2026 Midterm Elections: Cannabis Industry Entering Significant Political Moment

In prior elections, the cannabis industry focused on legalization through ballot measures and constitutional amendments. While the November 2026 election did not see any new legalization in major jurisdictions, it reshaped the political landscape by creating a more favorable environment for expanding legalization and federal cannabis reform.

At both the state and federal levels, the election elevated several pro-reform candidates, shifted legislative control in key jurisdictions, and provided new insight into how voters view existing cannabis programs. Most notably, Massachusetts voters overwhelmingly rejected an effort to repeal an established adult-use marketplace, suggesting diminished appetite for reversing legalization once state-regulated cannabis markets become established.

A New Political Landscape in Washington

One of the most consequential outcomes of the election was the shift in congressional control. Democrats gained majorities in both chambers of Congress, creating what many cannabis policy advocates view as a more favorable environment for federal cannabis legislation.

That development does not guarantee enactment of major cannabis reform. Any federal legislation would still need to navigate committee consideration, floor votes, and presidential approval. Nevertheless, we can expect renewed attention to several long-pending proposals.

Among the most significant is the Cannabis Administration and Opportunity Act (“CAOA”), sponsored by Senators Cory Booker, Chuck Schumer, and Ron Wyden. Unlike ongoing rescheduling efforts, CAOA would remove marijuana entirely from the federal Controlled Substances Act while creating a comprehensive federal regulatory framework and addressing criminal justice and social equity concerns. Another significant piece of legislation is the STATES 2.0 Act, sponsored by Ohio Representative David Joyce, which would exempt state and qualifying tribal law-compliant marijuana activity from most Controlled Substances Act restrictions, permit interstate transportation between jurisdictions where marijuana is legal, and treat compliant marijuana as unscheduled. It would also establish FDA oversight of marijuana products and protect compliant activity from federal trafficking liability, forfeiture, money-laundering treatment, and Internal Revenue Code § 280E.

Other measures likely to remain part of the federal conversation include:

• SAFER Banking legislation designed to expand banking access for state-legal cannabis businesses;
• Veterans’ access legislation concerning medical cannabis treatment;
• Additional criminal justice reforms related to marijuana convictions; and
• Tax reforms affecting cannabis businesses, including continued discussion regarding Internal Revenue Code § 280E.

Whether any of these measures ultimately become law remains uncertain. However, for the first time in several years, federal cannabis reform is being discussed as a realistic legislative possibility rather than purely theoretical.

The States to Watch in 2027

Important developments may occur at the state level where efforts have historically stalled.

Pennsylvania

Pennsylvania may now be the state with the clearest path toward adult-use legalization, with political conditions more favorable now than at any point in recent years. Democrats secured control of the Pennsylvania Senate while retaining control of the Governor’s office and state House. This gives the party unified control for the first time in decades and removes one of the principal obstacles that has repeatedly prevented adult-use legislation from advancing.

Reform advocates have long viewed Pennsylvania as one of the most significant adult-use markets in the country due to its population, existing medical program, and geographic position in the Northeast and Mid-Atlantic. For Ohio operators, Pennsylvania’s importance is obvious. A large, adjacent adult-use market could significantly affect competition, investment, and regional cannabis commerce throughout the Midwest.

Whether recent electoral gains ultimately translate into legislation remains uncertain. Nonetheless, Pennsylvania is likely to be among the most closely watched states during the next legislative session.

Wisconsin

Democrats won both legislative chambers and the Governor’s office in Wisconsin, which does not have medical or adult-use marijuana and currently operates a limited CBD-only program. Historically, legislative opposition has been among the principal barriers despite polling indicating substantial public support for reform.

Governor-elect David Crowley has endorsed full legalization, strengthening the prospect that Wisconsin will seriously consider comprehensive reform in 2027.

Following the election, cannabis advocates believe Wisconsin may be better positioned for a serious legalization debate than in prior years. If Wisconsin proceeds with legalization, it would remove one of the largest remaining prohibitions in the Upper Midwest and add additional pressure on neighboring non-legal states.

Iowa

Governor-elect Rob Sand has changed the conversation around Iowa’s existing restrictive medical program. He openly campaigned on legalizing, regulating, and taxing adult-use marijuana and has publicly argued that cannabis should be regulated in a manner similar to alcohol. He has stated that his primary motivation is tax revenue as part of a broader fiscal strategy for the state to close a $1.4 billion budget deficit.

While gubernatorial support alone does not create legalization, Iowa will enter 2027 with a governor who has affirmatively endorsed adult-use legalization, an important shift for a state that has traditionally moved cautiously on cannabis issues.

Kansas

Kansas may also warrant attention. Democrat Cindy Holscher campaigned on cannabis legalization and leads a close governor’s race. If that lead holds, Kansas would enter 2027 with an executive branch more receptive to reform, although any proposal would still need to move through the legislature.

Texas

While Texas remains one of the nation’s most challenging jurisdictions for comprehensive cannabis reform, the election produced significant developments. Texas is particularly noteworthy because it already has a substantial cannabinoid marketplace despite maintaining one of the nation’s more restrictive marijuana laws.

