Ohio Voters Legalize Adult-Use Cannabis in Redemption Election

Editor's note: Updated 9:30 a.m., Nov. 8. View Cannabis Business Times' live coverage of Ohio's election here. 

Following in the footsteps of 23 states that had come before them, Ohioans decided Nov. 7 that reforming their laws to legalize, regulate and tax adult-use cannabis was in their best interests.

Voters in the Buckeye State approved Issue 2 during Tuesday’s election by a 56.97% to 43.03% margin with 100% of precincts reported as of 8:47 a.m. ET Nov. 8, according to unofficial election results from the Ohio Secretary of State’s office. This represents the third largest margin of victory for a citizen-initiated adult-use legalization ballot measure, behind Arizona (60%) and California (57.1%). 

The statutory measure aims to enact a chapter in the Ohio Revised Code to allow adults 21 years and older to purchase and possess up to 2.5 ounces of flower (or 15 grams of extract) and to home cultivate up to six plants per person or a maximum of 12 plants per household. In addition, the measure includes provisions for a commercialized cultivation and retail marketplace.

Ohio’s lawmakers will have the final say over specific codified language—they may repeal certain provisions in the initiated text, such as the allowance of home grows. But the voter-approved measure sets a 30-day timeline for the new law to take effect following the election.

This reform victory for Issue 2’s sponsor, the Coalition to Regulate Marijuana Like Alcohol (CRMLA), comes eight years after Ohio voters rejected a previous adult-use cannabis ballot measure by a 63.7% majority in the 2015 election. The triumph also comes after CRMLA activists tried to land Issue 2 on Ohio’s 2022 ballot, but a signature-gathering technicality concluded in a settlement with state lawmakers to delay the legalization campaign one year.

"Marijuana is no longer a controversial issue," CRMLA spokesperson Tom Haren said in a public statement. "Ohioans demonstrated this by passing State Issue 2 in a landslide. Ohioans are being extremely clear on the future they want for our state: adult-use marijuana legal and regulated.”

With Issue 2’s passage, Ohio will join four of its Midwest neighbors in expanding to adult-use cannabis legalization, including Michigan (2018), Illinois (2019), Missouri (2022) and Minnesota (2023). Notably, Ohio’s nearly 12 million residents provide a tipping point for reform in the U.S.: More than half the county’s population—roughly 52.7%—now lives in a legalized adult-use state.

Among 24 states that have legalized adult-use cannabis—including Ohio—13 states approved citizen-initiated ballot measures, two states approved legislature-referred ballot measures, and nine states enacted bills through the legislative process.

“I could not be happier to see Ohio join the list of states that has finally decided that it is time to end prohibition,” said Geoff Korff, CEO and chief operating officer of Galenas, an Akron, Ohio-based medical cannabis cultivation company that also has operations in Michigan. “Now we need to make sure that we are holding our elected officials accountable to the language of Issue 2 and see that it goes into effect as written.”

Holding elected officials accountable appears to be a common theme among Ohio medical cannabis company executives who spoke with CBT. And their concerns don’t come without reason.

Just last month, Ohio Senate President Matt Huffman, R-Lima, called cannabis legalization a “mental health crisis” in his opposition to Issue 2 during a floor speech in his chamber. After his speech, he told reporters, “I will advocate for reviewing it and repealing things or changing things that are in it,” the Statehouse News Bureau reported.

Overall, 25 of the 26 Republican state senators in Ohio opposed the referendum, according to BallotPedia. And Ohio Gov. Mike DeWine and Ohio House Speaker Jason Stephens—both Republicans—also opposed the legalization measure.

But in Ohio, which carried Republican majorities the past two presidential elections, the voters chose legalization over prohibition on Election Day. That’s because cannabis is not a red or blue issue, Jeff McCourt, founder and CEO of Firelands Scientific, a vertically integrated medical cannabis company based in Ohio, told CBT.

“We are thrilled to see Ohioans turning out and showing—across all political parties—how deep and widespread the support is for responsible cannabis policy for our state,” McCourt said. “The election results clearly show that allowing adults to consume regulated, tested, safe cannabis products is not a red or blue issue in Ohio but a common-sense basic liberty shared by conservative and rural areas of the state as well as those in our big cities and suburbs.”   

While Ohio lawmakers had the opportunity to use the legislative process to review the initiated measure’s text earlier this year and amend it to adopt their own legislation, they chose not to act. As a result, CRMLA advocates collected the signatures necessary to put their proposal before voters.

These lawmakers should now honor what their constituents voted for, said Jared Maloof, CEO of Gibsonburg, Ohio-based medical cannabis operator Standard Wellness. Maloof, his co-founder and a fellow business executive at Standard Wellness contributed $377,500 as the CRMLA campaign’s second largest donors after Marijuana Policy Project’s $2.8 million in contributions, according to public records from the Ohio Secretary of State.

