Employers and potential pot entrepreneurs are waiting to see if 2016 will be the year cannabusiness comes to the Buckeye State.
With two proposals heading to a November vote and the state legislature proposing legislation to allow medical use of marijuana, Ohio is moving closer to legalizing pot. Employers and potential pot entrepreneurs are waiting to see if 2016 will be the year cannabusiness comes to the Buckeye State.
Ohio use of medical marijuana is no longer just a growing idea, but an increasingly likely reality. And that has the attention of those on the lookout for new business opportunities.
Ohio is poised to join almost half of the country that has already legalized medical marijuana and cannabis programs, or 23 states, the District of Columbia and Guam, to be exact.
It's not just an everyone-else-is-doing-it mentality that allows potential for medical marijuana legalization even though Ohioans voted down Issue 3 last November. The well-financed campaign to legalize recreational and medicinal marijuana was defeated 2-to-1. However, Quinnipiac University polls from 2015 showed that while voters opposed the privatized production and sale provisions built into the proposed constitutional amendment, the majority of Ohioans favor some form of legalization.
The lasting favoritism led to Issue 3 and brought to the surface Ohio's ongoing debate over medical marijuana legalization. That's why, two months after Issue 3's defeat, Ohio House Speaker Cliff Rosenberger announced the formation of a Medical Marijuana Task Force that recently proposed legislation, House Bill 523, to open Ohio to medical marijuana use.
"The goal of this task force is to have a methodical and holistic approach to the conversation," Rosenberger said when he announced the task force in January. Issue 3 organizers and opponents joined Ohio business leaders, law enforcement representatives and medical professionals on the state task force.
"We are pleased that the House has done this," says Eric Burkland, president of the Ohio Manufacturers Association. OMA Chairman Bill Sopko represented the organization on the task force.
"Our primary concern is that the state constitution is not the place to enact statutory programs," says Burkland. The OMA also advocated for manufacturing employers' ability to enforce drug-free workplace policies.
That was also a concern for the Ohio Chamber of Commerce, whose past board chair Linda Hondros sat on the state task force.
"We have to look at protecting the workplace. That means (ensuring that) employers can still regulate safety in the workplace," Andrew Doehrel, president and CEO of the chamber. The chamber board opposed Issue 3, arguing that full legalization would cause "great uncertainty" among employers who drug-test-threatening employee productivity, endangering workers and raising liability issues.
"It's not an easy topic. You have to even define what you're talking about when you say 'medical,'" says Doehrel. The Chamber has formed its own internal task force to look at the issue. Doehrel notes many of its members shared stories of family members and acquaintances who have benefitted from medical marijuana use.
The chamber board has also discussed the economic benefits of legalizing industrial hemp production in the state. Right now, says Doehrel, Ohio "imports millions of dollars' worth of hemp because you can't grow it."
After several months of hearings, Rosenberger's task force in mid-April announced plans to present a bill to the House for approval, with hopes of moving it quickly to Gov. John Kasich. The bill would legalize medical marijuana in patches, edibles, oils and plant materials as prescribed by a physician, reports the Columbus Dispatch. A nine-member Marijuana Control Commission would oversee the industry. The bill would also include safe harbor for financial institutions servicing marijuana-related businesses, shielding them from federal law, reports the Dispatch.
The fine points of the bill will develop as it goes through hearings. Those hearings will define how strict or lenient the bill is in regard to forms of marijuana used, conditions for which it may be prescribed and the specifics of licensing growers, dispensaries and product manufacturers.
The House bill would protect employers' ability to enforce drug-free workplace policies, even for employees with marijuana prescriptions.
Concurrent with the legislative push, two constitutional amendment proposals are making their way to the November ballot. A Medicinal Cannabis and Industrial Hemp Amendment proposed by Grassroots Ohio would allow for medicinal marijuana use and industrial hemp production. It has been certified by the Ohio Ballot Board, allowing backers to collect signatures to place it on the ballot.
The ballot issue experts say has a fighting chance of passing with voters in 2016 is the one backed by a national advocacy organization. The Medical Use of Marijuana Amendment is also collecting signatures through June for a constitutional amendment. Grandview-based Ohioans for Medical Marijuana is leading the campaign with support from the Washington DC-based Marijuana Policy Project.
"Our goal is to ensure that seriously ill Ohioans are able to access medical marijuana if their doctors recommend it," says Mason Tvert, MPP's communications director. Tvert says the initiative would allow people suffering from debilitating medical conditions like cancer, HIV/AIDS, Parkinson's or multiple sclerosis to access small amounts of marijuana by growing it or buying it from a dispensary.
In shaping the amendment, the campaign listened to the concerns of Ohio employers regarding workplace safety and liability, says Brandon Lynaugh, campaign manager of Ohioans for Medical Marijuana. "We recognize the importance of Ohio's business community, and our amendment contains specific language designed to ensure it does not interfere with existing programs or the employer/employee relationship."
Medical marijuana would be treated similarly to prescription painkillers or other medications that might cause safety concerns, says Lynaugh. "In other words, employees would not be allowed to be impaired by marijuana while on the job."
The ballot issue, like the House bill, would establish a framework for a new industry to grow in Ohio.
"Our campaign is very much focused on providing seriously ill people with legal and safe marijuana, rather than economic impact," says Lynaugh. "With that said, the initiative creates a framework for a system of regulated cultivators, testing facilities and stores that will meet the needs of those patients."
The amendment proposes an unlimited number of marijuana producers. A Medical Marijuana Control Division, with five members appointed by the state commerce director, would regulate and provide business licenses for cultivation, manufacturing, distribution, testing and retail or medical marijuana. Only 15 large "Tier 1" growing licenses would be issued initially, though there would be an unlimited number of smaller "Tier 2" cultivation facilities. Sales tax rates would apply to the sale of medical marijuana. Patients and their caregivers would pay up to $40 a year for patient ID cards.
Marijuana producers would bear financial penalties and limitations because of marijuana's federal classification as a Schedule 1 substance. Due to its illegal status "some state-legal medical marijuana businesses still experience trouble finding banking and other financial services," Lynaugh says.
"These businesses will undoubtedly create jobs and generate some revenue from standard sales taxes, and they'll utilize the services and products of a variety of other local businesses. But that will all be a bonus," says Lynaugh.
And some economic bonus medical legalization would be for Ohio, says Chris Walsh, founding editor of Marijuana Business Daily. The trade journal covers cannabis industry financial and legal news, hosts an annual Marijuana Business Conference and Expo and publishes an annual Marijuana Business Factbook.
Ohio would be a "gigantic market" says Walsh. "A lot of people are eyeing the market. It's a little early to put down too much money or effort into it," he says. Walsh notes that some Ohio companies are serving the industry in other states, like Apex Supercritical, a Johnstown-based manufacturer of the botanical oil-extraction machines used to make products from cannabis.
For companies that "touch the plant," startup costs are generally pretty high, says Walsh. Operating costs vary greatly between legal states and often by city, depending on the strictness of any given area's medical marijuana regulations. Still, legalization would generate plenty of business development in Ohio.
"You see a lot of people who can find ways to transition their current business into this space. You shouldn't think of this (just) as growing and processing and selling marijuana right now if you're a business owner," says Walsh. "All of these companies need all the products and services other companies need."
Kitty McConnell is a freelance writer.