On December 6, 2023, the eve of Ohio’s voter-enacted legalization law taking effect, the Ohio Senate passed a gut-and-replace bill (HB 86-sub) to rewrite the initiative. HB 86 now heads to the Ohio House of Representatives, which reconvenes on December 13.

As originally proposed, the Senate’s rewrite of Issue 2 removed home cultivation, slashed personal possession limits, more than doubled taxes, added harsh criminal penalties, and banned possession except for cannabis purchased from a legal store — which couldn’t open for a year. Two hours before the full Senate voted on HB 86, authors unveiled a new version, claiming it respected the will of voters. It includes two positive features — limited expungement and earlier sales — and removes the ban on home cultivation and the dramatic reduction in possession limits.

But the Senate-passed version of HB 86 still ramps up criminalization — including with new mandatory minimums. It also increases taxes, caps extracts at 50%, bans vaping or smoking cannabis anywhere except some homes, eliminates social equity, makes the sale of flower cannabis impossible, and does away with non-discrimination protections for child custody, organ transplants, and benefits. It also appears to ban sharing cannabis and to re-criminalize any cannabis not obtained from an Ohio-licensed cannabis store, other than one’s own home-cultivated cannabis.

Here's a summary of the Senate-passed bill:

New Prohibitions and Limits

• Bans smoking or vaping adult-use cannabis anywhere except in some private homes.
  • In most cases, the penalty is a minor misdemeanor, with a fine of up to $150.
  • Smoking and vaping are also forbidden in childcare homes and rented homes where the landlord prohibits smoking or vaping.
  • Under Issue 2, using cannabis in public areas was forbidden, but private property owners could allow cannabis use in locations such as hotel rooms.
  • Prohibits adults from sharing cannabis. Issue 2 allowed sharing, as long as there was no remuneration.
  • Cannabis must be stored in its original packaging at all times.
  • Requires cannabis and paraphernalia to be transported in “its original, unopened packaging or in the trunk” if there is one, or in a similar location in vehicles with no trunk. Imposes a minor misdemeanor, with a fine of up to $150.
  • Appears to ban cannabis that was not purchased from an Ohio retailer or cultivated at home.
  • Keeps Issue 2’s limits of 2.5 ounces, 15 grams of concentrate, and six plants.
  • Caps the number of plants per residence at six. Issue 2’s cap was 12.
  • Requires home-grown cannabis to be transported in one’s trunk.
  • Imposes a three-day mandatory minimum in jail — plus a fine of at least $375 — for passengers smoking or vaping cannabis in a vehicle or boat. Imposes longer mandatory minimums for subsequent offenses, with a fourth offense being a felony. Issue 2’s penalty was a $150 fine.

Repeals Non-Discrimination Protections

• Repeals all non-discrimination provisions that are in Issue 2. Removes provisions that adults’ responsible use of cannabis is not grounds for:
  • adjudicating their child abused or neglected,
  • making a negative determination about a parent's rights or parenting time,
  • denying a person medical care, including organ transplants,
  • suspending one’s driver’s license,
  • rejecting an applicant as a tenant (unless mandated by federal law), or
  • disqualifying a person from public benefits.
  • Specifies a person fired for marijuana use is ineligible for unemployment benefits if the cannabis use violated their employers’ policies.

Limited Petition-Based Expungement

• Individuals may apply to have prior records expunged for up to 2.5 ounces and up to 15 grams of hashish. To apply, the applicant must submit evidence that:
  • the amount was under the threshold
  • the person did not violate a community control sanction
  • Creates process to reimburse for applications and for legal aid providing expungement assistance.

Earlier First Sales

• Allows existing medical cannabis dispensaries to sell to adult-use consumers if/when the bill takes effect, which would be 90 days after enactment.
  • This provision would end at a time determined by regulators, which must be within a year.

Raising Taxes

• Increases the retail excise tax from 10% to 15%.
  • This excise tax appears to apply to medical cannabis.
  • This is in addition to standard state and local sales taxes.
  • Allows counties to impose a 3% tax to fund entertainment, arts, and culture.
    • County commissioners would refer the tax question to county voters.

