In November, the Ohio electorate took the bold step of bypassing the legislature, voting through Issue 2 and making Ohio the 24th state in the US to allow adult-use cannabis sales. Issue 2 sets a moderate taxation rate on adult-use cannabis, while also remaining heavily focused on social equity.
The passing of a citizen-initiated statute is quite rare in Ohio, having happened only 13 times since 1912. Despite this success, a group of conservative, business-minded individuals are now working to adjust the provisions of Issue 2, aiming to reduce social equity provisions and emphasize fiscal responsibility and law enforcement instead.
Issue 2, as it currently stands, has a focus on social equity and financial fairness. A Cannabis Social Equity and Jobs Program is proposed, aiming to provide financial assistance and license application aid for individuals who have been significantly impacted by the enforcement of marijuana-related laws. This not only makes a statement regarding past enforcement but aims to reduce future barriers for affected individuals.
At the same time, Issue 2 seeks to create a competitive business marketplace by setting low tax rates for cannabis businesses. Business ventures dealing with adult-use cannabis will be taxed at 10% state excise tax plus the existing 5.75% sales tax. Such an arrangement is expected to blunt the rise of an illicit market and encourage a legal and socially beneficial one instead. It is estimated that such a tax arrangement could bring in an annual revenue of $276 million to $403 million by the fifth year of the legalization, as calculated by Ohio State University.
However, opposition to Issue 2 and its social equity leanings has resulted in changes being advocated through House Bill 86. The new changes initially proposed removing home growth of cannabis, increasing excise tax to 15%, and diverting most of the taxes to law enforcement functions. However, due to substantial public backlash, some of these restrictions have been removed and currently HB 86 leans towards business acumen and crime control rather than social equity.
The pendulum of adult-use cannabis policy in Ohio is currently in motion, making it too early to predict an outcome. Despite the current opposition, two other cannabis bills similar to Issue 2 have been proposed: HB 341 and HB 354. As the legislative battle continues, Ohio’s future cannabis policy remains a field of active development that will no doubt have a resounding effect on the industry and impacted individuals.