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In the aftermath of yesterday’s election, Ohioans are either celebrating or bemoaning the passage of State Issue 1, which establishes a constitutional right to abortion in the state, and also the passage of State Issue 2, which authorizes the legislative enactment of adult-use sales of cannabis in the state in addition to home grow. What is particularly interesting about the results of the election, however, is the fact that the two ballot measures passed by essentially identical margins – 57 percent for, 43 percent against – and that an overlay of the state map by county result suggests a strong correlation among voters between the two Issues while also highlighting the fact that plenty of people in Ohio’s reddest counties like weed even if they are anti-abortion.
The conclusion of pundits and observers prior to election day was that the main driver of people to the polls in Ohio yesterday was abortion, not cannabis, which makes sense. The hot-button nature of Issue 1 not surprisingly resulted in turnout being on a par with last year’s election, when governor and senate races dominated the state. According to the Ohio Secretary of State, over 3.8 million people voted out of 7,988,132 voters statewide this year, and among those, 2,186,962 people voted yes on abortion and 2,183,734 people voted yes on cannabis. 1,675,728 and 1,649,339 people voted no, respectively.
I was curious if and how abortion as the driver would potentially impact the cannabis vote, but there was no discernible correlation prior to election day. “I don’t have any basis for an opinion on that,” said Scott A. Johnson, an attorney with Toledo, Ohio-based law firm Eastman & Smith. “Just because somebody is pro-life or pro-choice doesn’t give me any reason to think that they would be either for or against adult use cannabis.”
But Johnson had noticed something very interesting in the run-up to November 7. “There is zero advertising going on about Issue 2, but you can’t turn the morning news on and sit there for five minutes without seeing an advertisement with a position one way or the other about Issue 1,” he said. “I have not seen a single commercial or pamphlet or advertisement that addresses Issue 2. That is something I find super interesting.”
A day later, the results of the election – with every precinct fully counted but provisional ballots and early mail-in ballots still to be tabulated – indicate very close parallels in the way people voted, with exceptions that appear to have only benefited the cannabis ballot measure. The best way to assess these results is to examine interactive maps that delineate the county-by-county election results by Issue 1 and Issue 2, courtesy of the New York Times. As was expected, the urban areas of Cleveland (Cuyahoga County), Columbus (Franklin County), Cincinnati (Hamilton County), Toledo (Lucas County), and Dayton (Hamilton County) voted mainly in support of abortion rights, with the more rural counties voting against Issue 1. Not surprisingly, the same five counties also supported adult-use cannabis. Athens County, in the southeast part of the state, also had a large majority of voters who voted in support of both Issues.
Needless to say, voters opposed to abortion were in the majority in many counties, including several clustered along the western border of the state. Of these, several counties also had majorities that voted against adult-use cannabis, including Darke, Mercer, Auglaize, and Shelby Counties. Putnam and Holmes also racked up large margins against cannabis, and many other counties recorded smaller margins against the legalization of adult-use cannabis, but the county-by-county votes also indicate that in many cases, a small but ultimately significant numbers of voters peeled away from their opposition to abortion in support of cannabis.
The county most opposed to abortion is one such example. Putnam County recorded the highest percentage of votes against Issue 1, at 83 percent (11,977 votes). Only 2,405 voters in the county voted in support of abortion rights. When it came to Issue 2, however, 69 percent voted no (9,896 votes) and 31 percent (4,370 votes) voted in support of adult-use sales. Similar to other counties, around 80 to 100 people decided to skip the cannabis question, but enough people split their votes to drive Issue 2 to victory. Despite the fact that a majority of counties voted against Issue 2, more voters in those counties voted for it than opposed it in the counties with pro-cannabis majorities. By contrast, the margins in most counties on abortion were much greater.
The Clock Has Started Ticking
The passage of Issue 2 means that the race to open applications has begun, and every decision made by legislators and regulators will have intended or unintended consequences from this moment forward. As New York and other states have made very clear, getting it wrong at the beginning can result in a world of pain for thousands of people, not to mention the possibility of very expensive lawsuits against the state. Getting the timeline and the order of business right is the first essential step in not messing the whole thing up.
In Ohio, the proposed legislative initiative goes into effect within 30 days, which is not a lot of time. “I actually just posed this question to some of my partners,” said Johnson. “Once they set up the Division of Cannabis Control (DCC), they then have an obligation to do a bunch of rule-making, so how quickly does that happen?”
The ballot measure contains other deadlines. “There is language that says the DCC is required to issue licenses within nine months from the effective date of new legislation,” added Johnson. “If the effective date is 30 days from passage, that means we’re in September or October of next year that the Division is supposed to be issuing licenses. That seems pretty aggressive, and I would be shocked if they’re able to put things in place that quickly, but that’s what is proposed here.”
Of course, the fact that it is a legislative initiative rather than a constitutional amendment means that opponents of the measure may still be able to influence how or even if it comes to fruition. “There would be nothing to prevent the legislature from amending it further or even repealing it,” warned Johnson. “I’ve been telling people that we can carefully analyze the language that’s being proposed, but I’m not sure that what we see today is what we’re going to get.”
As to whether it is inevitable that changes will be made to the current language, Johnson replied simply, “I expect that there will be.”
That was all but guaranteed by Kevin Sabet, president of Smart Approaches to Marijuana Action, who said after the vote, “This fight is not over.” According to WLWT5, “[Sabet] called on state lawmakers to eliminate provisions of Issue 2 that allow for commercial sales, advertising and production, at a minimum.”
A Medical Leg Up
Interestingly, the bullet-points for Issue 2 that were presented to the public did not indicate the advantages that come with having a existing medical cannabis license in Ohio. The reason for that exclusion could be Ohio’s history with efforts to pass adult-use cannabis in the state.
