Ohio cannabis regulators last week released a draft proposal of rules to govern recreational marijuana production and sales. Voters legalized recreational marijuana in Ohio with the passage of Issue 2 in the November 2023 off-year election, making the state the 24th in the nation to largely end the criminal prohibition of cannabis.

Issue 2, which passed with 57% of the vote, legalized recreational marijuana in Ohio for adults 21 and older, who are permitted to possess up to 2.5 ounces of marijuana and up to 15 grams of cannabis concentrates. The new law also legalizes marijuana cultivation for personal use, allowing adults to grow up to six cannabis plants at home. Households with more than one adult are permitted to grow a total of 12 plants.

The successful ballot measure also created a new state agency dubbed the Division of Cannabis Control (DCC), which will have the authority to “license, regulate, investigate, and penalize adult use cannabis operators, adult use testing laboratories, and individuals required to be licensed,” according to the text of Issue 2. 

Until last week, the DCC had not yet released any rules to govern recreational marijuana production and sales in Ohio, where medical marijuana was legalized by state lawmakers in 2016. Without regulations, consumers in the state were left without a legal avenue to purchase recreational weed, a situation Governor Mike DeWine characterized as “goofy,” according to a report from online news source Cleveland Scene.

Proposed Rules Set Requirements For Legal Weed Businesses

The new proposed regulations set rules for 13 areas of recreational cannabis production and sales, using the regulations from other states that have legalized marijuana as a guide. Among the new regulations is a requirement that retail pot dispensaries be located at least 500 feet away from schools, parks, playgrounds, churches and libraries. 

Sales of recreational cannabis are restricted to adults aged 21 and over, who are required to show identification. Customers of dispensaries are required to be “escorted and monitored by an assigned registered employee at all times.” Retail dispensaries are required to close by 11 p.m.

Additionally, dispensaries are not permitted to choose or change a business name without approval from the DCC. Before beginning operations, dispensaries are required to deposit $50,000 in an escrow account, while testing labs must deposit $7,500 and the largest weed cultivators are required to maintain an escrow account of $750,000.

The regulations put limits on dispensary owners’ interest in other cannabis businesses, limiting them to one cannabis cultivator, one cannabis processor and eight retail dispensary locations. The proposed rules also set security requirements for cannabis businesses and mandate standards for the proper disposal of cannabis waste.

Retail Weed Sales Could Begin Within Weeks

Under the new rules, existing medical marijuana dispensaries could be licensed to sell adult-use cannabis as soon as June 7. Recreational dispensary licenses will be issued later, perhaps as soon as September 7.

Brian Vicente, founding partner of the cannabis and psychedelics law firm Vicente LLP, characterized Ohio’s proposed adult-use cannabis regulations as “a sensible starting point for the Buckeye state.”  

“Unlike recent legalization states like New York that opted to draft legalization regulations from scratch, the Ohio rules clearly borrowed ideas from earlier states—resulting in a refreshing level of sophistication and understanding of the needs of both cannabis consumers and business owners,” he wrote in an email to High Times. “These regulations include commonsense ‘best practices’ for businesses in important areas like waste disposal and quality assurance, which should lead to a smooth roll-out and ongoing operations. Consumers will be able to access cannabis from stores until 11 p.m. and through drive-up windows, which will foster widespread access.”

The DCC is accepting public comments on the proposed adult-use cannabis regulations through April 17. The agency noted that the rules have not yet been finalized and are subject to change by state lawmakers.

“The following information is based on the initiated statute ballot measure approved by voters. Because it is an initiated statute, it may be amended by the state legislature,” the proposal reads. “Any amendments to the statute could impact the timeline for the rulemaking and licensing processes, and dispensary sales.”

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Republican Ohio Gov. Mike DeWine called on state legislators to amend and whittle down the provisions of Issue 2, the law voters in the state just approved, before the bill takes effect on Dec. 7. And since Issue 2 is a citizen initiative, Ohio lawmakers could lawfully make changes to the law, but they only have about a month to do so. 

