Bid to legalise recreational marijuana in Florida, US, up in smoke

A ballot measure to legalise the recreational sale and use of marijuana in Florida failed to pass late on Tuesday, sending shares of pot companies into freefall and dealing a blow to cannabis firms that had invested millions in the legalisation campaign.

The passage of amendment 3 would have legalised the sale of marijuana for recreational use to adults 21 years of age and older from medical marijuana treatment centres and other state-licensed entities.

The initiative received more than 55% of the votes in favour but fell short of the 60% majority it needed to pass.

Tilray Brands shares slid more than 10% premarket, and US-listed shares of SNDL and Cronos Group fell 13% and 4%, respectively.

Canopy Growth was down over 20% and Aurora Cannabis dropped 9%. ETF AdvisorShares Pure US Cannabis plunged 14.2%.

Florida was touted as a very lucrative market, with projections from cannabis analytics company Headset indicating the Sunshine State could have seen $4.9bn to $6.1bn (R86.5bn to R107.8bn) in sales during the first year of implementation of adult-use sales.

A total of 24 US states have legalised the recreational use of cannabis, though it continues to be illegal at the federal level. In 2016, Florida voters passed a constitutional amendment allowing medical marijuana in the state.

Cannabis companies had a lot riding on the vote, with major pot firms having made substantial contributions to Smart & Safe Florida, the group advocating for the passage of amendment 3.

Trulieve, which operates 156 stores in Florida and is the largest player in the state, has made nearly $144.6m (R2.5bn) in contributions to the group since 2022.

ATB Capital Markets analyst Frederico Gomes said if marijuana use is reclassified as a less serious federal crime, it could more than offset any effects of the failure to pass the amendment.