What to Know About Ohio’s Marijuana Legalization Referendum
An employee trims marijuana flower at Buckeye Relief's Eastlake, Ohio, cultivation facility. / Courtesy photo

With Issue 2, Ohioans have an opportunity to legalize recreational marijuana.

This story was reprinted with permission from Crain’s Cleveland and written by Jeremy Nobile.

With Issue 2, Ohioans have another opportunity this fall to legalize recreational marijuana.

With early and absentee voting for the Nov. 7 election underway, here are some key details to know about Issue 2.

What is Issue 2, and what does it mean for consumers?

Issue 2 is a proposed law that, if approved, legalizes and regulates recreational marijuana consumption for Ohioans aged 21 and older.

The most marijuana that adults may purchase or possess at one time under the proposed adult-use program is 2.5 ounces of flower and 15 grams of extracts, according to the law.

Besides permitting the use, possession and transport of marijuana legally obtained in the state, Issue 2 would also allow for adults 21 and older to grow cannabis at home with up to six plants per person but 12 plants in total per household, regardless of the number of adults living there.

Someone caught exceeding these limits could be subject to criminal penalties.

What else does Issue 2 do?

Among various elements of Issue 2 (you can read the full language of the proposed law below) is a provision establishing a Division of Cannabis Control within the Department of Commerce—which lawmakers agreed to create earlier this year regardless of whether Issue 2 is passed or not.

That division is to serve as the program’s primary regulator. Among many things, it would oversee licensing for cultivators, processors, dispensaries, testing labs and their affiliated employees.

Ohio’s existing medical marijuana program and its licensed business entities remain in place if Issue 2 is passed, but those medical licensees must still apply for adult-use licenses.

Issue 2 also would create a “cannabis social equity and jobs program” implemented by the Ohio Department of Development. According to the proposed law, that program is intended to “remedy the harms resulting from the disproportionate enforcement of marijuana-related laws and to provide financial assistance and license application support to individuals most directly and adversely impacted by the enforcement of marijuana-related laws who are interested in starting or working in cannabis business enterprises.”

In terms of licensing, regulators would be required to give preference to applicants who are certified by that program.

Additionally, Issue 2 would create a program for cannabis addiction services to be implemented by the Ohio Department of Mental Health and Addiction Services.

As explained in an outline from the Ohio attorney general’s office, that program would include “best practices for education and treatment of individuals with addiction issues related to marijuana or other controlled substances, including opioids, as well as a toll-free telephone number Ohio residents could call to obtain basic information about addiction services available and options for an addicted consumer to obtain help.”

What about taxes?

Issue 2 creates a 10% excise tax for adult-use sales paid at the point of sale. Adult-use consumers will pay that tax plus sales tax.

Medical marijuana products are subject to sales tax. They would not be subject to that excise tax. Because of this, there is still an incentive to have a medical card for patients who are eligible for one.

According to Ohio State University’s Drug Enforcement and Policy Center, taxes and fees related to the medical marijuana program have generated approximately $183.33 million for state and local government entities as of March 2023.

Ohio could see approximately $276 million to $404 million in additional annual tax revenues in the fifth year of an adult-use program, according to DEPC.

Revenues generated by the excise tax would be divided into separate funds, which help pay for: the social equity and jobs program; the substance abuse and addiction program; operation of the Division of Cannabis Control; and approved purposes for municipalities or townships that have recreational marijuana dispensaries in their jurisdictions.

How does Issue 2 impact employers, landlords and local governments?

Nothing in Issue 2 undermines the rights or abilities for employers, landlords or local governments to implement their own policies with respect to marijuana.

Stated differently, Issue 2 does not create any novel protections for employees or tenants who choose to use marijuana, and municipalities still have some degree of control over allowing dispensaries in their respective jurisdictions.

Employers can still terminate employees or refuse to hire prospective workers based on marijuana use.

Landlords would be allowed to prohibit marijuana use as well so long as that prohibition is explicitly outlined in the lease agreement.

And government entities may still pass laws prohibiting marijuana companies from operating in their jurisdictions, though operators could petition to bring the issue before voters in the next general election. If voters approve such a measure, the local government must abide.

Who supports Issue 2?

According to the latest Gallup poll, 68% of Americans favor marijuana legalization. That includes Cleveland Mayor Justin Bibb.

