Advocates of adult-use cannabis in Ohio say the medical marijuana industry in their state is already well established, and its success will lead to an expansion into the recreational market sooner rather than later.
Advocates of marijuana legalization faced a stumbling block when Ohio Senate President Matt Huffman, a Republican, said this month he would not bring to the Senate floor petition-driven legislation that would legalize marijuana for sale to adults who do not have a note from their doctor. The legislature has until May 28 to vote on the initiative, but if the measure does not pass, proponents will get the chance to pursue a second round of signature collections for the issue to appear on the Nov. 8 general election ballot.
“We remain hopeful that we will still get through the (legislative) process, but we also have the proven ability to gather plenty of signatures,” said Tom Haren, spokesman for the Coalition to Regulate Marijuana Like Alcohol (CRMLA), the organization behind the petition drive.
Under Ohio law, a citizen-initiated statute is a two-step process. A formula determines the number of signatures required to submit the proposed law to the General Assembly, which then has four months to act. If lawmakers fail to pass or take no action on the proposal, it triggers a 90-day window for advocates to collect a second round of signatures to place the issue on the ballot. The recreational cannabis petition collected 136,000 verified signatures, enough to get considered by the General Assembly, but would require an additional 132,877 signatures to proceed to the ballot.
Haren and the cannabis industry are confident that the adult-use proposal will jump through the latest hoop with ease and believe a ballot measure has an excellent chance of passage. He told Financial Regulation News (FRN) that Ohio has already largely decriminalized cannabis and a medical marijuana system “that rolled out without a hitch” in 2016 under House Bill 523 that has been widely accepted by the public. In fact, the state reported recently that medical marijuana sales in 2021 hit $381 million, 72 percent above 2020.
And, it is not as though the growth of the Ohio cannabis industry has been completely shut down. The state held a lottery at the end of January for 73 new medical licenses, which would be added to the current number of just 57. The lottery drew 1,473 eager applicants, and the licenses were distributed among Ohio’s 31 designated medical marijuana districts based on population and projected number of pot-seeking customers.
“We developed this initiative to build off the existing framework that was established when lawmakers passed HB 523 in 2016. It keeps in place the existing regulatory structure and oversight of the program by the State of Ohio,” said Kevin Murphy, a partner at Walter Haverfield in Cleveland and a co-founder of Standard Wellness, the only multi-state cannabis operator headquartered in Ohio.
“Commercial cultivation in Ohio is licensed and highly regulated,” Murphy added. “That is what it would look like in an adult-use market.”
The plan features a 10 percent sales tax on cannabis purchases and would also allow individuals to grow six plants for personal use, up to a dozen per household. A new state cannabis department would oversee the licensing; current medical marijuana operators would be given preference in the initial issuing of adult-use licenses.
The expansion proposal also includes a provision to allocate a portion of the cannabis tax to support social equity and jobs programs that provide financial assistance and license application support to individuals most impacted by the enforcement of marijuana-related laws who are interested in working in the cannabis business. That helps ensure that Ohio residents have an opportunity to earn a piece of the cannabis bonanza and make it a more diverse industry with room for smaller operators.
“It is something the backers of this effort feel very passionate about,” Murphy said. “Much like the current tiered system works for medical-cultivation licenses, our social-equity licenses…will bring more diversity to the state’s adult-use program.”
The reasons that Republicans who lead the state House and Senate refused to consider the current expansion proposal were based largely on concerns about impaired drivers, stoned workers operating heavy machinery, and young children within grabbing distance of their parents’ stash.
The highest-profile grassroots opposition in the state comes from the Center for Christian Virtue, which contends dispensaries can have a negative impact on business districts, do little to curb the illicit market, and can lead to the possible abuse of opioids and street drugs.
Haren dismissed the protests as, “Prohibition-style talking points from 20 years ago,” and remained convinced that legalized marijuana was already ingrained in Ohio and ready to expand to the general public in a way that isn’t a radical change at all.
“We are really following Ohio’s lead and building on our current medical marijuana infrastructure,” he said. “We looked at best practices in other states and focused on which of them works best for Ohio; it’s not breaking a lot of new ground.”