Source: Ohio Secretary of State

“The people have spoken and delivered a clear message in support of adult-use of marijuana,” Maloof told CBT. “We strongly urge the Legislature to respect the will of the people and protect the language the people voted for by letting the new program operate for a few years before considering any changes.”

In an official voter argument in support of the measure, CRMLA advocates said their proposed law “models the best practices of 23 others states” that have already legalized adult-use cannabis. For example, Issue 2’s initiated text calls for a 10% excise tax at retail, which mirrors Michigan, where low prices and widespread access have left little room for the unregulated market to compete. 

In Michigan, which has a population of roughly 10 million people, licensed cannabis dispensaries are on pace to record more than $3 billion in cannabis sales in 2023—the state’s fourth full year of a commercial market—according to its Cannabis Regulatory Agency.

In Ohio, an adult-use program could take on a similar trajectory.

Under Ohio’s proposed adult-use cannabis tax structure, which includes a 10% excise tax, 5.75% state sales tax and a maximum 2.25% local sales tax, the Ohio State University’s Drug Enforcement and Policy Center projected in August that a legalized market would generate between $276 million and $403 million in annual tax revenue by the fifth year of commercial cannabis operations. Cannabis market research company BDSA projects that the medical market alone is on track to hit $520 million in sales by the end of this year, and, once an adult-use market launches, climb to $1.65 billion in 2027. In 2022, the sales in the state grew 26%, BDSA noted. 

Under prohibition, a significant portion of those potential tax dollars aren’t being collected or are flowing elsewhere, like to Michigan’s operating budget, said Andy Rayburn, the CEO of vertically integrated cannabis company Buckeye Relief, which operates a 65,000-square-foot indoor cultivation and processing facility near Cleveland. The company contributed $50,000 toward the CRMLA campaign.

Buckeye Relief was one of the original licensees in Ohio’s medical market, which was legalized in 2016 via House Bill 523 and signed into law by former Republican Gov. John Kasich. There are now roughly 185,000 active patients in the program.

“Buckeye Relief is thrilled that Ohio voters supported Issued 2,” Rayburn told CBT. “As one of Ohio’s first cannabis providers, we remain committed to producing effective and consistent products, and welcome the opportunity to participate in Ohio’s adult-use market. This legislation will also help eliminate Ohio’s [illicit] market and keep tax dollars in Ohio that are currently flowing to Michigan and neighboring recreational markets.” 

Voter-passed Issue 2 directs the state to establish a Division of Cannabis Control (DCC) within the Ohio Department of Commerce to oversee a regulated marketplace, including the licensing of cultivators, manufacturers, dispensaries and testing laboratories.

More specifically, the measure (as written) provides Ohio’s existing medical cannabis operators, including 37 cultivators and 111 dispensaries, first-mover advantage in a forthcoming adult-use market. Commercial sales could commence as soon as September 2024.

Within six months after Ohio’s adult-use law becomes effective, the DCC is required to promulgate rules and begin accepting license applications. And within nine months of the effective date, the DCC is supposed to issue the first batch of licenses, according to Haren, who, in addition to being CRMLA’s spokesperson, is a partner and chair of Cleveland-based cannabis law practice Frantz Ward LLC.

Also included in Ohio’s voter-approved measure, the DCC is required to add 40 new cultivation licenses and 50 new dispensary licenses to the adult-use program, which are to be issued “with preference to applicants who are participants under the cannabis social equity and jobs program,” according to the initiated text. The Ohio Department of Development is responsible for certifying applicants for the program.

Thirty-six percent of the revenue generated from the state’s 10% excise tax will fund this social equity and jobs program. Another 36% of revenue will go toward supporting municipalities with dispensaries, while 25% will go toward education, substance abuse and addiction treatment programs, and 3% will go toward covering state costs to run a legalized program.

The DCC could reassess market conditions and award additional adult-use licenses 24 months after the first batch of adult-use licenses are initially issued.

Also under the approved ballot measure, local control is preserved for municipalities to adopt resolutions to ban or limit the number of adult-use cannabis operators permitted in their jurisdictions. However, municipalities where medical cannabis cultivators and processors exist cannot restrict or limit these licensees from transitioning to adult-use operations, but municipalities can restrict existing medical dispensaries not connected to cultivation or processing facilities from transitioning to adult-use sales within their jurisdictions.

While Issue 2 passed, the heavy lifting of implementing an equitable and knowledgeable marketplace now begins, Ariane Kirkpatrick, CEO of Harvest of OH, told CBT. Harvest of OH, which contributed $50,000 toward the CRMLA campaign, is a woman- and minority-owned medical cannabis company.

“We are excited Issue 2 has passed and that the state of Ohio is an adult-use state,” Kirkpatrick said. “Now the real work begins as we must continue to advocate for women and people of color interested in accessing the cannabis industry; we must continue to educate the residents of Ohio on the qualifying conditions for medical marijuana as residents will still be able to obtain a medical marijuana card; we must educate all residents 21 and older on how to safely access marijuana through the new marijuana program; and we must continue to collaborate with legislators on language in the proposed bill to benefit patients, new customers and small businesses. We are just getting started on an ever-changing industry that has the potential to benefit us all in the state of Ohio.”

