This November, you will have the power to effectively change the course of the medical marijuana industry forever. Issue 2 will officially make cannabis legal for recreational use, giving all Ohio citizens the opportunity to enter the marijuana industry equitably.
Issue 2 aims to create an equitable framework that allows all Ohio citizens to participate in the versioning marijuana industry. Unlike previous initiatives that were criticized for attempting to create a monopoly, Issue 2 seeks to level the playing field. This could mean more opportunities for small businesses and individual entrepreneurs, not just large corporations with significant capital.
What is Issue 2?
● The “Regulate Marijuana Like Alcohol Initiative”, also known as Issue 2, is the commercialization, regulation, and legalization of recreational marijuana for adults ages 21 and above in Ohio.
● The initiative proposes a comprehensive regulatory structure overseen by the Division of Cannabis Control. This body will be responsible for licensing operators and ensuring compliance with state laws. This centralized approach aims to streamline the process and maintain high standards across the industry.
The Journey of Recreational Marijuana in Ohio
● So far, 23 states have legalized recreational marijuana, making Ohio the 24th state if the initiative passes in November.
● In 2015, Ohio voters rejected the Marijuana Legalization Initiative, with a little more than half voting “no”. This initiative was not popular among Ohio voters, and was highly criticized for attempting to create a monopoly on marijuana, and lacked backing from pro-legalization groups.
● In 2016, we saw the legalization of medical marijuana when House Bill 523 was passed in the House of Representatives 71-25.
● In 2021, the Coalition to Regulate Marijuana Like Alcohol (CRMLA) began its efforts to get the initiative on the ballot. The group spent four months gathering signatures to submit to the secretary of state.
● In 2022, several new states, like Maryland and Missouri, approved recreational marijuana through legislation like Issue 2.
● In 2023, The Coalition to Regulate Marijuana Like Alcohol was given a 10-day cure period to get the 679 signatures they were short on. During this time, they received more than ten times that, raising the total of valid signatures to 127,772 and ensuring the initiative for the ballot.
What Does a Recreational Ohio Look Like for Consumers?
● The Division of Cannabis Control will be responsible for licensing marijuana operators and facilities and will oversee the compliance and standardization of marijuana businesses and production in Ohio. This ensures a standardized approach to compliance and quality across all marijuana businesses in Ohio.
● Allows the legal cultivation, processing, sale, purchase, possession, and home growth of marijuana.
● Adults 21 & older to possess up to 2.5 ounces of marijuana and up to 15 grams of marijuana concentrate. Additionally, adults will be permitted to cultivate up to six marijuana plants at home, with collective households being able to cultivate up to 12 plants. The cultivation must take place within a secured area that is not visible from public spaces and prevents access by individuals under 21. If two or more adults reside in a single residence, up to twelve cannabis plants can be cultivated.
● The creation of additional protection for those who partake in permitted adult use of cannabis by establishing the cannabis social equity and jobs program. Additionally, shielding confidential information that will identify any adult cannabis users and their application information from being disclosed as public record.
● The taxation of all recreational marijuana products at 10%, with all tax revenue going to the adult use tax fund and quarterly distributed into four other funds:
○ 36% to the cannabis social equity and jobs fund
○ 36% to the host community cannabis facilities fund
○ 25% to the substance abuse and addiction fund
○ 3% to the division of cannabis control and tax commission fund
● Passing Issue 2 could generate over $400 million in new tax revenue for the state of Ohio
● Employers are not required to accommodate an employee's use, possession, or distribution of adult-use cannabis. They can also establish drug-free workplace policies, which could affect consumers who are also employees.
● Adult-use cannabis cannot be used in certain public spaces like churches, public libraries, public playgrounds, public parks, or schools.
● The sum of Delta-9 THC and 87.7% of Delta-9 THCA present in the product or plant material will be considered as THC, which could have implications for the potency of products available to consumers.
● The controlled and regulated sales and use of adult-use cannabis aim to reduce illegal marijuana sales and provide a safer, regulated product. It also aims to limit the transportation of out-of-state cannabis into Ohio.
What Does Recreational Ohio Look Like for Licensed Marijuana Operators?
● The Division of Cannabis Control (The Division) operating within the Department of Commerce.
● The Division will regulate, investigate and penalize adult use cannabis operators, adult use testing operators, and individuals required to carry a license.
● Limit Criminal liability for certain financial institutions that provide financial services to adult use cannabis operators or testing laboratory licensed. Financial institutions can request detailed operator information, potentially easing the process for operators to secure loans or other financial services.
● If passed, all operations will switch to The Division over a 30 day period, but the industry as a whole may take longer.
What are the arguments?
