Where Is Marijuana Legal?

Marijuana has been used for thousands of years, primarily for treating medical conditions. It was used in ancient China as an anesthetic. It was one of five herbs taken to help relieve anxiety during India's Iron Age. Cannabis seeds have been found in Viking ships, possibly for use in alleviating pain.

And for most of human history, marijuana use was legal. That began to change in the early 20th century, though. Between 1916 and 1931, 29 U.S. states banned the use of marijuana. The Marihuana Tax Act of 1937 essentially made cannabis illegal across the U.S. Many other countries outlawed marijuana during the first half of the century, with more nations added to the list in subsequent decades.

But the tide is turning. Several countries and many U.S. states have legalized the use and sale of medical marijuana. A couple of countries and a growing number of U.S. states allow the use and sale of recreational marijuana. Where is marijuana legal now? Here's what you need to know.

Global overview

Following are the countries that have broadly legalized the use and sale of marijuana as of Nov. 30, 2018:


Medical Marijuana Legal?

Recreational Marijuana Legal?

Canada Yes Yes
Uruguay Yes Yes
Argentina Yes No
Australia Yes No
Chile Yes No
Colombia Yes No
Croatia Yes No
Cyprus Yes (for cancer patients only) No
Czech Republic Yes No
Denmark Yes No
Finland Yes No
Germany Yes No
Greece Yes No
Israel Yes No
Italy Yes No
Jamaica Yes No
Luxembourg Yes No
Macedonia Yes No
Malta Yes No
Mexico Yes (with THC content < 1%) No
Netherlands Yes No
Norway Yes No
Peru Yes No
Poland Yes No
Portugal Yes No
San Marino Yes No
South Korea Yes No
Sri Lanka Yes No
Switzerland Yes No
United Kingdom Yes No
Zimbabwe Yes No

Canada claims the largest overall market where marijuana use of any kind is legal at the federal level. Medical cannabis has been legal in the country since 2001, although initially patients had to grow their own marijuana plants. New regulations in 2013, subsequently replaced in 2016, opened the door for licensed producers to supply medical marijuana to patients across the country.

Justin Trudeau ran for the office of prime minister in 2015. He pledged to legalize recreational marijuana if elected. Trudeau won the election -- and began working to advance legislation through the Canadian parliament to fulfill his campaign promise. Those efforts succeeded, with the Canadian senate voting a final time to legalize recreational marijuana on June 19, 2018. Under the Cannabis Act (also known as bill C-45), recreational marijuana became available for purchase by adults on Oct. 17, 2018.

The Canadian marijuana market in 2017 totaled around $600,000. Arcview Market Research and BDS Analytics project this figure will soar to $5.5 billion by 2022.

However, Germany is likely to become the top international market for medical marijuana where use is legal at the federal level. The country's medical marijuana market is expected to increase to $1.6 billion by 2022 from around $260 million in 2018. Germany claims the largest population in the European Union, and its laws make medical cannabis easily available, which makes rapid growth for the German medical market likely.

Current status of legalization in the U.S.

Both medical and recreational marijuana use remain illegal at the federal level in the U.S. The Controlled Substances Act of 1970 placed cannabis in the most restricted category, Schedule I, which includes drugs that the U.S. government deemed had no accepted medical use and a high potential for abuse.

But individual states began to push back against federal marijuana policy, beginning with a ballot initiative in California, passed in 1996, that legalized medical marijuana in the state. Other states soon followed California's lead. In 2012, Colorado and Washington state approved ballot initiatives that legalized recreational marijuana.

Following are the U.S. states, districts, and territories that have broadly legalized either medical marijuana or recreational marijuana as of Nov. 30, 2018:


Medical Marijuana Legal?

Recreational Marijuana Legal?

Alaska Yes Yes
California Yes Yes
Colorado Yes Yes
District of Columbia Yes Yes
Maine Yes Yes
Massachusetts Yes Yes
Michigan Yes Yes
Nevada Yes Yes
Oregon Yes Yes
Vermont Yes Yes
Washington Yes Yes
Arizona Yes No
Arkansas Yes No
Connecticut Yes No
Delaware Yes No
Florida Yes No
Guam Yes No
Hawaii Yes No
Illinois Yes No
Louisiana Yes No
Maryland Yes No
Minnesota Yes No
Missouri Yes No
Montana Yes No
New Hampshire Yes No
New Jersey Yes No
New Mexico Yes No
New York Yes No
North Dakota Yes No
Ohio Yes No
Oklahoma Yes No
Pennsylvania Yes No
Puerto Rico Yes No
Rhode Island Yes No
Utah Yes No
West Virginia Yes No

This list changed as a result of the November 2018 U.S. elections. Residents of Michigan voted to legalize recreational marijuana, while Missouri and Utah citizens voted to legalize medical marijuana. The only setback for marijuana legalization was in North Dakota, where a ballot initiative to legalize recreational marijuana was defeated.

