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In this Oct. 16, 2013 file photo, marijuana clone plants that are used to grow medical marijuana are displayed under a light at a medical marijuana cooperative.
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Bill would grab all tax revenue under voter-approved marijuana law

AP

Bill would grab all tax revenue under voter-approved marijuana law

COLUMBUS — Ohio Senate Republicans are preparing to pursue legislation that would raise the tax on newly legal recreational marijuana sales and divert all the revenue collected to the state's general fund budget.

Newly introduced Senate Bill 56 would undo all the tax revenue earmarks approved by voters in 2023 as part of Issue 2 that legalized recreational use, possession, home-growing, and controlled sales for those age 21 and older. The program is still being fully implemented, building out Ohio’s existing medical marijuana infrastructure to feed the new market.

Issue 2 called for distributing 36 percent of the revenue to a new social equity fund, 36 percent to communities hosting dispensaries, 25 percent for substance abuse and addiction programs, and 3 percent to the state for administrative costs.

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The tax rate would increase from the 10 percent currently being charged at the register, on top of existing state and local sales taxes, to 15 percent.

Marijuana supporters accuse lawmakers of trying to kill legal sales
JIM PROVANCE
Marijuana supporters accuse lawmakers of trying to kill legal sales

“The current 10 percent tax included in the initiated statute is among the lowest adult-use marijuana taxes in the country and does not cover the societal costs of the newly legalized drug,” said the bill’s sponsor, Sen. Steve Huffman (R., Tipp City), a physician who helped to write Ohio’s medical marijuana law.

Through Jan. 25, there had been nearly $293 million in nonmedical sales, according to Division of Cannabis Control. That should translate into about $29 million in taxes collected, not counting sales taxes, in the current fiscal year ending June 30.

The Senate last year passed a somewhat similar bill, but it went nowhere in the House of Representatives. New House Speaker Matt Huffman (R., Lima), Dr. Huffman’s cousin, was Senate president at the time, and he supports this approach.

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While lawmakers were at a stalemate, the state proceeded with writing the rules for production and sales under the terms of the law passed by voters. Recreational sales began in August.

The bill passed by the Senate last session would have specifically diverted some of the tax revenue to such things as local jail improvement, law enforcement, poison control, assistance in having old pot-related convictions expunged, and addiction services.

Those earmarks are gone in the new version with Dr. Huffman saying there were concerns about guaranteeing revenue for local governments.

“To guarantee them a revenue source going forward would certainly handcuff future General Assemblies,” he told the Senate General Government Committee.

Sen. Bill DiMora (D., Columbus), a committee member, pointed to the ways in which the bill differs from what voters approved.

“Are we telling [voters], ‘Screw you, you don’t know what you’re talking about with an overwhelming majority in the state, but we know better than they did?’” he said.

Unlike a constitutional amendment, which can only be changed by another voter-approved amendment, the end result of Issue 2 was an initiated statute subject to change or repeal by lawmakers like any other law.

David Bowling, executive director of the Ohio Cannabis Coalition, urged lawmakers to proceed cautiously but expressed a willingness to work with Dr. Huffman.

“We want to be sure this bill doesn’t put businesses across the state at risk and hamper what’s been called one of the most successful programs in the nation,” he said. “Introducing major changes at this stage could destabilize the market, creating uncertainty for businesses, workers, and consumers.”

The bill is on the fast track, with Senate President Rob McColley (R., Napoleon) hoping for a vote in his chamber next month. He said the language broadly diverting revenue into the general fund may be temporary and ultimately substituted with specific earmarks.

The measure would cut from 12 to six the number of total plants that a household could grow for adult personal use and sharing.

“I think people have to realize that 12 plants is a ridiculous amount of marijuana ..., more than what would reasonably be concluded to be personal use,” Mr. McColley said. “Our concern is that if we leave the home grow limit at 12 plants that we’re going to run into a black market situation where people are eventually selling that on the streets, it’s not been tested, it’s not gone through any sort of processing."

Among its many other provisions, the bill would:

● Decrease the total number of plants that may be grown in a household from 12 to six.

● Limit the smoking, combustion, and vaporization of marijuana to private residences.

● Expand existing protections for businesses to enforce zero tolerance policies in the workplace, allowing violating employees to be fired for cause, making them ineligible for unemployment compensation.

● Prohibit smoking marijuana in vehicles by both drivers and passengers.

● Eliminate the social equity and jobs program approved by voters that would have benefited communities seen as having been disproportionately affected in the past by anti-marijuana laws.

● Do nothing to address sales of intoxicating hemp products like delta-8 that fall between the cracks of state marijuana and hemp laws. Dr. Huffman said the Senate will pursue that in separate legislation.

● Consolidate both recreational and medical marijuana programs under the Division of Cannabis Control created by Issue 2.

● Prohibit products in forms that would be attractive to children as well as advertising that targets minors.

● Require marijuana and related paraphernalia transported in vehicles to be stored in its original unopened packaging in the trunk or another part of the vehicle not easily accessible by occupants.

● Reduce allowable THC content of cannabis extract.

● Cap the number of active retail dispensaries at 350.

● Prohibit a single owner from having more than eight dispensaries.

● Require the state to prevent oversaturation of the market and refrain from licensing a dispensary within half a mile of another.

First Published January 29, 2025, 5:04 p.m.

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In this Oct. 16, 2013 file photo, marijuana clone plants that are used to grow medical marijuana are displayed under a light at a medical marijuana cooperative.  (AP)
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