Issue 3: Will Ohio Voters Approve Creation Of A Legal Marijuana Industry?

Oct 15, 2015

Marijuana leaves
Credit Wikimedia Commons

Recent polls suggest that a majority of Ohioans back the legalization of marijuana.

But the question for Ohio voters on Nov. 3 is not whether they think marijuana should be legal. It is whether  they think Issue 3, a state constitutional amendment that would set up a large and profitable pot-producing industry owned by a handful of individuals, is the right way to do it.

Opponents say Issue 3 sets up a monopoly, because it spells out in the state constitution the individuals who would own and operate 10 “Marijuana Growth, Cultivate and Extraction” facilities around the state, including Hamilton, Butler and Clermont counties.

Backers of the measure say it is in no way a monopoly because the 10 marijuana growing facilities will compete with each other. If they don’t meet consumer demand, backers say, the state can add facilities.

“That’s not a monopoly; that’s a regulated industry,’’ said a mail piece by ResponsibleOhio, the organization that conceived the plan and orchestrated the petition drive to put it on the ballot.

So what would Issue 3 do? Who could manufacture it and sell it; and who could use it?

Use of marijuana:

Aside from the 10 bulk growing sites, anyone 21 years or older with a valid state license could use, possess, grow, cultivate and share up to eight ounces of homegrown marijuana, along with four flowering plants.

Anyone 21 or older could – with or without a license – purchase, possess, share or use up to one ounce of marijuana. And anyone with a certified debilitating medical condition could obtain medical marijuana.

How would marijuana be produced commercially?

There would, initially, be 10 marijuana growth and extraction facilities. They would have exclusive rights to production.

The facilities would be run independently to prevent collusion.

“These people will compete with each other – there will be no collusion; there will be no price-fixing,’’ said Ian James, executive director of ResponsibleOhio. “They can’t work together – there is such a thing as the Sherman Anti-Trust Act.”

The owners of the 10 initial facilities include some familiar names – singer Nick Lachey, Cincinnati basketball legend Oscar Robertson, former Bengal Frostee Rucker, former radio host Frank Wood, philanthropist Barbara Gould and two descendants of President William Howard Taft, Woody and Dudley Taft.

The investors are paying millions to run the pro-Issue 3 campaign.

Would there be any regulation of the marijuana industry?

Yes – the constitutional amendment sets up an Ohio Marijuana Control Commission to regulate both commercial and home-grown production, the chemical content of the marijuana grown, retail sales and taxation.

How would it be sold?

Retail marijuana stores would be allowed to sell only products from the 10 growing facilities and the product manufacturing facilities. They would not be selling just bags of marijuana, but could also sell processed edible products infused with marijuana, such as baked good and candies.

The total number of retail stores in Ohio could be over 1,100. They would not be allowed within 1,000 feet of a house of worship, a public library, a school, a day care center or a public playground. Every store location would have to be approved in a local option election, where the voters in that precinct can decide if that specific store can be located in their neighborhood.

Would the legalization of marijuana create jobs?

Proponents argue that between the growing facilities, processing plants and the retail stores, it would create over 10,000 new jobs.

How would the marijuana industry be taxed?

In addition to general business taxes, the marijuana production facilities would be hit with a 15 percent tax rate and the retail stores would be taxed at a flat five percent rate.

Here’s how the tax revenue would be split up: 55 percent to a fund for municipal and township governments, 30 percent to a fund for county governments and 15 percent to operate the Ohio Marijuana Control Commission.

The pro-Issue 3 forces say they have analysis that shows the production and sale of legal marijuana would produce $554 million a year in taxes – a number that opponents say is exaggerated and far more than other states that have legalized the marijuana have seen. Earlier this month, the Ohio Department of Taxation and the Ohio Office of Budget and Management gave Secretary of State Jon Husted a report estimating that tax revenue from legal marijuana would fall somewhere between $133 million and $293 million a year.

What is Issue 2, and how is it related to Issue 3?

Issue 2 is a constitutional amendment placed on the ballot by the Ohio General Assembly as a response to Issue 3. It would prohibit any petitioner from using the state constitution to grant a “monopoly, oligopoly or cartel for their exclusive financial benefit or to establish a preferential tax status." And it would specifically prohibit Issue 3 from taking effect if it passes on Nov. 3.

Husted has said that if both issues pass – and there is some polling evidence that might, indeed, happen – his opinion is Issue 2 would take precedence. The pro-Issue 3 people strongly disagree; and, if both pass, the issue of which constitutional amendment will take effect is likely to be decided in the courts.

Arguments in favor of Issue 3:

It would free up police to pursue more serious crimes than simple possession of marijuana.

