Commentary
A technician inspects the leaves of cannabis plants growing inside a controlled environment. Photographer: Konstantinos Tsakalidis/Bloomberg via Getty Images.
Ohio Republicans seem to think that they are still negotiating over legal cannabis.
Ohioans voted overwhelmingly last month in favor of the initiated statute that legalized recreational cannabis, Issue 2. Now the state’s GOP, having failed to turn out its own base to vote down the statute, is trying to get its story straight on legal weed.
Their latest gambit seems to center on misdirection. Initially, Ohio Senate Republicans aggressively pushed back against the will of the voters, trail-ballooning legislative changes to the policy that would have eliminated the right for Ohioans to grow their own cannabis, a key provision of Issue 2, and re-criminalized possession of cannabis that wasn’t obtained from licensed retailers, which could not open for at least one year.
Then, in a seemingly dramatic reversal, they back-tracked on that posture. Maybe they began to listen to their constituents. For whatever reason, they added an expungement provision that has been long favored by advocates, crafted new language that would permit medical cannabis dispensaries to sell recreational cannabis as soon as 90 days after passage, and kept the home-grow provision intact. On Thursday, that bill sailed through the GOP-controlled Ohio Senate, which now goes to the GOP-controlled House. I expect the House will pass it and that it will be signed into law by Gov. Mike DeWine.
It’s tempting to view these provisions as a positive — as an acceleration of recreational cannabis legalization, which voters overwhelmingly favored. Hardly anybody in the activist community thought expungement was realistic at this point because Ohio’s initiated statutes are limited in scope, and allowing existing medical dispensaries to sell cannabis to recreational consumers wasn’t in Issue 2’s scope, either.
Allowing existing medical dispensaries to sell recreational cannabis is a genuinely good policy that would prevent cannabis businesses and consumers from operating in regulatory no-man’s land for another year. Generally, when recreational legalization occurs at the state level, recreational dispensaries need to be permitted to open where there is demand for them. Otherwise, the black market will prevail in the absence of a fully functional legal marketplace.
So, accelerated adult-use sales and expungement seem like great wins. But beyond that, the positives are largely an illusion.
The expungement provision is confusing and may not be very effective. All the Senate-passed bill says is that the Ohio attorney general shall create a process to reimburse people for costs associated with proactively petitioning the court for expungement of prior convictions involving cannabis possession. Expungement does not seem to be automatic, and if this is the language that passes into law, then there will be many people in Ohio who believe they’ve been cleared when they really haven’t been.
We will gladly raise our hands and help the Ohio Senate write an expungement policy that really expunges the records of the state’s victims of a century of cannabis prohibition, which has always been racist, unfair, and ineffective.
And re-including the home-grow provision is pure legislative gaslighting. The Ohio GOP opposed Issue 2 at every turn, and now that it passed, they want to threaten to take away one of its most popular provisions and receive praise by turning around and giving it back. That won’t fly with advocates and it won’t fly with voters.
But the most tone-deaf, cynical part of the Senate bill on legal cannabis is that it raids state funds from legal cannabis to pay for more jails and more cops, and I take no pleasure in saying that we predicted Ohio Republicans would do exactly that.
Under the Senate bill, the cannabis excise tax would be set at 15%, up from 10% under the initiated statute. This on its own is not alarming. According to exclusive polling we conducted of Ohio’s cannabis consumers, we found that just 10% of them would revert to the black market if the new taxes on legal cannabis product made it more expensive. In other words, consumers themselves are overwhelmingly saying that they are eager to shop in a legal, regulated market, even though it will cost a little bit more. While there certainly is a limit to the costs consumers will bear, whether the excise tax is 10% or 15% seems immaterial.
Our poll has a confidence level of 85% with a 5% margin of error.
Beyond the finding on price elasticity, our poll also found approximately 1 in 4 current medical cannabis users in Ohio say they plan to purchase their cannabis in the recreational market. That would amount to almost 50,000 customers eventually moving from the regulated medical market to the regulated adult-use recreational market, activity that will drive more cannabis tax revenue because only recreational cannabis has the excise tax attached to it.
So, the tax scheme will work to produce revenue — up to $403M per year once the legal recreational market is fully developed, according to an estimate from Ohio State University.
What’s alarming is that Ohio Republicans are trying to gut the social equity provision of Issue 2 by changing what the tax revenue funds. Under the Senate bill, just $15 million of the applicable tax revenue would fund expungements, whereas 28% would be allocated for jail construction and renovation. The math on that works out to an additional $112 million annually being used to renovate or improve the cages used to incarcerate Ohioans. Something tells me that the funds won’t be used for health care or quality-of-life improvements for those who are doing their time.
Thirty-five percent of the cannabis excise taxes would go to law enforcement under the Senate bill, with substance misuse treatment and suicide hotline services each receiving 9%. Social equity, which is set to receive one-quarter of all excise tax revenue under Issue 2, would receive zero.
It is hard to overstate just how nonsensical this is. Issue 2 made legal the previously illegal activity of consuming cannabis for one’s own enjoyment. On net, there will be less crime in the statutory, by-the-book sense of it. And Ohio Republicans aren’t even bothering to argue that law enforcement is inadequately funded. The most charitable interpretation of the bill is that it’s a giveaway to cops and to county jail administrators.
Ohio Republicans want nothing to do with the social equity measures included in Issue 2. And, even worse, they’re using a deceptive sleight-of-hand to get rid of it. If they must proceed with this destructive, unhinged policy, they should do it out in the open.
Deb Tharp is head of legal and policy research at NuggMD, the largest telehealth company for cannabis, which operates in 26 states, including Ohio.