The effort to legalize recreational marijuana in Ohio is funded by some of the biggest players in the state’s cannabis industry.
And starting next year – if Issue 2 passes – these companies could end up with the lion’s share of licenses to sell products in the adult market.
Ohio voters will decide Nov. 7 whether to approve the bill, which would allow people 21 and older to purchase, possess and cultivate marijuana. Products would be taxed at 10% in addition to the sales tax, with revenues going to three state funds and municipalities that have dispensaries.
Medical Marijuana Businesses proposed for the first time the measure in 2021, opting for an initiated law instead of a constitutional amendment like the failure of the 2015 legalization effort. They ultimately secured a spot on this year’s November ballot after clashing with legislative leaders opposed to recreational marijuana.
Supporters say No. 2 would drive out the illicit market and bring back taxpayer dollars that Ohioans currently send to Michigan. It would also open doors for businesses that sell medical cannabis in Ohio and want to expand their customer base.
But some in the industry question whether this benefits Number 2’s benefactors too much.
“It’s not really a deal breaker. The people who are footing the bill for the proposed law are obviously going to try to make it favorable for them,” said Greg May, a cannabis attorney at the law firm Mac Murray & Shuster of Ohio. . “I don’t think it’s a mystery or anything. Is it a bit much? Maybe.”
Who will sell recreational marijuana?
If voters approve Question 2, the Division of Cannabis Control would have nine months to distribute the first adult-use licenses to businesses already enrolled in the state’s medical program. And it specifies who gets what:
- Large Tier I cultivators would obtain three adult-only dispensary licenses and one adult-only cultivation license for their current establishment.
- Small Tier II growers would get an adult-use cultivation license and a dispensary license.
- Existing medical dispensaries could obtain authorization to sell adult-use products at their current location.
- Processors, who turn the flowers into edible products, would get an adults-only processing license, but not dispensaries.
- Dispensaries that are not connected to a cultivator or processor could obtain an adult-use dispensary license in a different location.
Issue 2 would also create a social equity program aimed at helping business owners who are disadvantaged because of their race, gender, ethnicity or economic status. Through this initiative, the state would issue 40 Level III cultivation licenses and 50 adult-use dispensary licenses to eligible participants within the first nine months.
Beyond that, the state cannot issue additional licenses for two years. Supporters say this setup will ensure that the adult-oriented market is up and running without any problems.
“The program will start like almost every other state, with a transition to recreational by existing licensees so that the program can get off to a smooth start with experienced operators who know how to cultivate, process and distribute marijuana products,” said Andy Rayburn, CEO of Buckeye Relief.
As written, Issue 2 attributes the greatest number of dispensaries to Tier I practitioners, some of whom contributed hundreds of thousands of dollars to the campaign for its adoption.
Pure Ohio Wellness and its CEO gave $375,000 to the Coalition to Regulate Marijuana Like Alcohol in the first half of this year, according to state campaign finance reports. The group also received $210,000 from the CEO of Standard Wellness, $122,500 from a partner at Riviera Creek and $50,000 from Harvest Grows.
Rayburn donated $50,000 when the campaign launched in 2021.
Another big contributor this year — donating $295,000 — was Chicago-based Cresco Labs, which has cultivation and processing facilities and five dispensaries in Ohio. Recent coalition fundraising and spending won’t be available until late October.
“Make it as fair as possible”
Knowing this, some see imbalances in number 2 that do not appear to be a coincidence.
Brian Scotese owns standalone processor Lighthouse Sciences in Eastlake and wondered why he wouldn’t be eligible for an adult-use dispensary license. He said marijuana businesses are more successful if they are vertically integrated, meaning they grow, process and sell their own cannabis products.
Scotese wants Number 2 to pass, but he also believes it rewards verticals over independent operators. Such tensions have plagued Ohio’s medical cannabis industry for years. For example, producers clashed over legislation This would allow Tier I growers to expand their facilities more than Tier II growers.
“I think the state has a responsibility to make the program as fair and just as possible to avoid lawsuits and other things that can be avoided if you treat everyone in the program fairly or equally,” he said. Scotese said.
May, the cannabis advocate, agrees.
“What type of program do we want to have?,” May said. “Do we want a program that brings together large, multi-state operators, or do we want a program that gives people in Ohio a chance to get into this industry?”
Proponents of No. 2 cite the social equity program as proof that they don’t want to monopolize the adult-use market.
Ohio tried to reserve licenses for racial minority businesses under the medical cannabis program, but a judge deemed unconstitutional in 2018. This time around, No. 2 directs state officials to set program standards to ensure they follow the law, said Tom Haren, a spokesperson for the coalition.
Haren said the two-year limit on licenses would give social equity businesses time to get started.
“We want to compete with the black market,” he said. “We want to compete with Michigan. This framework is put in place to make our adult market much more representative of the state as a whole. I think you will see a number of new Ohio small businesses and entrepreneurs entering the market. »
Haley BeMiller is a reporter for the Ohio bureau of the USA TODAY Network, which serves the Columbus Dispatch, the Cincinnati Enquirer, the Akron Beacon Journal and 18 other affiliated news organizations across Ohio.