Considering the 12 million people in the Ohio market, and the surrounding states of Indiana, Kentucky, West Virginia, and Pennsylvania, it’s worth the wait.
I want to refer to Ohio as the Big Fuss. I’ve been sitting on that title for a minute, and I’m thrilled I found a placeholder. What is unfolding in that market right now, as a designated point of growth and trajectory for the general market, shouldn’t be understated. But first, let me start this next excerpt with my own personal guilt trip: I wrote this after so much preexisting commentary had already come out! I know! It’s mid-December as I sit in front of this blinking cursor and put down on paper what has already been written and disseminated widely about the Ohio cannabis market. However, I am still confused about the status of the market because it should be done but isn’t. So, I’ll weigh in.
From my vantage point, the Ohio wonks and the political wrangling that was supposed to occur were going to do nothing to expand people’s political imaginations about state politics and cannabis. Quite the opposite. If anything, Ohio would serve as a microcosm of yet another doled-out head fake in which political parties purporting to represent the will of the electorate sidestepped voters on this particular issue. I’m not a political animal only when it comes to cannabis. I always set aside the political hijinks because we need these markets for a host of reasons, both commercially short-term and politically long-term. Or do I have that backward?
Issue 2 Unpacked: Senate Approval and House Pending
Thursday, December 7, marked the parameters for Issue 2 when it passed the Senate. It has yet to pass the House. This marked the official indeterminate status of the Ohio cannabis market as a place of possession but not of purchase. Republican Gov. Mike DeWine wants breakers on this space ASAP, and though the Senate expeditiously passed a final-minute deal, the Ohio House adjourned before taking it up. Which, arguably, makes sense since the legislative papyrus tallies 160 pages of dense reading material and dictates all the complexities of a market, from taxes to regulations.
But let’s walk it back for a moment so we can move forward correctly. As a citizen-initiated statute, Issue 2 had to work its way through the GOP Legislature first. Since they decided to do nothing, it was then placed on the November 7 ballot, passing with a shade above 57% of the vote. Increasingly common terms apply: adults 21 and over can possess 2.5 ounces, grow up to six plants per person, etc. It also gave the state nine months, from August to September 2024, to create the framework to purchase within, as well as a 10% sales tax. In turn, sales revenue would be divided among several different kinds of programs, from social equity and job programs to addiction treatment and expungement.
Unexpected Twists by the Senate Republicans
The reflexive distrust of government by cannabis professionals, federal and state, always plants the seed that something is bound to go awry, which it did. Just a few days shy of the law taking effect, Senate Republicans proposed a strong rewrite, instantly pissing off backers and creating consternation in the House. No home-grow, possession cleaved in half to one ounce per person, and taxes increased to 15%. Tax revenue would not flow to any semblance of social equity programming that supports the local cannabis economy.
Surprisingly, a compromise was struck, approved by the Senate, and a real jumble of concessions was made, good/bad:
- Cutting the number of plants in a household to six
- Keeping the 15% sales tax in place
- Reducing permissible THC levels of extracts from 90% to 50%
- Adding a provision for expungement for certain levels of possession
And the list goes on.
While reading the bulletin from CBS, I recall an excerpt from Steven Steinglass, dean emeritus of the Cleveland State University College of Law and a leading expert on Ohio’s constitution. “Voters have only approved three initiates statues in 111 years, and none of the three had been amended, repealed or fiddled with by the General Assembly.” Cannabis is constantly breaking the mold.
In searching for more local, recent, and non-paywalled information, I read an article from the Columbus Dispatch, authored by Democrat Senator Bill DeMora about the recent trials and tribulations in more detail. Effectively, all the changes suggested by his Republic contemporaries would have hollowed out the industry. Whether that’s party-line talk or true is hard for me to say, but seldom are our public officials benign when cannabis is the topic.
The Public Response
Constituents from around Ohio sent a torrent of emails and calls opposing the suggested Republican changes. So, on the slate: programs to get appropriations, expungements potentially expedited, as well as the Democrat’s added provision that would allow legal sales from medical dispensaries (113 currently) to start selling in 90 days. Immediate dispensary sales, surprisingly, are looking more and more like a bipartisan issue.
Hopefully, by the time you read this, the House will have met further and progressed. They shouldn’t rush it, mind you. So if it takes a week, around Christmas or early January, just go about your business; it should get resolved. Considering the 12 million people in the Ohio market, and the surrounding states of Indiana, Kentucky, West Virginia, and Pennsylvania, it’s worth the wait.
In the meantime, happy holidays!
Are you up for an intellectual debate, need help, or have a question? Email me at mike@flowerhire.com. Happy to geek out further.
Mike Siebold is a strategic advisor and investor to several cannabis teams domestically. His exposure to the hiring demand and movement of people within the cannabis industry gives him a unique perspective on the prospects and viability of players across the entire ecosystem.