Florida Marijuana Legalization Ballot Measure Fails

(Reuters) – A ballot measure to legalize the recreational sale and use of marijuana in Florida failed to pass late Tuesday, sending shares of pot companies into freefall and dealing a blow to cannabis firms that had invested millions in the legalization campaign.

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

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

Tilray (NASDAQ:TLRY) Brands shares slid over 10% premarket, and U.S.-listed shares of SNDL and Cronos Group (NASDAQ:CRON) fell 13% and 4%, respectively.

Canopy Growth (NASDAQ:CGC) was down over 20% and Aurora Cannabis (NASDAQ:ACB) 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 $4.9 billion to $6.1 billion in sales during the first year of implementation of adult-use sales.

Twenty-four U.S. states have so far legalized 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 $144.6 million 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.