Week in Review: Controversial MJ Plan in Ohio, New CO Rec Lawsuit + Questions Over Florida CBD Regs

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

By John Schroyer

A proposed legalization measure in Ohio stirs up controversy among entrepreneurs and advocates, a fourth lawsuit targets Colorado’s recreational marijuana industry, and Florida’s CBD program suffers another setback.

Here’s a closer look at several notable developments in the cannabis industry over the past week.

Monopoly in Ohio?

A well-funded move to legalize both medical and recreational marijuana in Ohio with a single ballot measure has rankled some business-minded residents and longtime cannabis activists.

Their ire is directed at the unique regulatory structure the initiative would establish – particularly when it comes to who would control growing operations.

The organization ResponsibleOhio is pushing a measure for the November ballot that would essentially give big-money investors funding the campaign primary ownership of the 10 cannabis cultivation facilities permitted under the proposal.

That has two competing legalization groups up in arms.

“If you’re going to legalize it, legalize it. Don’t monopolize it,” said Tonya Davis, a co-founder of Responsible Ohioans for Cannabis, which is working to get its own measure on the 2015 ballot.

A third organization pushing a 2016 measure, Ohioans to End Prohibition, called the proposal a “slap in the face” to residents who want a “common sense, comprehensive marijuana policy.”

So far, ResponsibleOhio has raised a whopping $36 million, much of it from wealthy donors who could essentially own the cultivation side of the industry if the bill passes.

Lydia Bolander, spokeswoman for ResponsibleOhio, shrugged off the criticisms and said her group’s measure was carefully written with the aims of undercutting the black market and ensuring that legal marijuana is as safe as possible.

Bolander added that the proposal also would allow the state to authorize additional cultivation licenses if 10 sites can’t meet demand for both MMJ and rec.

That could be a realistic scenario if the measure is approved by voters, because the initiative allows for one rec store for every 10,000 residents, which works out to more than 1,100 rec shops statewide. And the initiative has no cap on the number of MMJ dispensaries that would be permitted.

That provides for plenty of business opportunities for Ohioans who want to get involved in the cannabis industry, Bolander said.

Lawsuits Mounting

There’s now a quartet of lawsuits targeting Colorado’s recreational marijuana law, raising the specter of a possible court ruling in 2015 that could have national implications – positive or negative – for the industry at large.

The latest, filed on Thursday by a coalition of 12 sheriffs and prosecutors from three states, joins two lawsuits filed last month by Washington DC-based Safe Streets Alliance and another from December, when the attorneys general in Oklahoma and Nebraska asked the U.S. Supreme Court to overturn the law.

The cases all have a common thread: They base their legal arguments against Colorado’s rec law on the Supremacy Clause of the U.S. Constitution, which essentially says that federal law trumps state law.

But does it?

University of Denver law professor Sam Kamin and three other colleagues don’t think it does, at least when it comes to marijuana.

The group penned an article in the UCLA Law Review on the topic, pointing out that the Supremacy Clause isn’t always an overriding legal standard when it comes to states’ rights. That’s because there’s a counterweight included in the Constitution: the Tenth Amendment’s anticommandeering doctrine.

“States’ decisions to eliminate state marijuana prohibitions are simply beyond the power of the federal government,” the article reads. “The federal government cannot command any state government to criminalize marijuana conduct…If states wish to repeal existing marijuana laws or partially repeal those laws, they may do so without running afoul of federal pre-emption.”

Of course, that’s only one opinion, and the question will ultimately be up to the courts to decide. But it’s not as though the cannabis industry doesn’t have any ammunition when it comes to legal arguments.

Will Florida Dispensaries Ever Open?

With Florida’s Health Department running into obstacle after obstacle in its repeated attempts to write regulations for the state’s upcoming CBD program, entrepreneurs have been left in limbo, likely wondering when (or if) they’ll ever get a chance to apply for business licenses.

The latest turn of the screw: This week, a state legislative committee lawyer raise a series of objections.

Attorney Marjorie Holladay raised a host of questions regarding the department’s second try at writing regulations for just five businesses that will ultimately be allowed to grow, process, manufacture and distribute the non-psychoactive medical marijuana for a small patient base. And the questions lend themselves to even more questions, especially since dispensaries were initially slated to open in January.

So now the health department is months behind schedule (which is generally par for the course in most states that implement either CBD or MMJ programs), with no real end in sight. If the agency needs to return to the drawing board, it could conceivably be months more down the road before business licenses are handed out.

At the same time, many companies that were ramping up last year in the hopes that the state would pass a much broader MMJ law at the ballot box probably won’t be going anywhere, since there’s both a bill in the state legislature to expand MMJ, as well as a ballot measure for next year that’s already been filed.

John Schroyer can be reached at johns@mjbizmedia.com