○ U.S. Rep. Dave Joyce (R): "Modeled after the alcohol industry, which accounts for the unique needs, rights, and laws of each state, this proposal establishes a regulatory regime based on the specific desires of individual communities. The measure lets communities determine for themselves the best approach to cannabis within their own borders by keeping it out of communities that do not want it. It also allows employers to maintain policies prohibiting employee drug use and keeps cannabis out of the hands of anyone under the age of 21 without the consent of a medical professional."
○ Tom Haren, spokesperson for the Coalition to Regulate Marijuana Like Alcohol: "We are proposing to regulate marijuana for adult use, just like we do for alcohol. Our proposal fixes a broken system while ensuring local control, keeping marijuana out of the hands of children, and benefiting everyone."
○ Tax Revenue: Supporters argue that legalizing marijuana for recreational use will generate substantial tax revenue for the state.
○ Law Enforcement: The legalization would reduce the burden on law enforcement agencies.
○ Social Equity: The initiative aims to address social equity concerns, providing opportunities for marginalized communities.
○ Consumer Choice: Some believe adults should have the right to make their own decisions about marijuana use, especially since it is considered less dangerous than cigarettes and alcohol.
○ Protect Ohio Workers and Families: "We know that recreational marijuana legalization is meant to make a few investors rich, not to make Ohio better. Legalizing recreational marijuana is today’s version of Big Tobacco - big corporations getting rich at the expense of our kids and society. That’s why people from all walks of life are coming together to vote 'NO' this November."
○ Ohio Governor Mike DeWine (R): "I do not, however, support legalizing marijuana for recreational use. I have seen the negative effects it has had in states that have legalized it and fear that it would also lead to increased use by underage kids and that small children could consume marijuana-laced foods that look like candy."
○ Public Health: Opponents are concerned about potential adverse effects on public health, including increased rates of addiction and impaired driving incidents.
○ Impact on Youth: There is concern about the impact of legalization on young people and the potential for marijuana to serve as a gateway drug to more dangerous substances. Even though the age to obtain marijuana is 21 and older.
○ Economic Concerns: Critics argue that the initiative is designed to make a few investors rich at the expense of society.
In summary, if Ohio's proposed adult-use cannabis regulations are enacted, they will establish a comprehensive legal framework for the industry. The initiative, if passed, will go into effect 30 days after approval, allowing adults aged 21 and up to cultivate cannabis at home starting December 7th.
Businesses with existing medical cannabis licenses will have a competitive advantage, as they will be eligible for preferential adult-use licenses. However, the full transition to this new regulatory landscape may take up to a year, as the state will need time to hire staff and develop specific regulations. This phased approach is similar to what was observed in Arizona, where recreational cannabis became legal in November 2020, but the first state-licensed sales didn't occur until January 2021. Importantly, there will be no cap on the number of licenses that may be awarded, potentially increasing competition within the industry.
For patients currently enrolled in the medical marijuana program, the proposed regulations do not specifically address how medical and recreational programs will operate in parallel. However, it is worth noting that in states like Michigan, the number of medical marijuana cards decreased after the legalization of adult-use cannabis. In Ohio, if the initiative passes, all recreational cannabis purchases would be subject to a 10% tax, in addition to existing state and local sales taxes. This may incentivize medical cardholders to retain their cards, as they would be exempt from the adult-use tax.
The proposed regulations are comprehensive, covering everything from specific definitions to advertising guidelines and THC content limits. Financial institutions will have limited criminal liability when providing services to cannabis operators, which could facilitate business loans and other financial services for dispensaries.
While there is some opposition to the initiative, most are against repealing it if passed. Any amendments would likely focus on additional protections for businesses and possible caps on THC content.
● Household Growing: How does this work with roommates, multiple family homes, and properties with multiple structures? Adult use consumers can cultivate, grow, and possess not more than six cannabis plants at their primary residence. If two or more individuals who are at least 21 years old reside at a single residence, not more than twelve cannabis plants can be cultivated or grown. The cultivation must take place within a secured closet, room, greenhouse, or other enclosed area on the grounds of the residence that prevents access by individuals less than 21 years of age and is not visible from a public space.
● What is the process for home growers to become licensed? The document does not provide details on a separate licensing process for individuals who wish to grow cannabis at home for personal use.
● Adults 21+ being able to sell: What does this mean for non-operators? Adults are allowed to transfer up to six cannabis plants to another adult use consumer as long as the transfer is without remuneration (they can’t receive funds) and not advertised or promoted to the public.
● Will licensed brands (like Harvest) be allowed full advertisement and marketing freedom? This is still the regulation Division of Cannabis Control may adopt rules regulating advertisements of license holders to prevent advertisements that are false, misleading, targeted to minors, promote excessive use, or that promote illegal activity. However, these rules shall not overly burden the legitimate commercial speech of adult use cannabis operators in communicating with adult use consumers. The Division may also adopt time and place restrictions to prevent advertising targeted to minors. The Division can conduct audits of a license holder's published advertisements to ensure compliance and may require a license holder to stop using an advertisement if it violates the rules.