More Industry Reactions

“This is a great day for Ohio, which now joins the growing number of conservative-leaning states that have ended the injustice of cannabis prohibition. Our organization is proud to have been a member of a strong coalition of groups that advanced common sense cannabis policy for the people of Ohio by supporting Issue 2. This victory represents the culmination of a years-long effort, as MPP also played a pivotal role in the passage of Ohio’s medical cannabis law in 2015." – Matthew Schweich, executive director of the Marijuana Policy Project

"While I am happy to see my home state of Ohio become the 24th state to legalize cannabis for adult use, there’s a big difference between passing a marijuana legalization initiative and implementing one and I know it's going to be an uphill battle in Ohio for equitable reform. I urge state leaders to take immediate action to ensure the implementation of the state’s adult-use regulatory system cannabis is fair for all Buckeyes—this means prioritizing public health and safety, public education, community reinvestment, expungement and economic opportunities for underserved communities." – Cat Packer, director of drug markets and legal regulation for the Drug Policy Alliance

"Cannabis legalization is an issue that unites Democrats, Republicans, and Independents. Ohioans have seen similar legalization laws adopted in neighboring states, and they know that regulating the cannabis market is preferable to the failed policy of prohibition. It is imperative that elected officials respect the voters’ decision and implement this measure in a manner that is consistent with the sentiments of the majority of the electorate." – Paul Armentano, deputy director of NORML

“Cannabis reform is inevitable, but very hard work. From coast to coast, people from all political stripes have realized the importance of legalizing marijuana and ending the failed war on drugs. The people overcame opposition from Ohio Republican state legislators to secure landmark legislation. Now our attention is trained on next steps. The sooner the federal government becomes a partner in the path forward, the safer and better off our small businesses, veterans, and communities will be.” – U.S. House Rep. Earl Blumenauer, D-Ore.

“It is clear when cannabis is on the ballot—people turn out to vote—and we commend the people of Ohio for raising their voices on an important issue that has helped break down barriers of partisanship in states across the country. Now, over 85 percent of the U.S. population lives in a state with some form of legal cannabis, and over 50 percent reside in a state with adult-use cannabis—the tipping point has been reached. The total U.S. cannabis market is estimated to exceed $100 billion in sales a year, with less than 30 percent of that coming from state-regulated programs. As states like Ohio—the seventh most populous state with nearly 12 million residents—pass and develop adult-use programs with appropriate cannabis laws, it will continue to help bring consumers into the regulated, safety-focused cannabis industry. Even with regulated channels contributing to less than a third of the total U.S. cannabis consumption, the regulated industry still generated over $4 billion in tax revenue for states last year.” – Charles Bachtell, CEO, Cresco Labs

“The results of today’s election reaffirm Ohioans’—and Americans’—overwhelming support for cannabis legalization. As a proud participant in Ohio’s medical cannabis program since 2016, we look forward to serving even more Ohioans with high-quality cannabis products and personalized recommendations and care. Ohio’s adult-use program will create more jobs, more tax revenue and greater investment in communities statewide.” – Tim Conder, CEO, TILT Holdings

"Today marks another historic moment for the cannabis industry and for Ohio, as voters have chosen to end Prohibition 2.0 in the Buckeye State. This vote is not just about legalization; it's a recognition that Americans are continuing to embrace cannabis for well-being. At Green Thumb, we are eager to support the people of Ohio in this next phase of cannabis. Having operated multiple medical dispensaries in Ohio since 2019 and supported several adult-use transitions in other markets, we are excited to serve even more of the community, fostering positive impacts and education around the plant. We celebrate and congratulate Ohio on becoming the 24th state to legalize adult-use cannabis." – Ben Kovler, CEO, Green Thumb Industry 

“We are thrilled that Ohio voters have elected to make adult-use cannabis a reality in the state. The passage of Issue 2 is a win not just for Ohio but for the cannabis industry overall, as there are now 24 states that have legalized adult use. We look forward to the official regulations as we prepare for the launch of this market. Curaleaf has successfully transitioned several medical markets to adult use, and we welcome the opportunity to provide high quality cannabis products to both medical and adult-use cannabis consumers in the Buckeye State.” – Matt Darin, CEO, Curaleaf

“AYR Wellness congratulates Ohio advocates and voters for coming together to pass Issue 2 on this year’s ballot, legalizing adult-use cannabis in the state. Every step towards more widespread legalization reflects the collective efforts of advocates and operators coming together in support of the plant and the people who make up this industry.” – David Goubert, President & CEO, AYR Wellness

Cannabis Business Times Editorial Director Noelle Skodzinski, Editor-in-Chief Michelle Simakis and Senior Digital Editor Melissa Schiller contributed to this report.