Bloomberg Businessweek - USA (2020-11-09)

20

◼ ELECTION BloombergBusinessweek November 9, 2020

Marijuanameasurespassedinallfive

statesthathadthemontheballoton

Nov.3—evenindeeplyredpartsofthe

country.Thevictorieswilllegalizerec-

reationaluse inArizona, Montana,

NewJersey,andSouthDakota,aswell

asmedicaluseinMississippiandSouth

Dakota.“Cannabiswon,andwonbig,”

saysBorisJordan,executivechairman

ofCuraleafHoldingsInc.,oneofthe

largestU.S.cannabiscompanies.“It’sa

greenlandslide.”

Cowen& Co.analystVivienAzersays

thechangecouldboosttheannualmar-

ketforcannabisproducersbymorethan

$3billion.Potcouldbringmuch-needed

revenueforstatesthataresufferingfrom

coronavirus-causedslumpsinemploy-

mentandtaxreceipts.

The latest results mean recre-

ationalmarijuanaislegalin 15 states

andapprovedformedical purposes

almostnationwide.Still,thelikelihood

thatRepublicansretaincontrolofthe

Senatedimstheprospectsforfederal

legalization.The MOREAct,which

UBER

SCORES

▶Californiavoterspasseda proposal

byapp-basedcompaniestokeep

driversascontractors

Votersin Californiahandily passed

a ballot measure backed by Uber

Technologies Inc. and Lyft Inc. to

enshrinethestatusofapp-baseddriv-

ersasindependentcontractorsrather

thanemployees. The decision may

shapethefutureoftheU.S.gigecon-

omyaslawmakersinIllinois,NewYork,

andelsewhereconsidergreaterlabor

protectionsforthegrowingranksof

gigworkers.

Thevoteexemptsapp-basedride-

hailinganddeliverycompaniesfrom

havingtotreatdriversasemployees,

thoughtheymustnowoffersomemod-

estbenefits,suchasminimumpaywhile

ridersareindrivers’carsandhealth-

caresubsidies.A MorganStanleyanalyst

estimatedthesenewperkswillraise

Uber’slaborcostsbyabout5%.

The app-based companies have

arguedtheinitiative,Proposition22,will

preserveflexibilityfordriversandkeep

faresfromrisingforcustomers.Labor

groupsandothercriticssayit allows

companies to deny drivers their right to

substantial benefits and wages.

Uber, Lyft, DoorDash, Instacart,

Postmates, and other supporters poured

a record $206 million into the “yes” cam-

paign, about 10 times what the “no”

side spent. “These companies are the

new robber barons, and they’re using

the system to establish a privileged sta-

tus for themselves,” says William Gould,

a law professor at Stanford and former

chairman of the National Labor Relations

Board under President Bill Clinton. “Two

hundred million-plus is much cheaper

from their perspective than paying the

employees these benefits that the legis-

lature has established for them.”

Thestatetallyshowsabout58%of

voterssupportedthemeasure.Prop 22

wasbornoutofa statebillknownas

AB5 thelegislaturepassedlastyearthat

tookeffectinJanuary,whichsetshigher

standardsforworkerstobeclassified

asindependentcontractors.Theprop-

ositionwouldbedifficulttoreverse.

Amending it—in a waythat doesn’t

change its original meaning—would

requirea ⅞supermajorityinthelegis-

lature.Overturningit wouldrequirea

newballotmeasure.�JoelRosenblatt,

RobertIafolla,andErinMulvaney

wouldremovecannabisfromthelistof

federally controlled substances, is prob-

ably off the table. Instead, legal change

will more likely happen under the less

expansive States Act, which would leave

legalization issues to states.

Election Day wasn’t only about

weed. Oregon agreed to decriminal-

ize possession of small quantities of

heroin, meth, and other street drugs

and allowed medical use of psilocy-

bin, or “magic mushrooms.” Voters in

Washington, D.C., passed a measure to

lower the police enforcement priority

for personal use of entheogenic plants

and fungi, such as psilocybin mush-

rooms and ayahuasca.

The politics of pot had become

entwined with the social justice wave

sweeping across the nation this year.

New Jersey Governor Phil Murphy

encouraged voters to legalize recre-

ational cannabis, citing the dispropor-

tionate impact of marijuana-related

arrests on communities of color. In

Oregon, a portion of tax revenue from

marijuana sales will be used to fund

addiction recovery centers. Montana’s

initiative will let people convicted of

marijuana offenses apply for resen-

tencing or the expunging of records;

Arizona’s includes a process to expunge

pot offenses as well.

Some proponents of the ballot mea-

sures used the expected tax revenue

from legal pot as part of their successful

pitches. Arizona’s proposal would levy

a 16% excise tax on retail sales of mari-

juana. Although steep, that pales in com-

parison to the 37% excise tax Washington

state imposes on legal pot, which is also

subject to the state’s 8% sales tax.

The passage of recreational legaliza-

tion in New Jersey will pressure poli-

ticians in neighboring New York and

Pennsylvania to follow suit. With New

York struggling to fill a $13 billion budget

gap, “the temptation of up to $300 mil-

lion in annual revenue from legal mar-

ijuana may prove too strong to resist,”

Eric Kazatsky, senior U.S. municipals

strategist at Bloomberg Intelligence,

wrote in an analysis of the ballot wins.

�Tiffany Kary and Brenna Goth, with

Kristine Owram

WEED WAS

A CLEAR

WINNER

▶ Legalization victories in

five states could speed the march

toward national acceptance

A VICTORY