Florida’s recreational marijuana bill has been killed, but there is hope.

Marijuana measures on state ballots don’t offer the same “wow” factor they once did. But states that can offer large-scale cannabis sales often put recreational vehicles on the ballot. This election cycle marked the long-awaited attempt to legalize marijuana for personal use in Florida.

Amendment 3 allows adults 21 and older to purchase and possess up to 3 ounces of cannabis for personal use. It also authorizes medical cannabis dispensaries to grow, sell and distribute recreational weed for personal use.

Image source: Getty Images.

Florida’s cannabis amendment is a hot topic.

The Sunshine State is the third-largest cannabis market in the United States, behind Michigan and California. This only applies to medical marijuana sales. Unfortunately, the buzz surrounding Amendment 3 exploded on Election Day.

Despite the support of Republican presidential candidate Donald Trump, only 55.9% of the approximately 10.6 million votes cast for Amendment 3 favored its passage.

Because legalizing adult-use weed would require amending the Sunshine State’s constitution, the bill would have needed a 60 percent “yes” vote to pass. This is undoubtedly disappointing for marijuana companies that have been steadily building a presence in Florida, including: Trulive Cannabis (TCNNF -8.27%), summer holdings (VRNO.F -7.31%)and AYR Wellness (AYRW.F -6.21%).

But wait a minute. There is also a rare hope

Although the failure of Amendment 3 is not what the majority of Floridians had hoped for, it is still good news for companies like Trulieve, Verano, and AYR, who have enjoyed tremendous success selling high-margin medical marijuana.

Under the Joe Biden administration, work has begun to change the schedule of marijuana from a Schedule I to a Schedule III substance under the Controlled Substances Act (CSA). The Drug Enforcement Administration plans to hold hearings before administrative law judges to begin in early December, which could clear the way for the next administration to reschedule the official schedule for cannabis.

Even without approval for recreational marijuana in Florida, changing the schedule for cannabis under the CSA would be a huge win for Trulieve, Verano, and AYR. Currently, Internal Revenue Code Section 280E does not allow companies that deal in federally controlled substances to take normal tax deductions other than cost of goods sold. A potential conversion to Schedule III would remove this burden and immediately improve the profit potential of these companies.