California is by far the largest marijuana market in the U.S. -- and in the world. The state's marijuana sales were close to $3 billion in 2017. The state's total marijuana market is projected to soar to $7.7 billion by 2022.

Of the U.S. states where only medical marijuana is legal, Michigan currently ranks as the largest market, with estimated 2017 sales of $811 million. However, Florida could be on track to jump past Michigan within the next four years, with estimated medical marijuana sales of more than $1.7 billion.

In addition, 15 other states have cannabidiol (CBD) laws that permit the legal use of the nonpsychoactive cannabis component for medical purposes. Several of these states also allow the use of medical marijuana with low levels of tetrahydrocannabinol (THC), the primary psychoactive component in cannabis. Four states -- Idaho, Kansas, Nebraska, and South Dakota -- have no statutes permitting the legal use of marijuana.

Sen. Cory Gardner (R.-Colo) and Sen. Elizabeth Warren (D.-Mass.) are promoting bipartisan legislation that would result in the U.S. federal government's recognizing state laws that have legalized either medical or recreational marijuana. Both Gardner and Warren represent states that have legalized both medical and recreational marijuana. In April, President Trump signaled his support for Sen. Gardner's effort to keep the federal government out of the way of states that have legalized marijuana. The bill introduced by Sen. Gardner and Sen. Warren has not been brought up for a vote in the full Senate yet, though.

Dynamics behind the push to legalize marijuana

Even before significant efforts began to legalize marijuana, several countries and U.S. states moved to decriminalize the drug through the relaxation of criminal penalties associated with personal marijuana use. In 1973, Oregon became the first U.S. state to decriminalize marijuana, establishing a relatively low fine of $100 for possession of up to one ounce of the drug.

The biggest factor behind the push to legalize marijuana has been growing public support for legalization. A survey conducted by the Center for American Progress (CAP) and GBA Strategies in June 2018 found that 68% of respondents supported legalizing marijuana -- a record high level. Of those in favor of legalization, 40% indicated that they "strongly support" marijuana's being legalized.

Some might question a survey sponsored by CAP because of its left-leaning political views. However, other surveys have also indicated increasing levels of support among Americans for marijuana legalization.

For example, results announced in October 2018 from a Pew Research Center survey found that 62% of Americans think that marijuana should be legalized. That level of support is nearly double the 31% of respondents favoring legalization in 2000.

One major reason marijuana legalization has picked up overall support among U.S. citizens is that millennials are heavily in favor of legalization. Millennials are expected to overtake baby boomers as the largest living adult generation in 2019. The Pew Research Center survey reported that an overwhelming majority -- 74% -- of millennials support legalization of marijuana. However, majorities of all other generation groups except the Silent Generation -- Americans born between 1925 and 1945 -- also support the legalization of marijuana.

But why has public opinion shifted toward support for marijuana legalization? A CBS News poll taken in April found that only 9% of Americans felt that marijuana was more dangerous than alcohol. Slightly more than half of Americans think that alcohol is more dangerous than marijuana.

There are also more reasons now for people to believe that the use of marijuana can be beneficial for some medical conditions. A report released by the National Academies of Sciences, Engineering, and Medicine in 2017 found "conclusive or substantial" evidence for marijuana's efficacy in treating chronic pain, chemotherapy-induced nausea and vomiting, and multiple sclerosis spasticity. In addition, the report cited moderate evidence supporting the efficacy of cannabis in treating short-term sleep issues, fibromyalgia, chronic pain, and multiple sclerosis.

The most important wins for medical marijuana came in 2018. In June the U.S. Food and Drug Administration (FDA) approved CBD drug Epidiolex for treating Dravet syndrome and Lennox-Gastaut syndrome (LGS), both of which are rare forms of childhood-onset epilepsy. In September the U.S. Drug Enforcement Administration (DEA) classified Epidiolex as a Schedule V drug -- the least restrictive category available.

Impact following marijuana legalization

What has happened in countries and states following marijuana legalization? It's still early for most areas, but some effects have been seen.

In Uruguay, which legalized recreational marijuana in 2017, illegal drug trafficking of marijuana has plummeted. Cannabis hasn't become a huge industry in the South American country yet, however. This is due in large part to banks pressuring pharmacies in Uruguay not to sell marijuana.

Canada's legalization of medical and recreational marijuana created a rapidly expanding industry. The country's top licensed producers sport multibillion-dollar market caps and have attracted attention from major companies outside of the cannabis industry.

The U.S. states that were among the first to legalize recreational marijuana probably provide the best information about the impact of legalization. Colorado's total marijuana sales topped $1.5 billion in 2017 and more than $1 billion as of August 2018. Since 2014 the state has collected more than $840 million in tax revenue from marijuana sales.

