Ohio Voters Pass Recreational Adult Use Cannabis: A New Era of Cannabis

Date November 9, 2023
Authors HBK CPAs & Consultants

In a significant move, Ohio has joined the growing list of 23 other U.S. states that have legalized recreational cannabis for adult use. On November 7, 2023, Ohio voters supported Issue 2. This historic decision marks a pivotal moment in the state’s evolving stance on cannabis and reflects a broader trend towards cannabis decriminalization and regulation across the country.

The Road to Legalization

The path to legalizing recreational cannabis in Ohio has been a long and often contentious journey. Ohio Voters in 2015 originally rejected a recreational marijuana ballot previously known as Issue 3. In 2016 the State of Ohio legalized medical marijuana through House Bill 523, offering relief to thousands of patients suffering from various medical conditions. This move opened the door to broader discussions about the potential benefits of cannabis, leading to increased public support for recreational legalization setting the stage for the 2023 ballot measure known as Issue 2.

Key Provisions of the New Law

The newly signed law, known as the Ohio Recreational Cannabis Act, outlines key provisions and regulations for the legal use of cannabis in the state. Here are some of the most important elements from Issue 2:

  1. Age Restriction: Adults aged 21 and older are allowed to purchase, possess, and use cannabis for recreational purposes. This age restriction is similar to the rules governing alcohol consumption.
  2. Possession Limits: Adults can legally possess up to 2.5 ounces of cannabis and up to 15 grams of cannabis concentrates for personal use.
  3. Retail Licensing: Similar to the medical marijuana control program, the law continues a system for licensing and regulating cannabis dispensaries, ensuring that the product is sold safely and responsibly. Under the new law, the Division of Cannabis Control is responsible for regulating, licensing, production, and compliance of cannabis operators and facilities. Licensing for distribution facilities is expected to be complete around Fall 2024. Currently, Ohio has 34 licensed cultivators and 107 medical cannabis dispensaries statewide.
  4. Home Cultivation: Ohio residents are permitted to cultivate a limited number (6 per individual, 12 total per household) of cannabis plants for personal use, provided they follow specific guidelines and restrictions.
  5. Taxation: A portion of the 10% excise tax and 5.75% sales tax revenue generated from cannabis sales will be allocated to public health and education initiatives, which is a common practice in states that have legalized recreational use. For Ohio, the cannabis social equity and jobs program will be designed to provide financial support and assistance for license applications to individuals who have been disproportionally impacted by past cannabis-related law enforcement.
  6. Workplace Regulations: The law includes provisions to address workplace concerns, emphasizing the importance of responsible consumption and maintaining a drug-free work environment.

Economic Impact

One of the most compelling arguments for legalizing recreational cannabis is its potential to boost the state’s economy. The new law projects to bring in $1.5 to $2 billion in the first year and approximately $3.5 to $4 billion within four years of the program’s inception. Legal cannabis markets have proven to be significant revenue generators for states that have taken this step. Ohio is expected to experience similar economic benefits, including increased tax revenue, job creation, and new business opportunities. With almost 12 million residents but only 180,000 active medical patients, Ohio’s medical cannabis industry is expected to reach approximately $575 million by the end of 2023.

Public Health and Education

The Ohio Recreational Cannabis Act places a strong emphasis on public health and education. A portion of the tax revenue from cannabis sales will be dedicated to these sectors. This investment can help fund programs that raise awareness about responsible cannabis use, provide support for addiction treatment, and enhance public health services.

Next Steps

According to the Ohio Constitution, the state legislature can modify or repeal initiative statutes right after they are passed. With 57% of voters favoring the law, it is unlikely that the General Assembly would completely repeal the legalization, but it has been vowed by some officials to edit the initiative after passage. Currently, the measure will go into effect 30 days after the election.

Ohio’s decision to legalize recreational cannabis reflects a broader shift in the United States toward the changing political landscape and opinions associated with cannabis. With a well-crafted and comprehensive regulatory framework, the state aims to strike a balance between individual freedom, economic growth, and public health and safety. As Ohio joins the ranks of states allowing recreational cannabis use, the path forward will be closely monitored, with an eye toward the potential benefits and challenges this new era may bring.

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