Former Cincinnati Police Chief Thomas Streicher, now a law enforcement consultant, came out in favor of Issue 3 this summer, saying  in a written statement that the state spends over $120 million a year to enforce marijuana prohibition, even though we all know these laws do not work. Law enforcement should instead be able to spend their time and their resources tracking down the real criminals.”

Ohio Attorney General Mike DeWine, an opponent of Issue 3, strongly disagrees.

He recently spent three days in Colorado,  a state that legalized marijuana, where he talked to health care professionals, parents, educators and police officers.

“They say it will save police officers time,’’ DeWine told WVXU. “The officers I talked to just laughed at that. They said they could be out on a domestic situation, find some marijuana and go through a laborious process figuring out if the marijuana was more than the legal limit.”

ResponsibleOhio's James said it would end the illegal marijuana trade “that has no regulation, no control. Dealers can sell to anybody. Even children. And they do. It would be helpful if the other side had a plan to stop this, but they don’t.”

Issue 3 would make medical marijuana available to those who need it.

Proponents say the amendment would authorize non-profit dispensaries for medicinal marijuana, which physicians could authorize to treat cancer, Parkinson’s Disease, Alzheimer’s, sickle cell anemia, and children with epilepsy.

Nick Lashutka, president of the Ohio Children’s Hospitals Association, said that when it comes to medical marijuana for children, “there may be some conditions where it might help, but there is absolutely no medical evidence now that it would help treat things like seizures.”

This would not be a monopoly – it would be a highly regulated business.

“You can’t have a monopoly if the control commission could come in and decide to open the market up to other growers, based on demand,” James said. And, he said, it gives individuals 21 and over the ability to obtain a license to grow their own, with up to four flowering plants and eight ounces of usable marijuana.

Under the amendment, the grow area must be securely closed, locked and inaccessible to anyone under 21.

Arguments against Issue 3:

Marijuana manufacturers – making candy and other treats laced with marijuana -could market their product to children.

The constitutional amendment would allow the companies processing marijuana to make all sorts of edibles containing marijuana – cookies, brownies, candies, lollipops and gummy bears, opponents say.

“The evidence we have seen is that these edible versions of marijuana could appeal directly to children,’’ Lashutka said. “They are likely to not be well-marked. It’s a danger to kids who come across them at home and ingest them. Children would be put at risk. Particularly small children.”

James said the marijuana would be sold in a multitude of ways – as epidermal patches, topical creams, or edibles of various kinds.

“It will be produced in every way you can ingest marijuana,’’ James said. “But the control commission can set rules about the marketing of these products and about how they are packaged. They can be packaged in such a way as to not be attractive to kids.”

Issue 3 will flood Ohio with marijuana.

Supporters say that Issue 3 allows small amounts of marijuana for recreational use. Opponents say that, in fact, every adult 21 or over would have the right to possess as much as nine ounces of marijuana, enough to make about 500 joints. And allowing 1,159 retail stores makes it one of the largest retail businesses in the state, with more stores than Starbucks or McDonald’s and nearly three times the number of state liquor stores.

Proponents say that every person granted a retail license will have to go to the voters in that precinct and get a “yes” vote in order to open a store.

Legalizing marijuana would have a negative impact on employers’ ability to hire and fire.

Jason Kershner, vice president of government affairs at the Cincinnati USA Regional Chamber, said legalizing marijuana would have a “significant impact on businesses. It would jeopardize the employers’ ability to protect their workers.”

“Let’s say an employee comes into work obviously high on marijuana,’’ said Kershner, whose organization is on record opposing Issue 3. “If the employer decides to let that person go, would that person come back and sue the employer?”

“The potential litigation costs will hinder the ability of businesses to hire,’’ Kershner said. “Issue 3 jeopardizes an employer’s choice to maintain a safe, drug-free workplace.”

Proponents of Issue 3 say that employers would still be free to test their employees for the use of marijuana.

Kershner said the Regional Chamber would be willing to look at idea of legalized marijuana, particularly for medicinal purposes, but can’t support Issue 3, saying it “goes too far.”  

Who supports Issue 3?

American Civil Liberties Union of Ohio

The Ohio Rights Group (an organization that favors legalization of medical marijuana)

Former Ohio State Senate Minority Leader Eric Kearney

Cincinnati city council members Chris Seelbach and P.G. Sittenfeld

Cincinnati Health Department Medical Director Dr. O’dell Owens

The National Organization for the Reform of Marijuana Laws (NORML)

United Food and Commercial Workers Union Locals 75, 880, and 1059.

Former Cincinnati Police Chief Thomas Streicher

Cincinnati civil rights attorney Scott Greenwood, general counsel for the ACLU

Who’s against Issue 3?

