Local government officials in Ohio “unambiguously oppose” proposed changes by lawmakers to the marijuana tax allocations that voters approved in 2023. This is according to the findings of a new report by the Ohio State University Moritz College of Law which represents 38 municipalities in Ohio.
In 2023 when voters approved adult-use cannabis, they also passed a law allocating 36 percent of marijuana taxes to local governments who host retail shops. The Republican-led bill currently being considered by lawmakers will make substantial cuts to these funds. Municipal representatives have stated that this could result in tax hikes and job losses.
The comments of officials interviewed as part the OSU research indicated that localities plan to utilize the allocations approved by voters for infrastructure and public safety.
The report states that “when it came to the way municipalities expected to spend their marijuana tax revenues, they usually spoke about prioritizing firefighting, parks, and infrastructure maintenance,” The report states that “they indicated this revenue was critical for their ability to improve their lives and maintain public security.”
The report states that “others expressed they might not continue with recreational sales in the area if revenue is eliminated,” or that revenue may have been part of their original motivation to want dispensaries.
The new OSU study states that municipalities hosting dispensaries will be expected to share roughly $22 millions in the fiscal year of 2025. This assumes that Ohio will reach a total state revenue of around $62 million.
Authors wrote that each retail store could generate $175,000 in revenue for the host community.
Ohio lawmakers are proposing to change a clause that directs some of #marijuana #tax Revenue to municipalities hosting dispensaries. We asked local host communities how the proposed changes will impact their community. Read their two cents: https://t.co/XCvYSXfBHR pic.twitter.com/oTx3PJLRAz
— Drug Enforcement and Policy Center at Ohio State (@OSULawDEPC) March 18, 2025
Researchers found 75 municipalities where Division of Cannabis Control (DCC) data indicated that at least 1 adult-use marijuana retailer was located. Next, they contacted 159 local officials such as the mayor and city manager in all 73 municipalities.
The survey was completed by 38 different localities.
A city official in Ravenna stated that any revenue generated from the sale of marijuana would help support many important city projects, including police protection, fire safety, maintenance on streets, and critical infrastructure. These funds could help improve the services we provide to our community members and residents, and reduce future tax hikes.
One, from Monroe, stated that their jurisdiction was “among the first to accept the controversial introductions of adult-use marijuana and medical cannabis amid a climate of opposition.”
Officials told the authors that “Monroe City Council” took this action with the idea of creating new revenue streams to provide services to its residents, without adding to their burden.
Euclid’s representative expressed the same sentiment: “I think that the revenue potential was a factor in our decision to allow marijuana establishments within the community.” It’s how I see it [as] A broken promise will occur if the provisions of the community host fund are changed.”
Milford reported, on the other hand, that they expected to be able to “maintain fiscal stability” and to avoid making drastic cutbacks to city services.
Three bills that will make significant changes to state cannabis laws have already been proposed. Two of the bills would change local tax laws in their current form.
The budget plan from Governor Mike DeWine is now available. Mike DeWine, R. for the fiscal years 2026-2027 will eliminate municipal allocations completely. The state marijuana tax would be doubled to 20 percent.
HB 160 would lower local allocations to 20% and sunset them after 5 years.
According to the OSU Report, marijuana revenue was collected this year but not disbursed, “because there were no appropriation provisions in the ballot measure.” Ohio’s legislature has yet to pass an appropriation of these funds.
The state collected 37,6 millions dollars in excise taxes on marijuana as of 10 March.
In a new OSU survey, municipal officials said that local communities are best placed to determine how tax dollars raised for the host localities should be spent.
An official in Lebanon said, “The city strongly believes that decisions about how to best use tax dollars should be made locally where we provide front-line service to our residents and business.”
One respondent from Lorain wrote, “It’s clear that the legislators think we don’t understand what we voted for, and they are willing to assist us as poor citizens.” “We oppose any move that the General Assembly and Governor make to influence the wishes of the people.”
OSU notes in its study that the efforts of the GOP legislators and the governor to alter the way marijuana tax revenue was spent have been met with little explanation.
The report states that “the Ohio General Assembly did not provide any rationale as to why the allocations approved by voters should be changed.” The report states that “several members of the General Assembly suggested that voters did not care or understand the details of Issue 2, when they voted in favor of it. But the official ballot language which voters were considering was very explicit regarding the tax allocations of the initiative.”
It adds: “The proposed changes are significant to local governments, and the communities which made the decision about the opening of marijuana dispensaries because of the promised future tax revenues.” Municipalities are opposed to any changes that could result in cuts to parks, public infrastructure or safety or even future tax hikes on residents.
The House Bill 160 (HB160) that affects tax allocations is part of a package of two bills that Ohio Republicans introduced this session to make significant changes to the marijuana law passed by voters. That measure, from Rep. Brian Stewart (R), and another in the Senate—SB 56, from Sen. Steve Huffman (R)—both would also create new limits and criminal penalties around legal marijuana.
SB 56 was originally amended to include local tax allocations, but it does not have tax provisions in its current version.
While the Senate bill is seen as stricter in some ways—for example, it would cut in half the number of plants adults could grow under the law—both bills would set THC limits on marijuana products, weaken or eliminate equity provisions and set a 350-shop restriction on retail across the state.
Last week, advocates from civil liberties and drug reform groups organized an event to urge opposition to the measures, as well as to the Governor’s Budget Bill. Speakers from NORML and the Drug Policy Alliance, Marijuana Policy Project, and ACLU of Ohio described them as attempts to overturn the will of the voters.
Gary Daniels is the chief lobbyist of ACLU of Ohio. He noted that lawmakers could still propose other measures. It’s expected, too, that state budget bills could be used for changes in cannabis laws. A higher cannabis excise was first introduced, and then removed, from the Senate’s bill. However, a tax increase even more steeper is included in the Governor’s proposed budget.
Daniels also said Ohio voters were passionate about reforming cannabis laws. While ACLU works on an array of issues—free speech, religious liberty, LGBT rights—he noted that “it seems that nothing activates Ohioans the same way as this particular issue.”
The reception has been much stronger and larger than our previous issues in the last two years.
Earlier this month, Ohio’s Senate president pushed back against criticism of SB 56, claiming that the legislation does not disrespect the will of the electorate and would have little impact on products available in stores.
“My message to you is that if you go to a dispensary to buy marijuana, it will not be affected by Senate Bill 56,” Senate president Rob McColley said in a podcast. You’ll only notice that packaging is not as child-friendly, but the product will still be available.
The plan, according to critics in the Ohio statehouse such as Senator Bill DeMora, who opposed the measure in the Senate, “goes in opposition to the will of voters, and will destroy the adult industry.”
In the same month in the Legislature, Sens. Huffman and Shane Wilkin (R) introduced legislation that would impose a 15 percent tax on intoxicating hemp products and limit their sales to adult-use dispensaries—not convenience stores, smoke shops or gas stations.
Wilkin, one of the sponsors who testified before the Senate General Government Committee, said that “currently, intoxicating products made from hemp are psychoactive, untested products. They can be as, or even more, intoxicating than marijuana.”
DeWine asked repeatedly for lawmakers to restrict or prohibit intoxicating products such as delta-8-THC.
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