Texas is increasingly less a “prohibition” state and more a state with a bifurcated cannabis market: highly restricted medical marijuana on one side and a larger, legally operating hemp-derived cannabinoid industry on the other. The state operates the Compassionate Use Program, which permits access to low-THC medical cannabis for qualifying patients, but Texas has not legalized adult-use marijuana. At the same time, hemp-derived cannabinoid products became widely available throughout the state following enactment of the 2018 Farm Bill and Texas’s subsequent hemp legislation. While Texas enacted restrictions on intoxicating hemp products earlier in 2026 (including a ban on smokeable hemp products and the scheduling of delta-8 THC and other synthetic cannabinoid products), litigation has made enforcement of those restrictions difficult.

Both Governor-elect Gina Hinojosa and Senator-elect James Talarico voted “no” on the legislation that sought to significantly restrict intoxicating hemp-derived THC products in Texas. Talarico also expressed support for federal cannabis reform efforts.

The election also changed the legislative path in Austin. Democrats flipped the Texas House, while Republicans retained the Senate by a 19-to-12 margin. Any cannabis legislation will therefore still require Republican support in the Senate.

Texas voters also replaced two prominent opponents of reform. Lieutenant Governor Dan Patrick, a leading opponent of cannabis reform, lost to Vikki Goodwin. Ken Paxton lost his U.S. Senate bid, meaning Texas will have a new attorney general. Paxton had sued Texas cities over voter-approved marijuana decriminalization ordinances.

North Carolina

Political changes at both the state and federal levels in North Carolina may create additional momentum for discussions surrounding medical marijuana and broader cannabis reform. Like Texas, North Carolina remains a state where meaningful reform has been discussed for years but has struggled to advance through the legislative process. At this time, North Carolina remains one of the few states that has no form of legalized marijuana, and while low-THC CBD oil is legal for a limited group of specific patients, hemp-derived intoxicants have proliferated across the state.

At the federal level, Democrats captured a Senate seat and gained five seats in the House of Representatives, which may improve the political conditions necessary for federal reform. On the state level, Democrats won control of the North Carolina House for the first time since 2010 and cut Republicans’ Senate majority to just two seats.

That House shift may be particularly significant because medical cannabis legislation has previously passed the North Carolina Senate but stalled in the House. Governor Josh Stein’s advisory council has also recommended adult-use sales, creating a broader basis for renewed debate in 2027.

Massachusetts

Perhaps the most important cannabis policy signal from the 2026 election did not involve legalization at all. Massachusetts voters overwhelmingly rejected Question 8, a ballot initiative that would have repealed the Commonwealth’s adult-use cannabis program while retaining medical marijuana. The effort was closely associated with organizations opposing legalization and represented one of the first major attempts to dismantle an established adult-use market. Voters rejected the measure by a substantial margin.

The Massachusetts vote is notable when viewed in the context of the broader 2026 ballot landscape. Nearly every other significant marijuana-related ballot proposal either failed to qualify, was withdrawn, was suspended, or was otherwise prevented from reaching voters. Efforts to legalize adult-use marijuana in Florida, Nebraska, West Virginia, and New Hampshire did not make the ballot, medical and decriminalization initiatives in Idaho failed to qualify, and a referendum effort challenging portions of Ohio Senate Bill 56 was ultimately suspended. Meanwhile, repeal-oriented measures targeting existing adult-use markets in Arizona and Maine also never reached voters. While new legalization campaigns continue to face procedural and political hurdles, repeal efforts against established adult-use markets are struggling to gain meaningful traction.

Idaho provided a separate signal about direct democracy. In early results, voters rejected HJR 4 by approximately 68% to 32%. The measure would have barred citizen initiatives to legalize cannabis, so its defeat preserved voters’ ability to pursue legalization through the initiative process.

Local measures also showed continued support for incremental reform. Dayton voters approved misdemeanor decriminalization with nearly 75% of the vote, while Houston voters made marijuana possession the city’s lowest law-enforcement priority.

What Does This Mean for Ohio?

For Ohio’s cannabis industry, the election’s effects are likely to be felt less through immediate changes in state law and more through developments occurring elsewhere that present an opportunity for continued expansion into new state markets.

Ohio operators should pay particular attention to:

• Potential legalization efforts in Pennsylvania;
• Emerging reform discussions in Wisconsin and Iowa;
• Congressional consideration of SAFER Banking legislation and other industry-focused reforms;
• Continued debate surrounding the Cannabis Administration and Opportunity Act; and
• Potential federal tax and regulatory changes affecting cannabis businesses.

As Ohio’s adult-use market continues to develop, legalization efforts in neighboring states and renewed federal activity could have significant implications for capital formation, mergers and acquisitions, interstate competition, and long-term business planning.

Looking Ahead

Unlike prior election years, the 2026 election did not produce an immediate wave of cannabis legalization. What it did produce was a series of political developments that may influence cannabis policy for years to come, including strong support for established regulated cannabis markets.

Several states now appear better positioned for meaningful reform discussions. At the federal level, congressional leadership changes may create new opportunities to advance cannabis banking, tax, criminal justice, and descheduling proposals.

If you have questions about what the 2026 election means for your cannabis business, please do not hesitate to reach out to a member of the Frantz Ward Cannabis Law and Policy group.

This post is for general information and does not constitute legal or tax advice.