In Ohio itself, a recent third-party poll conducted for the campaign behind Issue 2—the Coalition to Regulate Marijuana Like Alcohol—indicated that just shy of 60% of voters surveyed support the proposed law.

The burgeoning legal cannabis industry stands to greatly benefit from Issue 2 as well, which is why several existing medical operators have provided support to the campaign.

According to a Crain’s analysis, as of this spring, the largest financial supporter of marijuana legalization in Ohio was the Marijuana Policy Project, a Washington, D.C., legalization advocacy group that credits itself with helping to pass 15 medical marijuana laws and legislative reforms in a dozen other states with adult-use programs.

While MPP had provided a little more than half of the financial contributions provided to the CRMLA campaign as of this May, the remainder came predominantly from medical marijuana companies. That includes operators such as The Firelands Co., ATCPC of Ohio (dba Klutch Cannabis), Standard Wellness Co. and Buckeye Relief.

An adult-use marijuana program could, naturally, be a boon for existing cannabis companies in the state, which are looking for a boost amid ongoing challenges and a lackluster medical program that has just 182,000 registered patients today, which is just 1.5% of the state’s population.

Who opposes Issue 2?

Several business and religious groups have voiced opposition to Issue 2, including the Catholic Bishops of Ohio, the Ohio Chamber of Commerce, the Ohio Business Roundtable, the Ohio Manufacturer’s Association and the Ohio Insurance Institute.

The business associations cite concerns with how the availability of recreational marijuana could impact absenteeism and safety in the workplace, though there are many studies suggesting those concerns may be overblown.

Of course, marijuana consumption is occurring whether Issue 2 passes or not.

According to Statista, approximately 21% of the Ohio population consumes cannabis in some form. And according to the Centers for Disease Control and Prevention, an estimated 18% of all Americans used cannabis in 2019.

How did we get here?

The measure qualified for the ballot as an indirect initiated statute, which is one of three methods permitted by the Ohio Constitution to amend state laws.

As an initiated statute, the measure first requires proponents to collect signatures of support from registered voters equal to 3% of total votes cast in the most-recent gubernatorial election.

With those signatures in hand, the proposed law is transmitted to the state legislature.

At that point, lawmakers have about four months to act on the proposal.

If no action is taken after that time, or the measure is not passed as presented, proponents may gather a second tranche of signatures enabling the proposal to come directly before voters.

This is what transpired with Issue 2.

It has taken several years to reach this point.

The campaign behind the proposed law, the CRMLA, actually formed back in 2020. However, the campaign was stymied by the COVID-19 pandemic, which made signature gathering prohibitively difficult.

The measure was poised to come before voters in fall 2022, but Republican lawmakers raised technical questions about whether the CRMLA met filing deadlines for its initial voter petitions—which were submitted within a seemingly permitted post-deadline remedy period after the campaign came up short of verified signatures.

While the CRMLA said it was prepared to fight that challenge, a settlement was reached that allowed the campaign to carry forward its initial petitions to the beginning of 2023, which set everything in motion this year.

Didn’t Ohio already vote on recreational marijuana?

The last time Ohioans voted on recreational marijuana was in 2015 via that year’s ill-fated Issue 3.

That measure would’ve written into the Ohio constitution provisions restricting cannabis cultivation to just 10 pre-selected companies. Anti-Issue 3 campaigns locked onto that detail and framed the measure as creating a cannabis monopoly, though it would’ve actually been an oligopoly.

The Issue 3 campaign also marked the debut of “Buddie,” a cartoony superhero mascot with a marijuana bud for a head that clearly didn’t win over many people: the proposal bombed with just 35% of voter support.

Despite its sound defeat, Issue 3 was a wake-up call for lawmakers who were now concerned that cannabis laws could be created without their control.

In this sense, Issue 3 opened the door for 2016’s House Bill 523, which created the legal infrastructure for the state’s medical marijuana program.

Then-Gov. John Kasich signed that bill in June 2016, and Ohio’s first medical marijuana dispensaries opened their doors in January 2019.

States typically pass medical marijuana laws before going full rec, and Ohio could be the latest example of that. If Issue 2 passes, Ohio will become the 24th state in the country to allow adult-use marijuana despite a lingering overhang of federal prohibition.

issue-2-full-text-of-ohio-measure

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