Even though marijuana stocks had a miserable 2019, cannabis momentum marches on in North America. For instance, by no later than April 30, we should see Mexico officially become the third country in the world to legalize adult-use weed. That follows the country's Supreme Court ruling mandating that Congress come up with rules to regulate a retail cannabis market in Mexico.

We also witnessed a marijuana first in June, with Illinois legalizing recreational cannabis entirely at the legislative level (i.e., without putting it to vote with residents of the state). Although Vermont did the same in early 2018, adult-use sales aren't yet legal in the Green Mountain State. Thus, Illinois became the first state to OK adult consumption and the retail sale of the product at the legislative level. Furthermore, the Land of Lincoln's law also calls for the potential expungement of cannabis use or possession convictions for nearly 800,000 residents.

Best of all, more history could be written in 2020 for the pot industry. Perhaps most surprising is the latest state to announce that it'll be voting on a marijuana amendment come November.

A black silhouette outline of the United States, partially filled in my baggies of cannabis, rolled joints, and a scale.

Image source: Getty Images.

No joke: Mississippi could be "going green" this coming fall

Of the 17 U.S. states that haven't legalized medical marijuana, the least surprising is arguably Mississippi. I say "least surprising" for one pretty substantive reason: Mississippi is a heavily Republican-leaning, conservative state. That matters, because Gallup's national polls have shown that people who identify as Republicans and/or conservative in ideology are far less likely than self-identified Democrats or independents to be in favor of legalizing recreational or medical cannabis. 

But that could be about to change come November.

A little more than a week ago, the Secretary of State's office in Mississippi certified that more than enough signatures were gathered to get Ballot Initiative 65 in front of voters this coming November. Initiative 65 would establish a medical marijuana program in the Magnolia State for people with a "debilitating medical condition." The definition of a debilitating medical condition tends to vary by state for those that have approved medical cannabis, but for Mississippi it will include more than 20 initial conditions, such as cancer, epilepsy, Parkinson's disease, and post-traumatic stress disorder, to name a few.

According to the provision, the state's Department of Health would be tasked with implementing the program, with possession limited to 2.5 ounces. Furthermore, no more than 2.5 ounces are permitted to be distributed to patients in a 14-day period. 

In spite of the fact that Mississippi is a conservative state, proponents of the initiative have suggested that, via polls, 77% of surveyed Magnolia State residents support the idea of giving physicians the ability to prescribe medical marijuana. 

A row of voting booths with partitions and attached pamphlets.

Image source: Getty Images.

Residents in these two states will be voting on cannabis legislation, too

However, Mississippi won't be the only state voting on a cannabis initiative come November. There are two other states where residents are guaranteed to be voting on marijuana, with perhaps more to follow.

Residents of New Jersey, for instance, will be voting on a recreational-cannabis measure in their state. Legislators in New Jersey came awfully close to agreeing on the framework of an adult-use cannabis bill last March, but it fell apart when some lawmakers pushed for an expungement clause, similar to what would pass in Illinois just three months later. As a state that generally votes with a Democratic lean, New Jersey is seen as having a strong likelihood of becoming the 12th overall state to OK the use of recreational cannabis.

The other state where marijuana is guaranteed to appear on the ballot is South Dakota, another one of the 17 states where medical marijuana is currently illegal. South Dakota will be making history as the first state to have a medical pot measure and adult-use weed measure on the ballot for vote, although these are two separate measures. Ohio had tinkered with the idea of trying to legalize both medical and recreational pot at the same time a few years ago, but a ballot measure never came to fruition.

There are other states angling to get cannabis on the ballot as well. For example, residents in Nebraska and Missouri are currently gathering signatures for measures that would legalize medical pot in Nebraska and recreational weed in Missouri. Arizona, a state that narrowly voted down adult-use marijuana in 2016, also looks to be a serious contender to legalize recreational marijuana in 2020.

A large cannabis sign that reads, Marijuana, in front of a retail store.

Image source: Getty Images.

Will MSOs' aggressive expansion tactics pay off?

Even though the U.S. federal government is unlikely to change its tune on marijuana anytime soon, it's pretty clear that momentum at the state level is going to continue throughout 2020. The big question now is, will the aggressive expansion efforts of vertically integrated multistate operators (MSO) pay off?

I can say with a relatively high degree of certainty that states like South Dakota and Mississippi aren't exactly on the radars of large-scale cannabis stocks. Even if these states were to give the green light to cannabis, the peak sales potential may not be enough to encourage MSOs to buy their way in.

However, it's a different story when talking about New Jersey, Arizona, or New York, all of which could make recreational marijuana legal in 2020. According to the "State of the Legal Cannabis Markets" report, all three states are on track for at least $1 billion in annual pot sales by 2024. This has been more than enough reason for some of the largest license-holding MSOs, such as Harvest Health (HRVSF) and Curaleaf (CURLF 0.09%), to get aggressive.

Both Harvest Health and Curaleaf have primarily grown through acquisitions, with Harvest Health in the midst of an all-share buyout of privately held Verano Holdings, and Curaleaf purchasing Cura Partners for its popular Select brand and privately held MSO Grassroots. When these deals are fully closed, Harvest Health and Curaleaf should have around 130 and 131 respective retail licenses, with Harvest Health sporting a significant presence in Arizona, and Curaleaf already having a presence in New Jersey.

These ongoing state-level legalizations are important to the needle moving in the right direction for MSOs in 2020 and beyond.