Ohio Marijuana Legalization Effort Faces Major Headwinds Despite Recent Momentum

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By Tony C. Dreibus

A proposal to legalize medical and recreational marijuana in Ohio seems to be a shoo-in for the fall ballot, with organizers raising more than $36 million and gathering nearly double the number of signatures needed to put the measure in front of voters.

But the effort might run face first into a brick wall.

Leading state lawmakers hastily put together a bill that would effectively kill the proposal, even if it passes muster with voters on Nov. 3, over concerns that it would create a monopoly for a select few cannabis cultivators.

As a result, thousands of business opportunities and hundreds of millions of dollars in potential sales may never materialize. Investors also would likely lose anything they put toward the campaign – and they might have to wait at least another year to realize any returns on land, buildings or equipment they pumped money into as well, as it could be November 2016 before other legalization proposals reach voters.

Just as importantly, the lawmakers’ bill may have a chilling effect on future investments into the state’s cannabis industry if the state eventually legalizes.

“Accusations of market manipulation or monopolies are not doing anything to attract investors,” said Patrick Rea, the CEO and managing director of CanopyBoulder, a group that specializes in helping cannabis startups get on their feet through mentorship and investment programs in exchange for partial ownership. “I want as much certainty as possible, and cannabis already has enough uncertainty. This (disruption) doesn’t move Ohio to the top of my list as to where I’d put my next business accelerator.”

The backlash is tied to a controversial piece of the legalization proposal that would allow just 10 cultivation sites, which would be controlled by major donors to the campaign. Although the proposal – spearheaded by a group called ResponsibleOhio – would allow more than 1,100 dispensaries and recreational shops, lawmakers are concerned that the limited number of cultivation licenses would create a monopoly.

To stop that from happening, lawmakers have introduced House Joint Resolution 4 (HJR4). The bill, which also would appear before voters in November, essentially prohibits constitutional amendments that create monopolies, according to Reps. Ryan Smith and Mike Curtin, sponsors of the resolution.

If the lawmakers’ bill makes it on the ballot and is passed, it would nullify ResponsibleOhio’s legalization measure even if it gets the support of voters. The bill would essentially “block any upcoming initiatives that create a monopoly from becoming effective in the Ohio Constitution,” according to a release by the representatives.

“This would protect Ohio’s century-old constitutional initiative process from those who would pervert it, who would stand it on its head, who would use it to protect the privileged few rather than to protect the many against the privileged few,” Rep. Curtin said in the release.

ResponsibleOhio thus far has raised more than $36 million to promote the amendment and boasts as backers some of the state’s most influential families and celebrities, including descendants of the powerful Taft family, entertainer and restaurateur Nick Lachey, and basketball star Oscar Robertson. The group said last week it gathered 550,000 signatures, more than enough to put its measure on the November ballot.

Not everybody is certain that the lawmakers’ bill would nullify ResponsibleOhio’s amendment if both are passed by voters. A constitutional lawyer in Cleveland who spoke on background said he believes that ultimately the matter would have to be settled in court.

Ian James, the executive director of ResponsibleOhio, said politicians are merely using constitutional protections as a guise to undercut the will of the voters. If Ohioans don’t want to legalize marijuana, they can simply vote no on his groups’ proposed amendment, he said.

That’s not likely, however, as a Quinnipiac Poll in April showed that a whopping 84% of Ohio voters said they approve of cannabis for medical use while 52% said they support recreational marijuana.

Groups including the Tafts and other in-state celebrities that invested in ResponsibleOhio’s campaign and business owners who are preparing for legalization in the state haven’t been put off by the political wrangling because they’re used to it, James said.

“Nobody’s concerned because they knew this was a possibility, that the statehouse would try its darnedest to stop this,” he said. “The voters are pretty clear in their position for legalization. If the statehouse prevails and puts the issue before voters, we’re confident voters will overwhelmingly support our amendment.”

Chris Lindsey – a legislative analyst for the Marijuana Policy Project, which is neutral on ResponsibleOhio’s measure – said the issue should be left to voters.

The lawmakers’ resolution, as written, is a purely political move, Lindsey said.

“I suspect this is more likely driven by an effort to ensure that even if a majority wants to change the failed policy of prohibition,” they can’t, he said.

Tony C. Dreibus can be reached at tonyd@mjbizmedia.com