Republican lawmakers from Ohio are proposing a slew of amendments that would cause significant changes to the state’s voter-approved cannabis legalization measure. With the new legislation taking effect last Thursday, GOP lawmakers are looking to implement changes such as banning home-cannabis cultivation, increasing cannabis taxes and adjusting how the state distributes marijuana taxes.
Titled Issue 2, the recreational cannabis legalization measure was passed by Ohio voters last month and is subject to amendments by the legislature. The measure is currently in committee and has already been subject to many attempted changes. This includes a proposal to ban voter-approved home-cultivation provisions that would allow Ohioans to cultivate up to 6 cannabis plants per home and up to 12 plants per household.
Furthermore, GOP senators are proposing to raise the approved marijuana product tax from 10% to 15% and tax cannabis cultivators at rate. Tax revenue collected from the cannabis supply chain would be spent on law-enforcement training, general state funding, safe-driving training, and substance-abuse treatment and prevention.
The voter-approved measure would have directed most of this revenue to a social-equity program and local government-hosted dispensaries.
Northern Ohio Republican Senator Rob McColley says the changes to tax revenue allocations are meant to ensure cannabis tax revenue benefits the state instead of going back into the sector. Columbiana County Republican Senator Michael Rulli says the Senate General Government Committee’s goal is to provide Ohio adults with safe cannabis products.
However, Regulate Marijuana Like Alcohol spokesperson Tom Haren has criticized the proposed amendments and said they will “gut” the measure’s most critical provisions, such as social equity and home cultivation while increasing taxes on legal cannabis. Haren noted that ramping up cannabis taxes would make legal cannabis more expensive and encourage Ohioans to purchase more affordable cannabis from the black market or from Michigan’s cannabis market.
Despite dozens of states now allowing both recreational and medical cannabis, the United States still has an entrenched illicit cannabis market that has consistently undercut the legal industry. If states such as California, which has the largest cannabis industry on the globe, still cannot compete with their illicit markets, Ohio would undoubtedly struggle to remain competitive against cheaper cannabis from the black market.
It will take some time before the proposed changes are permanent. The changes will first have to clear the Senate before heading to the House, which despite having a Republican majority is more inclined to legalize recreational cannabis compared to the Senate.
Columbus Democrat Senator Bill DeMora has also criticized the changes, saying they “ignore the will of the voters,” especially the amendments eliminating home cultivation and changing cannabis tax allocations.
Companies such as Aurora Cannabis Inc. (NASDAQ: ACB) (TSX: ACB) that keep a close eye on the industry developments happening in different jurisdictions will probably follow the goings on in Ohio to see what form the recreational-cannabis industry takes in the months to come.
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