Maryland was the state most likely to green-light cannabis for adult use Tuesday, as 70% of voters have signaled support in polls, but four others were also voting on similar measures. Ballot measures in Missouri, Arkansas and North Dakota would establish a regulated retail trade for cannabis, while South Dakota voters were deciding whether adults should be allowed to possess or grow cannabis without considering retail sales.

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In early returns, the other four states were voting against those measures, however. In Missouri, 53.7% of Missouri voters were against legalization with about a quarter of precincts reporting; in Arkansas, 56.4% of voters were saying no with less than 10% of precincts reporting; in North Dakota, 56.8% of voters were denying legalization with about 35% of precincts fully reporting; and in South Dakota, about 54% of votes were on the no side with roughly a quarter of precincts fully reporting.

The adult-use cannabis market in Maryland alone is estimated to be worth at least $1 billion. If cannabis sales to adults are legalized in Maryland, Missouri, Arkansas and North Dakota, the market in those states could be worth more than $2.8 billion by 2026, according to estimates from MJBizDaily.

Cannabis stocks rose Tuesday as investors weighed the impact of the voting on the cannabis business. The AdvisorShares Pure US Cannabis ETF
MSOS,
+3.89%
was up 2.5% on Tuesday, while the ETFMG Alternative Harvest ETF
MJ,
+0.96%
rose 0.2%.

As more states allow adult use, cannabis companies stand to gain a wider market for their products. Wana Brands, which is being acquired by Canopy Growth Corp.
CGC,
-0.31%

WEED,
-2.75%,
supplies edibles to existing medical markets in Maryland, Arkansas and Missouri. The company is keeping a close watch on the referendum in those states, Chief Executive Nancy Whiteman told MarketWatch.

“We have our fingers crossed,” Whiteman said. “It would be huge for us, and for the communities and citizens of those states, if those states approve it.”

Also read: Amid steep inflation, one thing is getting cheaper: cannabis

Medical cannabis is already legal in all five states with measures up for a vote on Tuesday. Maryland’s program dates to 2013, while Arkansas and North Dakota legalized medical cannabis in 2016, Missouri in 2018 and South Dakota in 2020. That means some marijuana companies already have footholds in those markets.

Companies with exposure to include Body & Mind Inc.
BMMJ,
+3.87%
in Arkansas; Curaleaf
CURLF,
+3.18%
in Arkansas, Maryland and Missouri; Verano
VRNOF,
+3.38%
in Arkansas and Maryland; Columbia Care
CCHWF,
+5.06%
in Maryland and Missouri; and Green Thumb Industries
GTBIF,
+3.40%

GTII,
+2.83%
in Maryland, said BTIG analyst Jonathan DeCourcey.

Other companies poised to benefit include MariMed Inc.
MRMD,
-0.86%
and Trulieve Cannabis
TCNNF,
+2.94%,
both of which operate in Maryland.

Maryland’s and Missouri’s referendums rank as the most important this November, given the sizable populations of each state, DeCourcey said.

If voters approve the measures, more challenges await. In most cases, the state legislature or other governmental body must then craft a set of regulations to set up adult-use markets. That process can take years, but in states with robust medical programs, it tends to go more smoothly.

The 19 states that already have adult-use programs either operating or in the process of launching are Alaska, Arizona, California, Colorado, Connecticut, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia and Washington, as well as the District of Columbia.

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