While Ohio is working on its seventh legalization of recreational marijuana, Michigan is also continuing its efforts. Michigan receives the largest amount of state revenue from cannabis sales, at approximately $3.2 billion (1), surpassing Colorado's $2.7 billion. And considering Michigan's excise tax is 10% and sales tax is 6% on retail sales (2), that would mean $320 million in new revenue for the state. Masu. In 2023, Michigan collected more than $270 million in marijuana tax revenue. (3) It remains to be seen whether Ohio will be able to generate this level of revenue from adult-use cannabis sales, but projections are Expensive (4).
Ohio is caught up in reefer madness (5) as a right-wing legislature and designated marijuana control division continue to limit the number of licenses issued. On November 7, 2023, Ohio voters approved the legalization of recreational marijuana use, but this approval eliminates marijuana's status as a controlled substance prohibited under Ohio law for licensed liquor establishments. It hasn't changed (6) and the Ohio General Assembly is working hard. Rewriting laws regarding taxes, the allocation of tax revenue, the issuance of licenses, application limits, and even restrictions on possession and consumption. (7) The rule currently under consideration requires stakeholder comments by October 9, 2024. (8) To add. In response to this challenge, over 100 local governments have enacted moratoriums prohibiting adult use of cannabis within their jurisdictions (9).
Even though the proposed rules are being amended again (10), Ohio will open its first door to recreational use on August 6, 2024, with most of the state's dispensaries serving medical and recreational use. I applied for dual use of . (11) There are also licenses issued for cultivation, processing, and testing services for dispensaries. It will likely take several months for the Ohio business to take off, and costs in Ohio are expected to be significantly higher than in the competitive Michigan market (12).
But the comparison between Michigan's open market and Ohio's supervised licenses will be interesting. Michigan's oversupply and intense competition have left much of the industry in the red. (13) Toledo, the largest city on the Michigan-Ohio border, has the first pharmacy and could contribute to a 23% decline in Green Mile sales. (14) A friend recently visited a local pharmacy and found that prices were three times higher than Michigan's average product cost and that Ohio's current and proposed advertising regulatory requirements protect the sales counter. (15)
And the Fed is not cooperating with the situation. The Drug Enforcement Administration (DEA) has accepted the U.S. Department of Health and Human Services (HHS) recommendation to reschedule cannabis from Schedule I to Schedule III under the federal Controlled Substances Act (CSA), but in April 2024. See article on 30th. There is still a long way to go before the long-awaited rescheduling occurs, as the DEA plans to hold hearings on this topic after the 2024 presidential election.
But more importantly, while the schedule change is expected to help reduce the tax burden for cannabis operators, the It does not legalize or allow the sale of cannabis across state lines.
(1) Ohio State Helps Michigan Become No. 1 in Weed Sales, But Probably Not For Long | Michigan Bridges
(1) Michigan sells more marijuana than California, but Ohio is gaining momentum (lansingstatejournal.com)
(2) Marijuana Retailer Excise Tax (MRE) Tax (michigan.gov)
(3) Increased revenue: How cannabis sales are impacting Michigan communities (upnorthlive.com)
(4) What tax revenue should Ohioans expect if Ohio legalizes adult-use cannabis? Written by Jana Hrdinova, Dexter Ridgway :: SSRN
(5) Reefer Madness – Wikipedia
(6) Use of Marijuana by Adults on the Premises of a Liquor License | Ohio Department of Commerce
(7) Comparison of Issue 2 Recreational Cannabis Initiative and the Ohio General Assembly's proposed amendment (osu.edu)
(8) Proposed Rule – Early Stakeholder Outreach | Ohio Department of Commerce
(9) Ohio Marijuana Moratorium | Moritz School of Law (osu.edu)
(10) DCC Proposed Rule |Ohio Department of Commerce
(11) Which dispensaries in Ohio sell recreational marijuana (nbc4i.com)
(12) Ohio State Helps Michigan Become Number One in Marijuana Sales, But Probably Not For Long | Michigan Bridge
(13) Michigan: Cannabis market struggles with oversupply and falling prices – Benzinga
(14) Ibid.
(15) Senate Bill 278 | 135th General Assembly | Ohio House of Representatives
This article was published by JD Supra