Ohio Capital Journal reports that less than two days after voters approved adult-use cannabis in Ohio, the governor wants to scale it back.

“My recommendation to the General Assembly is that they take action to make sure that both rights are protected,” DeWine said Thursday. “People have a right to smoke it. People have a right to consume it. But also that everybody else’s who doesn’t choose to do so is also protected with their rights as well.”

DeWine is “already plotting to change Ohio’s legal weed law,” Benzinga reports. 

The people who fought hard to campaign for Issue 2 are ready for a battle. “I can’t believe in 2023 we’re actually talking about elected officials not respecting the will of the voters and not respecting the outcome of an election,” Tom Haren, spokesperson for the Coalition To Regulate Marijuana Like Alcohol, which led Issue 2, told the Columbus Dispatch.

The governor claims he’s not ignoring the will of his constituents. “We respect what the people have done,” DeWine said, suggesting that he’s not in fact going against the will of Ohio voters. “What the people have clearly told us is they want legal marijuana in Ohio. We are going to see that they have that. We’re also going to live up to our responsibility to all the people in the state of Ohio, whether they voted for it or voted against it. In doing so, he wants to make sure various protections are in place, starting with Ohio’s children.”

The people in Ohio have already decided. Nov. 7, voters in Ohio approved a ballot proposal, Issue 2, to legalize adult-use cannabis, beating out voters in opposition to the measure. The election’s outcome makes Ohio the 24th state to allow adult-cannabis, 14 of which have done so via a public vote. 

Per the new legislation, adults ages 21 and up can legally buy and possess up to 2.5 ounces of cannabis and grow plants at home—up to six plants per person and 12 plants per residence, where at least two adults reside. A 10% tax will be imposed on cannabis purchases and will go toward administrative costs, addiction treatment, municipalities with dispensaries, and social equity and jobs programs.

Ohio Senate President Matt Huffman, who also voiced opposition to the bill, said lawmakers could clarify language “regarding  limits for THC and tax rates as well as other parts of the statute.”

Ohio House Speaker Jason Stephens (R-Kitts Hill) agreed. “Now is the time for the legislature to lead on how best to allocate tax revenues while responsibly regulating the industry,” Stephens said in a statement.

A similar scaled-back cannabis law took place in Utah in 2019. House Bill 3001, which lawmakers passed in a legislative special session, was installed by the Republican-dominated Utah Legislature in response to the voter-approved Proposition 2, which Utah voters approved in November 2018.

HB 3001 was supposedly a “compromise bill.” But critics of the bill say that H.B. 3001 actually functions as a replacement to Proposition 2. Organizations and people such as Rocky Anderson sued the state for attempting to undo the will of voters. Could the same happen in Ohio?

Protect the Children

“One goal will be to make sure that they are protected from advertising in regard to marijuana,” DeWine said. “We want to do everything within our power to reduce the number of inadvertent consumption of gummy bears, cookies and other products that have marijuana.”

Fueling the myth that adults are passing out edibles to trick-or-treaters, an actual incident re-sparked fears that cannabis is a threat to children.

In 2022, a 10-year-old student at Upper Arlington elementary school brought her dad’s infused gummies to school and shared with them with fellow students at lunch. After eating the gummies, the students became sick and were all taken to a local hospital for treatment.

“We have every responsibility to do everything we can to keep those [emergency room visits] numbers down as much as we can,” DeWine said.  

DeWine also wants to reduce the number of drivers who smoke cannabis. Opposition group Protect Ohio Workers and Families claim that if Ohio legalizes pot, it would be subject to an additional 48 fatal vehicle crashes and 2,298 more injury crashes per year if Issue 2 passed.

“I would hope … that when Dec. 7 comes and goes that we will be able to inform the people of the state exactly how this program will roll out,” he said. “I think it would be good if that was all done by the 7th so that we’re not in a situation of taking something away from people.” 

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A cost-benefit analysis of the impact of a proposed cannabis legalization measure in Ohio has determined that legalization would generate a net economic benefit of $260 million per year. Ohio voters go to the polls next week to decide on Issue 2, which would legalize marijuana for adults 21 and over and set the stage for a regulated cannabis industry.

