The U.S. federal election is less than two weeks away. While millions of people will be watching closely to see whether Trump or Biden wins, some people, especially cannabis investors, will be laser-focused on specific effects of America's choice. While a Biden victory may lead to the decriminalization of marijuana, as Kamala Harris suggested in a recent debate, it is not guaranteed to result in more industry opportunities.

But as voters in New Jersey, Arizona, South Dakota, and Montana make decisions regarding state marijuana legalization next month, the presidential election could be much more important for the business of marijuana in America. For multistate operators like Acreage Holdings (ACRGF) and Curaleaf Holdings (CURLF -0.85%), which operate in more than a dozen states, election results could open up some attractive new growth opportunities.

Late afternoon aerial panorama of Atlantic City.

Image source: Getty Images.

New Jersey could be the next big market for cannabis

Some of the most exciting cannabis opportunities in America lie in the state of New Jersey. It's the largest state of the five voting on legalization this month, with a population of just under nine million people. It would be the fourth-largest market for legal (recreational) marijuana in the country, behind California, Illinois, and Michigan, if voters give marijuana the "thumbs up." Just a stone's throw away from New York City, the state could also benefit from tourists coming over from the most populous city in America.

Investors only need to look to Illinois as an example of what legalization in New Jersey could mean for the industry. Illinois only began selling recreational pot this year, and it's already become one of the hottest markets in the country. In January, its sales totaled $39.2 million. But since the pandemic, there's been a surge in pot sales, and in May it broke a record with $44.3 million in revenue. It's been hitting records every month ever since, coming in above $67.6 million in September. Illinois also reports on out-of-state resident sales -- which, at $17.9 million last month, were more than double the $8.6 million they totaled in January. New Jersey could also see a similar effect, in which out-of-state residents give cannabis sales a boost. 

Right now, it's looking like New Jersey voters will choose to legalize marijuana. According to surveys from law firm Brach Eichler LLC, 65% of people in New Jersey are in favor of legalizing marijuana, and only 29% are opposed.

More states legalizing pot could pave the way for federal legalization

Currently, there are 11 states in the country in which pot is legal. And as that number grows, it'll be harder for the federal government to ignore the issue of marijuana reform at the federal level. The one way voters can tell the government what they want is with their votes at the ballot box. And as voters show that marijuana legalization is important to them, the more likely it is that presidential candidates will see it as a way to win over those voters. A Biden victory may lead to the decriminalization of marijuana, but down the road, another candidate could promise outright legalization, especially as more states across the country legalize marijuana and it becomes more prevalent. 

Why cannabis investors should care

The bottom line for cannabis investors is that pot stocks like Curaleaf and Acreage could have more access to new markets in both the short and long term.

Acreage is based in New York. In its second-quarter results, released on Aug. 11, sales of $27.1 million for the period ended June 30 grew 53% year over year. The company's best-performing geographical segment is the New England area, with sales of $12.6 million accounting for close to half (46.5%) of its top line. Its Mid-Atlantic segment, which includes New York and New Jersey, is the second largest at $7.3 million, despite not containing a single state that's legalized marijuana. But if New Jersey permits recreational marijuana, that could change. This could potentially become Acreage's top-performing region, leading to significant revenue growth.

Curaleaf doesn't offer a breakdown by region, but it has an even more dominant presence in the U.S. than Acreage. The Massachusetts-based business reported its most recent results on Aug. 17. For the period ended June 30, its sales of $117.5 million were up 142% from the prior-year period. Curaleaf currently operates in 23 states across the country, while Acreage is in 15 nationwide. Sporting an aggressive growth strategy, Curaleaf is likely to jump on any new opportunities as they appear, especially in an advantageous location like New Jersey.

These are just two examples of cannabis companies that could benefit from some good results in November, which don't depend on a Biden or Trump win.