“Cannabis was on the ballot several years ago in Ohio,” explained Johnson, “and at that time it was a constitutional amendment initiative, so the vote of the Ohio electorate would have resulted in a constitutional amendment to legalize recreational marijuana. It went down largely because there was wording in the proposed amendment that essentially would have given a monopoly over recreational marijuana to certain players in the industry, and there were a lot of people that were for the legalization of recreational marijuana that were against that amendment. This time it’s different. It’s a legislative directive, not a constitutional amendment, and it doesn’t have language that would be construed as granting monopoly to anybody.”
It does, however, include language that grants adult-use licenses to existing licensees throughout the existing supply chain:
The following licenses shall be issued by the division of cannabis control within nine months of the effective date of this section if the license applicant is in compliance with section 3780.11 of the Revised Code and this chapter, and the license applicant, or the same owners of the license applicant, have a certificate of operation or medical provisional license issued as of the effective date of this section:
(1) A dispensary issued a certificate of operation or medical provisional license shall be issued an adult use dispensary license under this chapter for the current location of the dispensary;
(2) A level I cultivator issued a certificate of operation or medical provisional license shall be issued under this chapter three adult use dispensary licenses at locations designated in a license application, and one level I adult use cultivator license for the current location of the level I cultivation facility;
(3) A level II cultivator issued a certificate of operation or medical provisional license shall be issued under this chapter one adult use dispensary license at a location designated in the license application, and one level II adult use cultivator license for the current location of the level II cultivation facility;
(4) A dispensary issued a certificate of operation or medical provisional license shall be issued under this chapter one adult use dispensary license at a different location as designated in the license application if the dispensary does not have any common ownership or control with any level I adult use cultivator, level II adult use cultivator, or adult use processor license applicant or licensee;
(5) A processor issued a certificate of operation or medical provisional license shall be issued under this chapter one adult use processor license for the current location of the processor; and
(6) A testing laboratory issued a certificate of operation shall be issued under this chapter one adult use testing laboratory license for the current location of the testing laboratory.
According to Johnson, this was not entirely unanticipated. “The number of medical dispensaries has increased significantly over the past year or so, and that’s because our medical dispensaries were under-serving people interested in getting medicinal marijuana,” he explained. “The Board of Pharmacy issued 60 or 70 more permits throughout the state. There was a permit process held last year that was essentially a lottery, and there was a significant amount of interest to get these additional medical permits because people in the industry expected that this recreational use was coming, and the way that this legislation is drafted, if you’ve got a medical permit you’re going to be able to get the recreational license.” There are currently 113 licensed medical cannabis dispensaries throughout Ohio.
“Mind you, this is what it says today and the legislature could amend it,” added Johnson, “but what is proposed today is that if you are already here and you’ve got a medical dispensary, you’re going to be able to expand into the recreational market, and what I saw last year was a lot of interest and a lot of people clamoring to get into that lottery to get a medical dispensary license, because it was anticipated that this was coming.”
The ballot measure also included provisions for a social equity program to be administered by the DCC, requiring it “to provide preferential treatment to applicants who have qualified for the cannabis social equity and jobs program based on social disadvantage when issuing level III adult use cannabis cultivator licenses and dispensary licenses.”
I asked Johnson if we should interpret that to mean that they will prioritize those groups when they issue new adult-use licenses. “That’s what I would expect,” he said.
Ohio’s Heavy Hand
Johnson added another note of caution for those expecting an Ohio rollout similar to other states. “The thing that’s interesting about Ohio is that it’s a state-run system for liquor sales,” he said. “The State Liquor Control Board controls the price of liquor in the state of Ohio, the amount of liquor that comes into the state of Ohio, and the number of stores that can sell liquor in the state of Ohio. That is all closely regulated. Of course, medical marijuana has also been regulated very heavily, and I expect that recreational use will as well, unlike states like Michigan.
“We’re a stone’s throw from Michigan, where we have a lot of clients that are operating in this space,” he added. “When adult-use was legalized in Michigan, it was kind of the Wild West, and if the local jurisdiction you were in okayed it, you could get any number of permits. As long as you passed muster at the state level, you could get a permit for your location and open a dispensary unless the local jurisdiction limited the number of dispensaries they were going to authorize. As a result, what we’re seeing in Michigan now is that there is over-supply compared to demand because of all of the dispensaries that sprang up. I don’t expect that that’s going to happen in Ohio, because I think they’re going to limit the number of dispensaries statewide to some extent. And I think that’ll be very important.”
A Surge of Sales in 2025 and Beyond
Assuming the legislature accepts the will of the people and does not gut or completely invalidate the legislative intent of Issue 2, the resulting adult-use cannabis market is expected to be a huge boon to the state.
In a press release issued today, market research firm BDSA announced that it is expanding its Retail Sales Tracking and Menu Analytics products to include Ohio’s medical cannabis market, and says that the state will see a steady increase in cannabis revenue in the coming years. “This expansion comes as a response to the growing demand and dynamic growth of the Midwest cannabis markets, including Ohio, which experienced 26 percent sales growth in 2022 and is on track to reach $520 million in sales by the end of this year,” reported BDSA.
The company anticipates further expansion as adult-use comes online. “BDSA projects that Ohio will launch adult-use cannabis in 2025, contributing an estimated $300 million in that year alone,” it stated. “As a result, the total legal cannabis market in Ohio is anticipated to surge to $820 million in 2025 and an impressive $1.65 billion in 2027, establishing Ohio as one of the fastest-growing legal cannabis markets in the United States.”
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