In a study released last week, Columbus-based Scioto Analysis attempted to quantify the net economic impact of Issue 2 if it prevails at the polls. To complete the analysis, researchers used studies from Colorado and Washington, two states with mature regulated cannabis markets, in conjunction with economic and census data and crime statistics to estimate the costs and benefits of legalization. Taken together, the data showed an estimated net economic benefit of $260 million per year.

One of the biggest economic impacts would come from the approximately $190 million in additional tax revenue the state would receive from cannabis taxes. The study notes that this figure, however, does not represent the total social benefits recognized from legalization.

“Tax revenue on its own is not a social benefit, but rather a transfer from taxpayers to the public sector that is then used to pay for goods and services purchased by the government,” it says. “Thus, benefits are only generated when goods and services purchased by governments have positive spillovers.”

Researchers explained that the economic benefit is even greater than the taxes raised, however, because of the way the money is spent. Of the tax revenue raised by Issue 2, 36% is directed to the Cannabis Social Equity and Jobs Fund and 25% is reserved for the Substance Abuse Addiction Fund. Using data from other states with similar funds, the report estimated that the Ohio equity and jobs fund would create $5.76 in benefits for every dollar spent and the substance abuse fund would create $9.19 per dollar.

“The key reason benefits are likely to outweigh costs when it comes to marijuana legalization is how the tax dollars raised are going to be used,” policy analyst Michael Hartnett, said about the study. “The programs outlined in the ballot initiative have historically been very efficient ways to use public dollars, and will likely generate a lot of value for Ohioans.”

Legalization Would Create Thousands of Jobs

The analysis also factored in the new jobs that would be created by the regulated cannabis industry once legalization takes effect.

“Our models predict that Ohio will add roughly 3,300 new jobs in the first year after legalization,” the report notes, as cited by the Ohio Capital Journal. “Assuming these jobs are full time and pay matches the average wage across the state of Ohio, this will amount to about $190 million in wage benefits for workers across the state. Since these jobs are likely to include part-time work and may be lower than the average wage across the state, this may represent an upper bound on the value of employment generated by legalization.”

The state would also have the added economic benefit of fewer arrests for cannabis-related offenses and the resulting court and incarceration costs needed with prohibition.

“One study on arrest rates in Washington found that marijuana arrests fell by 87% for adults aged 21+ and by 46% for adults aged 18-21 after legalization of the sale and purchase of cannabis for recreational purposes,” the study said. “This confirms that for the population that would be allowed to legally use cannabis recreationally, arrests almost completely disappear, but the effect is smaller for the population where it would still be illegal to use cannabis.”

“Using data from the FBI’s Uniform Crime Report on the number of cannabis-related arrests in Ohio, we estimate that there would be about 4,400 fewer arrests per year if recreational cannabis were legalized,” the study continued. “Adding up the cost of those arrests, and assuming that 6% of those people would have been convicted of felonies, this amounts to over $38 million in savings for Ohio.”

The study subtracted the negative economic impacts of legalization to arrive at its estimate of net benefits. One of the greatest costs incurred is a loss of productivity in some industries that was documented in other states after legalization.

“One study from 2017 found that across four industries (mining; construction; arts, entertainment, and recreation; and accommodations and food Service) average productivity per worker fell by just over 1% in states that legalized recreational cannabis,” the report said. “Monetized, this equates to roughly $900 of lost productivity per worker for Ohio.”

Using federal employment data, the report said, “we estimate that legalizing recreational cannabis will cost workers across the state about $760 million in lost productivity in the first year of legalization.”

The study also identified negative implications on public safety caused by legalization including an increase in arrests for intoxicated driving. The study estimated that legalization would lead to an additional 1,700 intoxicated-driving arrests each year in Ohio, costing about $130 million.

But overall, the report estimated that legalization would result in a $260 million net benefit for the state.