Washington saw sales of legal marijuana totaling $1.3 billion in its fiscal year 2017, which ended on June 30, 2017. The state collected $319 million of that amount in taxes and license fees. Half of the total collected revenue went to help fund the state's Basic Health Plan Trust Account, which provides healthcare services to those in the state who lack coverage. Another 31% of the total went to the state's general fund, with the remaining amount distributed among substance abuse programs and other public services.

Studies have also indicated that opioid use is lower in states that have legalized medical marijuana than in states that haven't. Data from Medicare's drug database showed a 14% reduction in opioid prescriptions in states with laws allowing relatively easy access to medical marijuana than in other states. It should be noted, however, that this analysis showed only a correlation between lower opioid use and states' medical marijuana policies, not firm grounds for concluding that the medical marijuana access caused the lower opioid use.

Marijuana-related arrests have generally fallen in states with legal recreational marijuana. Concerns about legalized marijuana's effect on such problems as teen marijuana use and traffic fatalities have so far not been borne out, with rates remaining relatively steady in states that have legalized recreational marijuana.

On the other hand, some negative impacts have followed marijuana legalization. There have been more traffic-related insurance claims in states that have legalized recreational marijuana. And in Colorado, overall crime rates have gone up since recreational marijuana legalization, while the trend has been downward for the U.S. as a whole. However, it's not certain whether Colorado's increasing crime rate is a result of marijuana legalization or other factors.

Stocks to watch

The genie is out of the bottle with respect to marijuana legalization. This means plenty of investing opportunities. Below are key marijuana stocks to watch that are well positioned to profit from the expansion of marijuana legalization.


Type of Business

Market Cap

Canopy Growth (NYSE: CGC) Marijuana producer $11.1 billion
Innovative Industrial Properties (NYSE: IIPR) Real estate investment trust (REIT) $498 million
Organigram Holdings (NASDAQOTH: OGRMF) Marijuana producer $524 million
Origin House (NASDAQOTH: ORHOF) Marijuana distributor $365 million
Scotts Miracle-Gro (NYSE: SMG) Supplier to cannabis industry $4.2 billion

Canopy Growth: This company ranks as one of the top Canadian licensed producers of marijuana. Canopy claims 4.3 million square feet of growing space currently licensed for production, with another 1.3 million square feet planned. It has supply agreements in place with all the Canadian provinces that have finalized plans for the recreational marijuana market. Canopy also has a solid presence in key international markets, including Germany. Alcoholic beverage giant Constellation Brands (NYSE: STZ) has invested $4 billion in Canopy and owns a 38% stake in the company.

Innovative Industrial Properties: Organized as a real estate investment trust (REIT) -- a company that owns and leases income-generating real estate -- Innovative Industrial Properties focuses on the U.S. medical marijuana industry. It currently owns nine properties in Arizona, Maryland, Massachusetts, Michigan, New York, and Pennsylvania, all of which have legalized medical marijuana.

Organigram Holdings: Like Canopy Growth, Organigram is a Canadian licensed cannabis producer. Although smaller than Canopy, Organigram still ranks among the 10 largest marijuana growers in terms of annual production capacity. The company has secured supply agreements with seven Canadian provinces for the recreational marijuana market. Organigram also has partnerships in the Australian and German medical marijuana markets.

Origin House: Formerly known as CannaRoyalty, Origin House is the largest distributor of marijuana in California, with more than 50 brand partners. The company also markets several of its own recreational marijuana brands. Origin House's acquisition of 180 Smoke, a leading vape retailer with 26 stores, will give it a retail presence in the Canadian market.

Scotts Miracle-Gro: Perhaps best known for its consumer lawn and garden products, Scotts Miracle-Gro has made several acquisitions to become the top supplier to the U.S. cannabis industry. The company's Hawthorne Gardening subsidiary supplies fertilizers, hydroponics, lighting systems, pumps, ventilation systems, and other products to marijuana growers. Scotts ranks as the largest U.S.-based marijuana stock in terms of market cap.

What's next for marijuana legalization?

More countries are likely to legalize medical marijuana in the coming years. More U.S. states are likely to do so as well. It's hard to argue that marijuana doesn't have at least some medical benefits in the face of studies indicating otherwise.

It wouldn't be surprising for more countries and U.S. states to legalize recreational marijuana also. Public support for doing so is growing. And the tax revenue being generated in states and countries that have already legalized recreational marijuana could prove tempting to those that haven't.

The big question is whether or not the U.S. will legalize marijuana. Rep. Dana Rohrabacher (R.-Calif.), a staunch supporter of President Trump, stated in October 2018 that the president will work to legalize medical marijuana at the federal level and ensure that the federal government will leave recreational marijuana legalization to the states. Rohrabacher was defeated in the November 2018 elections, but the results of those elections could improve the chances that federal marijuana laws will change in the near future.

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Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Brands, Innovative Industrial Properties, OrganiGram Holdings, and Origin House. The Motley Fool has a disclosure policy.