Ohioans to Face Legalization Dilemma in November


On Nov. 3, 2015, Ohioans will have the opportunity to vote on the Ohio Marijuana Legalization Initiative, which would legalize marijuana for medical and recreational purposes. On Aug. 12, Secretary of State Jon Husted announced that the private investor group, ResponsibleOhio, had collected 320,267 signatures of registered voters, 14,676 more than necessary to qualify for the general election ballot.

But for many, the opportunity is poisoned by the way that licenses would be awarded. The initiated constitutional amendment grants 10 Marijuana Growth, Cultivation and Extraction licenses exclusively to donors of $2 million or more to ResponsibleOhio. If approved, there will be no application process, as in other states that have legalized marijuana. Those valuable commercial rights would become a matter of state constitutional law.

Venerable advocacy organizations like the Marijuana Policy Project are keeping a distance.


Familiar Provisions

The initiative would legalize the medical and personal use of marijuana for those 21 or older. Medical use would require a doctor’s note. Recreational users would be permitted to possess one ounce or less. The initiative would also permit home growing of up to four flowering plants at a given time with a cultivation license.

The proposal establishes the Ohio Marijuana Control Commission to regulate medical and retail sales and use. Retail sales will not be allowed within 1,000 feet of certain public buildings such as churches and schools.

All marijuana production facilities would pay a special flat tax of 15 percent, and retail stores would pay an additional 5 percent flat tax. Fifty-five percent of tax revenue would be distributed to the Municipal and Township Government Stabilization Fund, 30 percent to the Strong County Fund and another 15 percent to the Marijuana Control Commission Fund.

The fact that the initiative would amend the Ohio Constitution, rather than amending state statutes, may make the kind of learning-curve adjustments that were seen in Washington more difficult, but the situation is not unique. Colorado legalized via constitutional amendment, as well.

Even the sharp restriction on the number of licenses will be familiar to those who have watched New York’s or Maryland’s foray into medical marijuana legalization. The argument for strict limits may have been made most forcefully in a report by the Rand Corporation, which used the term “structured oligopoly,” linking the scarcity of licenses to the likelihood of lawful behavior.

But the exclusive award of licenses to campaign donors has stunned many.


Cultivation And Extraction Licenses

The language of the initiative assigns Marijuana Growth, Cultivation and Extraction licenses to 10 properties identified by tax parcel number. Cultivation of medical and retail marijuana and production of marijuana-infused products would be permitted only at the 10 MGCE facilities. Those properties are owned by corporate entities in which only donors of at least $2 million to ResponsibleOhio were permitted to invest.

Investors are said to include Former Cincinnati Bengals defensive end Frostee Rucker, philanthropist Barbara Gould, University of Cincinnati basketball star Oscar Robertson, Dayton pain specialist Suresh Gupta, WEBN radio host Frank Wood, and a descendant of President William Howard Taft, Woody Taft.


State Legislators Respond

The licensing process has so concerned Ohio lawmakers that the legislature has approved an anti-monopoly constitutional amendment that will also appear on the Nov. 3 ballot. If voters approve both measures, the anti-monopoly initiative will invalidate the marijuana legalization initiative. Litigation seems likely.

Still, a stand against the pay-to-play licensing feature of the Ohio Marijuana Legalization Initiative hands a victory to prohibitionists.

Anne Wallace is a New York lawyer who writes extensively on legal and business issues. She also teaches law and business writing at the college and professional level. Anne graduated from Fordham Law School and Wellesley College.

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