempts to legalize recreational marijuana. Unlike the aforementioned four states, which offer the initiative and referendum (I&R) process that allows residents to vote in favor or against measures, Vermont is not an I&R state. Essentially, this means all bills are introduced and voted on at the legislative level.

Just a few months ago, Vermont's House voted 79-66 in favor of a measure that would have legalized recreational marijuana, and the state's Senate followed with a 20-9 vote in favor. Since Vermont's neighboring states of Maine and Massachusetts legalized recreational weed, its legislators thought it best to move forward with a legalization of its own to avoid possibly losing tax revenue.

Unfortunately, Gov. Phil Scott (R-Vt.) didn't see it that way, and he vetoed the bill. Specifically, Scott was concerned about underage access to marijuana, and that the bill didn't go far enough to punish those who drive under the influence of cannabis. As long as Scott remains governor, it looks unlikely that recreational cannabis will be legalized in Vermont.

Though expansion is likely within the U.S. in the near term, these states also remind proponents and marijuana-stock investors that it's not a guarantee.

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