What's being voted on
This is the day the marijuana industry has been eagerly anticipating: Election Day. Residents in nine states are headed to the polls right now to determine the fate of cannabis in their state. One of those states is Arkansas, where residents will determine whether or not medical marijuana should be legal.
The Arkansas Medical Marijuana Amendment of 2016, or Issue 6 as it's more commonly known, would allow Arkansas to join the 25 other states, and Washington, D.C., which have already legalized medical cannabis. State and local taxes generated from the sale of medical marijuana would be used to cover the costs of regulating the industry, and would also be used for various other purposes, including vocational and technical training and workforce training programs.
This is the second go-around for Arkansans, who voted against a similar medical cannabis measure in 2012.
What the polling suggests
Despite there being overwhelming support for medical marijuana in the U.S. as a whole, voting in Arkansas, based on the latest polls, could be very much a toss-up.
A recently released University of Arkansas poll found that 51% of voters are in favor of Issue 6, which, given the survey's margin of error, doesn't guarantee that a majority of those polled are in favor of the measure.
Another somewhat recent poll from Talk Business & Politics/Hendrix College found that 49% favored the measure compared to 43% who opposed it. A full 8% remained undecided. Again, taking the margin of error into context, Issue 6 could simply be too close to call at this point.
What's at stake
What makes an Arkansas cannabis vote so intriguing is that it's being held in a state that traditionally leans toward the Republican Party. While there are no precise lines in the sand, Republican voters tend to have a less favorable view of pot -- either recreationally or medically -- than do Democratic voters. Thus, an approval of medical cannabis in Arkansas would be an impressive hurdle for the pot industry to clear.
Passage of Issue 6 would also mean that more states would have now legalized medical cannabis than have not. While this would merely be a psychological victory for the industry, it does give an added boost of confidence that lawmakers on Capitol Hill may have an added incentive to revisit marijuana's scheduling at some point in the future.
However, regardless of how Arkansans vote, prospective investors are probably going to want to stick to the sidelines. Even if we do witness a record number of states approving marijuana today, there will be too many obstacles standing in the way for investors to succeed.
In general, the pot industry is still highly fragmented and run by numerous mom-and-pop-type dispensaries. In order for investors to really take part in cannabis's growth potential, we'd need to see a consolidation in the space. A lack of access to basic banking services, and higher corporate income tax rates due to a lack of normalized business deductions, act as icing on the cake as to why investors are better off monitoring today's votes from the sidelines.