The opposition campaign committee has over 70 organizations around the state that have come out against the constitutional amendment. They include:

-         The Ohio Children’s Hospital Association

-         The Ohio Chamber of Commerce,

-         The Ohio Hospital Association

-         The Fraternal Order of Police of Ohio

-         The Buckeye State Sheriffs’ Association

-         County Commissioners Association of Ohio

-         Ohio Chapter, American Academy of Pediatrics

-         The Ohio School Boards Association

-         League of Women Voters of Ohio

-         Ohio Council of Retail Merchants

-         The Ohio Manufacturers Association

-         The Ohio Business Roundtable

The ballot language of Issue 3:

Grants a monopoly for the commercial production and sale of marijuana for recreational and medicinal purposes

Proposed Constitutional Amendment

Proposed by Initiative Petition

To add Section 12 of Article XV of the Constitution of the State of Ohio.

A majority yes vote is necessary for the amendment to pass.

The proposed amendment would:

Endow exclusive rights for commercial marijuana growth, cultivation, and extraction to self-designated landowners who own ten predetermined parcels of land in Butler, Clermont, Franklin, Hamilton, Licking, Lorain, Lucas, Delaware, Stark, and Summit Counties. One additional growth facility may be allowed for in four years only if existing facilities cannot meet consumer demand.

Permit retail sale of recreational marijuana at approximately 1,100 locations statewide. Such retail establishments must have a state license that may be obtained only if the electors of the precinct where the store will be located approve the use of the location for such purpose at a local option election.

Legalize the production of marijuana-infused products, including edible products, concentrates, sprays, ointments and tinctures by marijuana product manufacturing facilities.

Allow each person, 21 years of age or older, to grow, cultivate, use, possess, and share up to eight ounces of usable homegrown marijuana plus four flowering marijuana plants if the person holds a valid state license. Allow each person, 21 years of age or older, to purchase, possess, transport, use, and share up to 1 ounce of marijuana for recreational use. Authorize the use of medical marijuana by any person, regardless of age, who has a certification for a debilitating medical condition.

Prohibit marijuana establishments within 1,000 feet of a house of worship, public library, public or chartered elementary or secondary school, state-licensed day-care center, or public playground, however: after a certain date, a new day-care, library, etc., cannot force a preexisting marijuana establishment to relocate by opening a new location within 1,000 feet of the business.

Prohibit any local or state law, including zoning laws, from being applied to prohibit the development or operation of marijuana growth, cultivation, and extraction facilities, retail marijuana stores, and medical marijuana dispensaries unless the area is zoned exclusively residential as of January 1, 2015 or as of the date that an application for a license is first filed for a marijuana establishment.

Create a special tax rate limited to 15% on gross revenue of each marijuana growth, cultivation, and extraction facility and marijuana product manufacturing facility and a special tax rate limited to 5% on gross revenue of each retail marijuana store. Revenues from the tax go to a municipal and township government fund, a strong county fund, and the marijuana control commission fund.

Create a marijuana incubator in Cuyahoga County to promote growth and development of the marijuana industry and locate marijuana testing facilities near colleges and universities in Athens, Cuyahoga, Lorain, Mahoning, Scioto and Wood Counties, at a minimum.

Limit the ability of the legislature and local governments from regulating the manufacture, sales, distribution and use of marijuana and marijuana products. Create a new state government agency called the marijuana control commission (with limited authority) to regulate the industry, comprised of seven Ohio residents appointed by the Governor, including a physician, a law enforcement officer, an administrative law attorney, a patient advocate, a resident experienced in owning, developing, managing and operating businesses, a resident with experience in the legal marijuana industry, and a member of the public.

SHALL THE AMENDMENT BE APPROVED?

YES

NO

The ballot language of Issue 2:

Anti-monopoly amendment; protects the initiative process from being used for personal economic benefit

Proposed Constitutional Amendment

Proposed by Joint Resolution of the General Assembly

Proposing to amend Section 1e of Article II of the Constitution of the State of Ohio.

A majority yes vote is necessary for the amendment to pass.

The proposed amendment would:

Prohibit any petitioner from using the Ohio Constitution to grant a monopoly, oligopoly, or cartel for their exclusive financial benefit or to establish a preferential tax status.

Prohibit any petitioner from using the Ohio Constitution to grant a commercial interest, right, or license that is not available to similarly situated persons or nonpublic entities.

Require the bipartisan Ohio Ballot Board to determine if a proposed constitutional amendment violates the prohibitions above, and if it does, present two separate ballot questions to voters. Both ballot questions must receive a majority yes vote before the proposed amendment could take effect.

Prohibit from taking effect any proposed constitutional amendment appearing on the November 3, 2015 General Election ballot that creates a monopoly, oligopoly, or cartel for the sale, distribution, or other use of any federal Schedule I controlled substance.

The Ohio Supreme Court has original, exclusive jurisdiction in any action related to the proposal.

If passed, the amendment will become effective immediately.

SHALL THE AMENDMENT BE APPROVED?

YES

NO