Tax Allocation

• Removes Issue 2’s allocations to a social equity and jobs fund and to communities hosting cannabis businesses. Reduces the allocation to substance abuse treatment.
• Allocates funding as follows:
  • up to 28% for county jail construction and renovation
  • up to 16-19% to the Department of Public Safety for law enforcement training
  • up to 14% to the Attorney General for law enforcement training
  • up to 9-11% to substance abuse treatment and prevention
  • up to 9% for a 9-8-8 suicide prevention and mental health crisis hotline
  • up to 5% to a marijuana expungement fund, while it lasts (after that, those funds go to substance abuse treatment and prevention and law enforcement training)
  • up to 5% to a marijuana receipts drug law enforcement fund
  • up to 5% to the safe driver training fund
  • up to 4% to the Ohio investigative unit operations fund
  • up to 3% to the division of marijuana control operations fund
  • up to 2% to a marijuana poison control fund

Þ    If funds hit individual caps, excess funds go to the General Fund.

Licensing and Social Equity

• Revises medical cannabis licensing to generally apply those provisions to adult-use businesses and to add language on how applicants will be assessed.
• Removes Issue 2’s social equity and jobs program, which required regulators to prioritize certified applicants in new licensing and which provided financial and technical assistance.
• Replaces the licensing provisions from Issue 2, which allowed many dispensaries to open a second location and which allowed some cultivators to open retail locations.
• Provides the Division of Marijuana Control will determine the number of cultivator licenses allowed at any time.
• Caps the total number of retailers at 350.
  • This is similar to the number that would be licensed under Issue 2. However, Issue 2 allowed regulators to reassess needs every two years and to increase the number.
  • Requires a half-mile buffer between dispensaries.
  • Requires applicants to demonstrate they have “sufficient liquid capital and ability to meet financial responsibility requirements” and that there is no local ban or similar prohibition on their operation.
  • Ranks applications based on factors including business, operations, security, and financial plans; proposed location; plans for generating jobs and economic development; and environmental and employment practices plans.
    • Provides if the division uses a lottery, it must group applicants into the following categories for their proposals: highly exceeds, exceeds, meets, and does not meet.
    • Applicants have increased odds of being chosen if they get higher ratings. They are not considered if they are classified as “does not meet.”

 

THC Cap for Adult-Use Sales

• Caps THC at 35% in flower and 50% in extracts. Issue 2 allowed regulators to impose caps of no lower than 35% in plant material and 90% in extracts.
  • Regulators may impose a higher limit for vaporized products.
  • Limits servings to 10 milligrams of THC and packages to 100 milligrams, other than cannabis intended for vaporization.
    • This seemingly makes sales of flower impossible. A gram of cannabis at 35% THC would have 350 milligrams of THC and be more than triple the limit.

Regulation

• Removes Issue 2’s provision allowing petitions for additional product types.
• Prohibits cannabis products from being sold in a form that “bears the likeness or contains the characteristics of a realistic or fictional human, animal, or fruit, including artistic, caricature, or cartoon renderings.”
• Creates “the Ohio investigative unit” — an investigative unit maintained by the Department of Public Safety that can inspect licenses (including their records).
• Revises caps on canopies for cultivators:
  • Level 1 cultivators could grow up to 25,000 square feet, and could get expansions to total up to 75,000 square feet
  • Level 2 cultivators could grow up to 3,000 square feet, and could get approval to expand to up to 9,000 square feet (Issue 2 allowed no more than 5,000 square feet, but provided could be authorized with no numerical cap.)
  • Imposes trafficking penalties if retailers knowingly sell any customer more adult-use cannabis than they are allowed to possess in a day.
  • Requires dispensaries to prominently display “Information about the addictive qualities of marijuana and the potential negative health consequences associated with its use.”
  • Tasks the Department of Public Safety and its enforcement agents with assisting the Division of Marijuana Control with enforcing the law.

Medical Cannabis

• It appears all cannabis businesses would be dual-use, medical and adult-use.
• Retailers must:
  • “Maintain an adequate supply of medical marijuana products to meet typical patient demand for those products.”
  • “Ensure medical marijuana products are kept separate from adult-use marijuana, properly demarcated as medical marijuana, and prominently displayed in the dispensary.”

Advertising Regulations

• Provides the advertising standards for cannabis businesses, “shall be at least as stringent as those that apply to tobacco and alcohol advertisements under state and federal law.”
• Provides adult-use cannabis cannot be marketed, advertised, or packaged “using any graphic, picture, or drawing that bears any resemblance to a cartoon character, or any fictional character or popular culture figure whose target audience is children or youth.”

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