Florida Supreme Court OKs adult-use cannabis referendum for November ballot in victory for pot companies

By Steve Gelsi

Trulieve, Curaleaf and Verano are among the leading operators in the Sunshine State's medical cannabis program

The Florida Supreme Court on Monday ruled in favor of allowing Florida voters to decide whether cannabis can be sold to adults 21 and over through a referendum on the November ballot.

The adult-use ballot question could potentially allow cannabis sales in the third-largest U.S. state, with a population of more than 22 million people.

It will require a 60% favorable vote to become law.

"We approve the proposed amendment for placement on the ballot," according to a 48-page ruling by the court.

While the state's attorney general argued against the measure, the court's decision said the law only allowed it to weigh the ballot in a "narrow" way: whether the amendment conforms to the mandated "single-subject" requirement, whether the ballot summary meets the statutory standard for clarity and whether it's invalid under the federal constitution.

In light of those limited considerations, the court approved the amendment for placement on the ballot.

The decision marks a victory for the Smart & Safe Florida campaign, which has spent about $40 million as of the end of 2023 to get the referendum on the ballot. The campaign collected more than a million signatures.

The campaign has been backed by Trulieve Cannabis Corp. (TCNNF) and other cannabis industry supporters.

In 2016, Florida voters approved an expanded medical cannabis program, with 71.3% of the vote.

Along with Trulieve, other multi-state cannabis companies with a presence in Florida include Verano Holdings Corp. (VRNOF) and Curaleaf Holdings Inc. (CURLF).

Aaron Grey, an analyst with Alliance Global Partners, said Florida's adult-use market could tip the scales at $5 billion within the next five years, up from the roughly $2.6 billion medical-only market now.

"We see market leader Trulieve as best-positioned, along with Curaleaf and Verano as leaders in the current medical market" said Grey, who reiterated buy ratings on all three stocks.

Other, smaller players in Florida that could benefit include Green Thumb Industries (GTBIF), Cresco Labs Inc. (CRLBF), Cannabist Co. (CBSTF) and Ayr Wellness (AYRWF).

Trulieve Chief Executive Kim Rivers said the company is thankful the court ruled that the ballot question and its summary language met the standards for single-subject and clarity.

"Trulieve was the primary funder and supporter of the initial signature-gathering and Supreme Court efforts for the Smart & Safe campaign because we believe that Florida adults deserve the same freedoms as over half of Americans do," Rivers said, referring to the 24 states that currently allow adult-use cannabis.

Under Florida's regulations, no ballot question can address more than one single subject in state law. In this case, the court ruled that the language of the adult-use referendum met this requirement.

Also read: Cannabis stocks extend gains after Biden White House shows support of marijuana reforms

Also read: Virginia's Republican Gov. Youngkin and GOP policy panel both say 'no' to cannabis

-Steve Gelsi

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04-01-24 1712ET

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