CLEVELAND (WJW) – A hazy cloud surrounds the distribution of tax revenue generated from recreational marijuana sales in Ohio.
The state plans to hold onto more than $10.8 million, funds due to municipalities, according to recreational marijuana law.
The funds are more than likely not coming due to a legal language issue left out of Issue 2, according to the office of Governor Mike DeWine.
“Issue 2 as passed did not appropriate any funds to cities,” press secretary Dan Tierney said via email. “We understand the frustration of being told this by those who drafted Issue 2 and coming to find out Issue 2 did not contain appropriations of funds the drafters promised any government entity.”
Cannabis is taxed at 10% in Ohio and 36% of tax revenue generated goes to municipalities who opted-in, allowing dispensaries under the framework of Issue 2.
Since it was legalized, more than $30 million in tax revenue has been generated through February, which means $10.8 million should be going to municipalities.
The city of Cleveland believes it should receive $410,000 for 2024, using rough estimates based on the six dispensaries in the city.
There are 128 dispensaries across Ohio.
DeWine aims to re-appropriate this tax revenue in the Fiscal Year 2026 Operating Budget, redirecting it to combat the ills of drug use.
“The governor’s proposal uses these funds to help improve local jails, fund the 988 behavioral health crisis hotline, provide law enforcement training and other priorities,” Tierney said. “The state funding these priorities will free up local funds for other purposes and local priorities.”
Many municipalities planned to include these funds in their city budgets.
“The state is talking about changing the rules in the middle of the game,” Ohio Municipal League Director Kent Scarrett said.
The Ohio Municipal League is an organization representing 732 of close to 900 cities and villages in Ohio.
Scarrett said many municipalities would not have added the dispensaries if they weren’t going to get a fair share of the tax revenue generated.
“I think that there’s some cross current activity in the legislature that wants to undermine the whole system,” Scarrett said.
DeWine also proposes raising the tax rate from 10 to 20%.
“This legislature really isn’t really fond on increasing taxes unless they want to discourage an activity in the state,” Scarrett said.
The Ohio Senate and House plan to make changes to adult use cannabis law through Senate Bill 56.
Many people who spoke to FOX 8 off camera told us they oppose these changes, which undermine the will of the people who strongly voted for the framework of Issue 2.
The city of Lakewood said it is unsure if it will receive any tax revenue from recreational marijuana sales and are awaiting the state legislature’s decisions in the budget.
On March 3, Lakewood City Council and the mayor passed a resolution opposing the effort to repeal the Host Community Cannabis Fund.
