Ohio to vote on Marijuana Legalization with Potential $260M Economic Boost
Ohio voters will once again have the chance to legalize adult-use marijuana eight years after a proposed constitutional amendment that would have made it legal was rejected.
On Tuesday, November 7, there will be a vote on two ballot issues. One, Issue 1, concerns the right to abortion and reproductive health care, aiming to include these rights in the state constitution. The other, Issue 2, is an initiated statute seeking to legalize adult-use marijuana for adults aged 21 and older.
If it passes, Ohio will become the 24th state to legalize adult-use marijuana, a step that proponents argue would boost social equity and the state's economy.
The proposed legislation would grant Ohio residents aged 21 and above the right to possess 2.5 ounces (70.8 grams) of marijuana and up to 15 grams of extract. Additionally, they would have the option to cultivate up to six plants individually or a maximum of 12 plants collectively.
A 10% tax would be imposed on marijuana products in addition to Ohio's standard sales tax. This revenue would be allocated for various purposes, with 36% designated for the marijuana social equity and jobs fund, another 36% for the host community marijuana facilities fund, 25% for substance abuse programs, and 3% for the Division of Cannabis Control and Tax Commission Fund.
The proposal includes a social equity program to provide financial support for individuals looking to enter the marijuana legal market, but it is subject to specific eligibility requirements. To qualify, applicants or their family members should have a prior legal issue related to marijuana and belong to a disadvantaged group, as defined by factors such as race, gender, disability, or economic status.
The bill also stipulates that using marijuana in "public areas" would result in a minor misdemeanor charge. However, it grants property owners and "any public place" the discretion to determine whether they allow or prohibit marijuana use.
Unlike some other states' adult-use marijuana programs that automatically expunge certain arrests or convictions, Ohio's proposal does not include this provision.
As Issue 2 is an initiated statute, lawmakers can modify or discard the voter-approved version. While a complete repeal is improbable, they might consider adjustments to revenue allocation or the introduction of additional requirements.
It's not the first time that Ohioans have tried to legalize adult-use marijuana in their state. They attempted to do so in 2015 through the controversial Issue 3, which aimed to legalize both medical and recreational marijuana, but voters rejected it.
Between the first and second ballot proposals, Ohio legalized medical marijuana in 2016, with the first dispensary opening in 2019. As of today, the Ohio Medical Marijuana Control Program has granted certificates of operation to 107 dispensaries, with 27 holding active provisional dispensary licenses.
Legalization advocates argue Ohio can boost its tax revenue and undercut illegal markets by implementing government regulation. However, critics express concerns about a rise in workplace incidents and traffic accidents involving individuals under the influence. They also argue that a significant portion of the revenue will benefit the marijuana industry rather than taxpayers.
The Ohio-based public policy analysis firm Scioto Analysis recently conducted a cost-benefit analysis on Ohio's Ballot Issue 2 regarding the legalization of adult-use marijuana.
The analysis suggests that marijuana legalization could bring about net societal benefits of around $260 million, with potential outcomes ranging from a net cost of $200 million to net benefits of $1.9 billion.
In approximately 90% of likely scenarios, legalization is expected to have a positive economic impact, mainly due to an estimated $190 million in tax revenue. This revenue would fund the Cannabis Social Equity and Jobs Fund and the Substance Abuse Addiction Fund, with a combined expected social value of over $800 million.
However, the analysis also notes a short-term productivity loss of about $760 million due to a 1% decrease in worker productivity following legalization.
The analysis makes it clear that tax revenue, on its own, is not a societal benefit; instead, it represents a transfer from taxpayers to the government for public services that may have positive side effects.
The majority of recent polls released in the past few months regarding Issue 2 indicate support for the legalization of adult-use marijuana.
