A new campaign to legalize cannabis in Ohio launched a new advertisement on Wednesday. The ad draws attention to the potential tax revenue that could be lost by Ohio when residents buy cannabis from states nearby, such as Michigan.
This message was sent just days after an economic analysis revealed that Issue 2 on the ballot would produce net benefits of around $260,000,000 to the state annually.
Scioto Analysis stated this week that, although there’s a chance that the costs will outweigh benefits, in 90% of scenarios recreational marijuana legalization would have a net positive economic benefit for society. The model also predicted that, “extremely negative results are less likely than extremely positive results.”
Overall, 90% of the modeled scenarios predicted outcomes that ranged from a $150-million net loss for Ohio up to a $1.9-billion net gain.
The Campaign to Regulate Marijuana Like Alcohol (the main supporter of Issue 2) has released a new advertisement that highlights the amount of money lost by Ohioans who travel to Michigan, where marijuana is legal. The ad is produced to look like it was made in Morenci Michigan, the southernmost city of the state and close to Ohio’s border.
The spot states: “We are only 2,000, but we have 5 marijuana shops and we’re ready to serve Ohio!” “Ohioans flock to Michigan to purchase marijuana. Look at these Ohio license plate numbers.
The advertisement notes that Ohioans’ tax dollars are used to fund the schools, roads, and other investments of Michigan.
The conclusion of the article is: “We hope Ohio will let us keep Ohio tax money.”
Tom Haren said, in a release, that “like most Ohioans, I want my tax dollars to stay in Ohio and be used for strengthening our communities.”
He said that Ohioans could deliver a serious blow to “That State Up North” by voting yes for Issue 2.
Tax revenue dominates Scioto’s 13-page analysis. The 10 percent tax on marijuana would bring in an estimated $190 million of tax revenue, according to Scioto. Researchers at Ohio State University found that a separate study published in August showed that the change would bring in an estimated $404 million annually in tax revenue.
The other main considerations are impaired driving, employment, and crime.
Michael Hartnett said that the use of tax dollars will be a key factor in determining whether marijuana legalization benefits outweighs costs. The programs described in the ballot initiative are historically very efficient ways of using public dollars and will generate a great deal of value for Ohioans.
The report states that investments in addiction recovery and job training programs would be particularly beneficial. For example, Scioto claims that $67 million of the projected $190 millions in annual tax revenues would go to a Cannabis Social Equity and Jobs Fund. This would generate $390,000,000 in benefits. The same $46 million would produce $430 million of benefits if it was put into a separate Substance Abuse Addiction Fund.
The analysis also found that Issue 2 would create approximately 3,300 jobs within the first year of legalization. This would result in roughly $190 millions in wage benefits to workers throughout the state.
New analysis: Legalizing recreational marijuana in Ohio will result in hundreds of millions of dollars in benefits. https://t.co/MQMyGtdk4H
Rob Moore (@RobMoorePayLess 24 October 2023
The report states that ending prohibition in Ohio will result in fewer arrests, which is a positive for society, “because arrests cost both law enforcement and those arrested, about $4,400 per marijuana-related arrest.” Using ACLU data, the report estimates each marijuana-related charge costs taxpayers around $4,400. The report states that being charged with marijuana-related offenses costs individuals an average of $10,900, including attorney fees, lost income, and other expenses.
Scioto estimated that legalization in Ohio could result in 4,400 arrests less per year. This would amount to an annual saving of about $38 millions.
The report states that lower worker productivity could be a source of social costs resulting from legalization. The report says that if legalizing recreational marijuana will increase consumption, it will also lower productivity.
Scioto’s 2017 report cites a report that shows that in four industries – mining, arts and entertainments, construction, hospitality and food services – the average productivity has fallen by just under 1 percent. This is true for states that have legalized cannabis for adult use. It continues that while these inefficiencies may be resolved in the future, the legalization of adult-use cannabis in Ohio might result in a loss of productivity worth $760 million during the first legal year.
A 2021 study by the National Bureau of Economic Research concluded that legalizing adult-use marijuana is linked to an increase in workforce productivity as well as a decrease in workplace injury.
Another cost could come from impaired driving. According to the Scioto Report, this increased by 16 % in Colorado following legalization. Analysts predicted Ohio would experience 1,700 additional cases of operating a vehicle intoxicated each year, and that the state would lose $130 million per year as a consequence.
The key provisions of the measure for legalization on the 7th November ballot:
- This initiative will allow adults over 21 to possess up to 2.5 ounces (or 15 grams) of marijuana. They can also possess up to 1.5 grams of marijuana concentrates.
- Each individual could grow six plants to use for their own personal needs, and a maximum of 12 plants in a household.
- The 10 percent tax on cannabis sales would go to fund social equity and job programs (36%), localities who allow adult-use marijuana businesses to operate in their areas (36%), education and drug misuse programs (25%), and administrative costs for implementing the system (3%).
