Legal Issues, States, Ohio

ResponsibleOhio’s Issue 3: Love It or Hate It?

Children, meet Buddie, your new furry little friend. Seriously?
Children, meet Buddie, your new furry little friend. Seriously?

The emotions have been running high around proposed Issue 3 in Ohio which is being promoted by ResponsibleOhio. As has been reported ad nauseam, this constitutional amendment would create the first state-sanctioned alleged marijuana cartel in the United States. The initiative gives only ten groups in Ohio (the groups financially supporting the initiative) the exclusive ability to cultivate and process all marijuana for the state pretty much indefinitely. Here’s our list of what to consider when trying to decide whether you love or hate this controversial initiative proposal:

  1. Issue 3 legalizes both recreational and medical marijuana. Issue 3 would make legal limited amounts of marijuana for both recreational and medical marijuana use. Legalization in a Midwest swing state would be a big boon to the legalization movement as a whole. Keith Stroup over at NORML wrote a blog post as to why, regardless of who’s directly funding and benefiting from the initiative, NORML will likely support Issue 3 because any state legalization contributes to the chipping away of federal prohibition. Other industry experts and stakeholders caution however that “legalization at any cost” is not a sound policy where such laws may not be easily changed and unintended consequences will abound. The fact that this is a constitutional amendment does make it difficult to change, meaning that Ohio might be stuck with a marijuana oligopoly for a long long time. Is legalization of both medical and recreational all in one shot worth the risk posed by putting almost all power in the hands of a few?
  2. Only a certain wealthy few will benefit if Issue 3 passes. Many are troubled with giving only ten well-funded groups a lock over Ohio’ cannabis cultivation and processing. Cleveland.com wrote an editorial strongly opposing Issue 3 arguing that this self-created “cartel” had purchased a piece of Ohio’s constitution. On the other hand, isn’t this already happening on a smaller scale in other states with “robust” marijuana regulations? Our cannabis business lawyers have handled legal matters in a number of these states (Illinois, Florida, New York, and Minnesota spring immediately to mind) and we would be the first to admit that the average person had and has virtually no shot of obtaining a coveted marijuana license from those states. New York is limited to only five operators. Minnesota allows only two. Florida allows only a select group of plant nurseries. In all four of these states, the money required to get started in the cannabis industry is well beyond the reach of the average small businessperson. Cartels are already forming in other marijuana-legal states; Issue 3 just makes its cartel known from the get-go.
  3. Exclusivity may skew the market and will hurt consumers. When pricing power and production is put into the hands of a few, open competition usually goes out the window. Where is the incentive to provide a variety of great products? Why bother with great service? We worry that patients and customers will suffer a lack of product variety and competitive prices, and the illegal market will continue to thrive. Exclusivity and crazy barriers to entry only increase consumer costs and limit the desired shift from illegal to lawful marijuana use.
  4. (On the other hand) The grows will be large and the costs are supposed to be low. Critics of the initiative have said that it doesn’t effectively address public health concerns regarding abuse and over consumption. Some complain that Issue 3 will encourage increased cannabis use and that the grows are large enough to cultivate more than Ohio will actually need, and that the measure “imposes a low, rigid tax on pot that will enable low prices.” To be fair to ResponsibleOhio, this issue of balancing production with demand while keeping the public’s health in the forefront is an issue for every state contemplating legalization and, as we’ve written before, there is no “gold standard” formula yet.
  5. ResponsibleOhio has done some questionable things in support of this initiative. ResponsibleOhio is bringing a challenge against the state’s Ballot Board for its description of the initiative that voters will see on voting day. In its description, the Ballot Board is essentially telling voters that Measure 3 would set up a marijuana monopoly. ResponsibleOhio alleges that the Ballot Board’s language “is clearly biased and gives preference to the arguments of marijuana reform opponents. Though no state body should craft a ballot initiative description with a political slant, to quote Jacob Sullum, “Issue 3 does set up a monopoly—or, to be more precise, a legally enforced oligopoly. This cannabis cultivation cartel, which consists of Issue 3’s main financial supporters, is highly controversial even among supporters of legalization, and rightly so. That is not the fault of the Ohio Ballot Board, although its Republican members clearly thought playing up that aspect of the initiative would help turn voters against it.”  ResponsibleOhio’s choice of a mascot, “Buddie,” inappropriately appeals to young children (it reeks of Joe Camel) and shows a stunning lack of savvy.
  6. The opposition to Issue 3 isn’t your typical “anti-marijuana” crowd. When law enforcement, D.A.R.E. (and organizations like it), or stodgy politicians oppose legalization, we are not surprised. We have come to expect anti-legalization rhetoric from this crowd that is often typically based on neither science nor logic. But with Issue 3 many diehard activists, business people, and respectable experts are saying “no” or “we’re not so sure about this.” So far, the tally of folks questioning or all-out condemning Issue 3 includes Ethan Nadelmann, Ohio’s Green Party, the Ohio Chamber of Commerce, random Twitter hackers, and the state’s own legislature, which has put together its own Anti-Issue 3 constitutional amendment, HJR 4, that will square off against Issue 3 this fall. No one really knows what will happen (other than litigation) if both Issue 3 and HJR 4 pass.

Of one thing we are certain: November is going to be an exciting time for Ohio.

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