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The official voting day for Ohioans is Nov. 7, but early voting has already begun on Oct. 11. This is a significant year for cannabis because a cannabis legalization measure, which is labeled as Issue 2, is appearing on the ballot. However, some legislators are not thrilled with the idea that cannabis legalization could be approved, and announced plans to possibly repeal the law if it does get passed.

Senate President Matt Huffman spoke on the Senate floor in opposition of SR-216, stating that it will be “coming right back before this body” and will likely receive changes. “We’re going to have a mental health crisis on our hands,” Huffman said, if voters approve Issue 2. “We are going to pay for this for years and years and years, and it’s only going to get worse.” He added that he will push to review and repeal parts of the bill if it gets passed.

“If Issue 2 passes, there will be more teenagers in the state of Ohio committing suicide,” Huffman said. “And our reaction to that will not be, ‘Let’s make marijuana illegal,’ because by that time, more people will be making lots of money. It will be, ‘Maybe we should hire drug counselors, get into the schools, talk about kids not taking drugs.’ But by then it will be too late. It’ll be even more part of our culture. And no, I’m not a scientist, but I’m a person who can look at facts and listen to scientists and know that that’s true.”

Just as early voting began last week, Republican Sen. Mark Romanchuk and Rep. Terry Johnson, along with 14 other cosponsors, introduced Senate Resolution 216, claiming all of the potential harms that legalization will bring if voters choose to vote and approve Issue 2.

“…The proposed statute authored by the commercial marijuana industry does not serve the best interests of the people of Ohio, will bring unacceptable threats and risks to the health of all Ohioans, especially children, will create dangers in the workplace and unacceptable challenges and costs to employers, will make Ohio’s roads more dangerous, will impose significant new, unfunded costs to Ohio’s public social services, and serves only to advance the financial interests of the commercial marijuana industry and its investors…,” the bill text stated.

Many of the points of concern in the bill have long been used by anti-cannabis supporters, such as calling cannabis a gateway drug that leads four of our 10 people to try other drugs, and that cannabis use leads to opioid use disorder. While it claims that drug overdoses are the “leading cause of injury and death” in the state, with an estimated 33,000 Ohioans having died due to drug overdoses between 2011-2020, state records for COVID-19 deaths are recorded at over 42,000. 

The Center for Disease Control and Prevention shows that the top 10 leading causes of death in 2017 for Ohioans was heart disease, cancer, accidents, chronic lower respiratory disease, stroke, Alzheimer’s disease, diabetes, flu/pneumonia, kidney disease, and septicemia.

The resolution also included claims that regular cannabis use “can irreversibly reduce intelligence, memory, and learning ability,” along with claims that underage cannabis use causes risks of academic performance, IQ, and behavior, and that cannabis in adolescence leads to risks of “psychosis, a severe mental disorder characterized by distorted thinking and loss of touch with reality, as well as depression and suicide.”

They conclude the bill text by stating that they urge voters to reject Issue 2 to “preserve and protect our state’s high quality of life, the health and safety of our citizens, the strength and prosperity of our communities, our strong economic growth, our favorable environment for business success, and opportunity for all citizens and the future for our young people…”

The campaign group submitted nearly 130,000 signatures to get Issue 2 onto the ballot, after first coming up short of the necessary 124,046. “It looks like we came up a little short in this first phase, but now we have 10 days to find just 679 voters to sign a supplemental petition—this is going to be easy, because a majority of Ohioans support our proposal to regulate and tax adult use marijuana,” said Coalition to Regulate Marijuana Like Alcohol (CRMA) spokesperson Tom Haren.

A recent poll from the CRMA, which is the same advocates group behind the initiative, found that three out of every five Ohioans plan to support the measure come November. A similar poll conducted in September 2020 showed that voters said they were “29% “strongly approving” and 34% “somewhat approving” (63% total) compared to this year’s results with “50% strongly approving” and “17% somewhat approving” (67% total).

Recent projections from Ohio State University show that the state could generate somewhere between $275 million to $403 million in recreational tax revenue by the fifth year of legalization.

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