- The Department of Commerce would establish a Division of Cannabis Control. The division would be able to “license and regulate adult-use cannabis operators, adult-use testing laboratories, as well as individuals who are required to have a license.”
- This measure will give current medical cannabis businesses an advantage in the recreational market. Within nine months after the law’s enactment, regulators would have to start issuing adult use licenses to applicants who are qualified and operate medical cannabis operations.
- The division will also have to issue 50 adult-use retail licenses, and 40 recreational cultivator licences. This is “with preference given to applicants who are participating in the cannabis social equality and jobs program”.
- Municipalities could opt not to allow new recreational cannabis businesses to open in their region, but existing medical marijuana companies would still be allowed to operate even if adult-use operations were to be added. Employers can also enforce policies that prohibit workers from using cannabis for adult purposes.
- The Department of Mental Health and Addiction Services would also be required to enter into an agreement to provide “cannabis-addiction services,” including “education and treatment” for those with addiction issues to cannabis, or other controlled substances such as opioids.
- Some advocates worry about the lack specific language regarding automatic expungements, which would clear the records for people who have convictions from crimes that would become legal under the new legislation. The measure includes a clause requiring regulators “to study and fund” criminal reform initiatives, including expungements.
The polls conducted by lawmakers and likely Ohio voters suggest that Issue 2 is going to pass in the next month’s election. A recent survey found that 57% of likely voters supported the legalization measures, including a small majority of Republicans. A survey of 35 state legislators found that majority of Democrats (63%) and Republicans (52%) expected voters would approve the measure.
While Ohio legislators might expect that the initiative will pass, many Republican officials do not want it to. The GOP-controlled Senate, which is in charge of early voting this month passed a resolution encouraging residents to reject the measure.
Mark Romachuk, a Republican State Senator, warned that the passage of Issue 2 could lead to increased problems for children on roads and in the workplace. According to reports, he stated that this creates challenges for maintaining safe workplaces in industries like Ohio’s Manufacturing Businesses, which require high alertness, precision, and accuracy. These concerns led the Ohio Manufacturers Association, the Ohio Business Roundtable and the Ohio Chamber of Commerce to oppose the legalization of recreational marijuana.
Romachuk also criticised the initiative’s 10 percent proposed tax as being too low. He said that the 10 percent tax that the marijuana industry set for itself was one of the lowest taxes in the nation. No money would be allocated to the counties which administer the human service programs, who will have the responsibility of managing the increase in abuse and addiction.
Senate President Matt Huffman, (R), said in an earlier statement that would “come right back to this body” so lawmakers could amend. Huffman clarified later that he would not seek to repeal the plan in its entirety, but instead advocate for “reviewing it and repealing or changing things within it.”
Last month, a number of Ohio legislators said that they did not believe the legislature would repeal a legalization law passed by voters. Rep. Ron Ferguson, a Republican, told The Dispatch that there is not a majority in either chamber of the legislature who would support repeal. “That is definitely not the situation. “You would not have any Democrats and there wouldn’t be enough Republicans to place them at the top.”
As the election approaches, both sides have increased their messaging and voter turnout efforts. The yes campaign sent cease-and-desist letters earlier this month to television stations that were airing opposition ads “filled with lies”. And the Campaign to Regulation Marijuana like Alcohol released its own pro Issue 2 election ad.
Attorney General Dave Yost, (R), published a report on the initiative . He said that this analysis was meant to give voters “vital transparency and clarity” in a campaign marked by “inflamed” and “inaccurate” rhetoric.
Despite the GOP resolution, other Republicans in Ohio are divided over the issue. Gov. Mike DeWine, a Republican, said, in August, that it would be “a real mistake” for us to have marijuana for recreational use. He also noted that, in 2012, he had visited Colorado and seen what he called an “unmitigated catastrophe.”
Last year, Sen. John Hickenlooper, who was Colorado’s governor in 2012 and was a Democrat, stated that he had initially been concerned that legalization might encourage more young people to use drugs, but that he now believes that these concerns were unfounded.
“I believe we have proven and shown that there has been no increase in teenagers’ experimentation with drugs.” Hickenlooper stated that there was no change in the frequency of use or driving while high. “All of the things that we were most concerned about didn’t happen.”
Unlike top Republican state legislators, U.S. Rep Dave Joyce, R-OH, co-chairman of the Congressional Cannabis Caucus said last month that he will vote in favor of this initiative in November. He also encouraged “all Ohio citizens to make their voices heard and participate in this important issue.”
The Ohio Ballot Board has approved the summary language for legalization measure.
The total number of states that have legalized adult use will increase to 24 if the initiative is passed.
Ohio voters rejected the 2015 measure on 64-36, which would have changed the state constitution to legalize pot and give the control of the market a small group producers. The organizers of the current campaign claim that they have learned lessons from the failure when crafting the current initiative.
In May , bipartisan Ohio legislators submitted a separate bill for legalizing marijuana. This gave the Ohio legislature another chance to lead the reform. It has not yet advanced, but now it is up to the voters to decide.
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