The five states that legalized marijuana in ballot initiatives this past Election Day are quite a mix, from low-key South Dakota in the Midwest, to lively, populous New Jersey in the east. 

In this video segment taken from the Nov. 18 feed of Motley Fool Live, healthcare and cannabis bureau chief Corinne Cardina Jurney and longtime Motley Fool contributor Eric Volkman zero in on the pair of legalizing states that hold the most potential now that the cannabis business there has been liberated.

 

Corinne Cardina: So let's talk about what some are calling the "Green Wave." We saw some changes pass on Nov. 3. In New Jersey, Arizona, Montana, and South Dakota, all those states legalized recreational marijuana passed. I'm sorry, not South Dakota -- South Dakota had medical and recreational cannabis on the ballot in two separate initiatives, both which passed.

Then Mississippi is going forward with a medical marijuana program and they had a choice between a really restrictive option, or less restrictive option and they are going with the less.

First, Eric, are you surprised?

Eric Volkman: I'm surprised that those initiatives passed as cleanly as they did. I expected them not to be as clear in places like South Dakota. I didn't think it would be such a stunning victory. Same thing with Mississippi, those states comparatively tend to be maybe a little bit more traditional, a little bit more conservative. Especially in the case of South Dakota, where they were completely flipping from full illegality to complete liberalization. The scope of this victory surprised me, but not the fact that they won.

Corinne Cardina: Definitely. Of these new markets, which of them do you think offer especially big opportunities for multi-state operators? We will get into some specific multi-state operators in a second. But which of these markets should investors be watching the most?

Eric Volkman: I think the big one on the East Coast is New Jersey, the big one on the West Coast is Arizona.

One simple reason is that both of them are very populous states. New Jersey, I believe, has nearly 9 million people. Arizona is 7.5 million and change. I know I'm going to get a lot of flak from people from those states, saying, ''No you're no where near the actual number.'' It's something like that.

The point is, they both have a lot of people there, a lot of potential consumers. Also, let's remember that both of them are at least a little bit established and that they've had medical marijuana being legal for at least a little while.

Of the two, I would say Arizona, first of all, is longer established in that segment. Arizona too, I think because it's a West Coast state. West Coast states tend to be a little bit more friendly toward marijuana, I think they tend to have more consumers. I don't know the exact number, but they tend to have more recreational marijuana smokers. So I would definitely keep an eye on Arizona.

New Jersey also, I think, has an awful lot of potential. New Jersey too, one advantage it has is that there are several states around there that haven't, at least not yet, legalized recreational marijuana. I'm thinking mostly of New York, since Jersey, for a lot of New Yorkers, is just right across a bridge or a tunnel. I can see some effect of basically marijuana tourists coming in to get recreational weed.

So, yeah, those two states, I would say.