SB 56 holds Ohio’s cannabis industry hostage

In 2023, Ohioans voted to legalize adult-use cannabis, anticipating economic growth, job creation and increased tax revenue. However, on Feb. 26, the Ohio Senate passed Senate Bill 56 (SB 56), a measure that threatens to undermine this potential by imposing restrictive regulations that could stifle the burgeoning industry.

The bill now moves to the Ohio House of Representatives and, if approved, will head to Gov. Mike DeWine’s desk for final approval.

Rather than addressing real concerns, SB 56 serves as a ransom note to Ohio’s cannabis industry—politicians are fully aware of the economic promise of adult-use cannabis, yet they are using unnecessary regulations and excessive taxation to hold that promise hostage.

Ohio’s cannabis market: Billion-dollar industry in jeopardy

Economic projections for Ohio’s adult-use cannabis market are substantial. BDSA, a cannabis market intelligence firm, estimates that combined medical and adult-use sales in Ohio could reach $1.65 billion by 2027. Industry analysts suggest the market could eventually grow to $4 billion, aligning with per capita sales in Midwestern states like Michigan.

However, SB 56 introduces major obstacles to this growth by imposing unnecessary restrictions, including:

• Increasing the cannabis excise tax from 10 percent to 15 percent, making Ohio’s tax structure one of the highest in the midwest.

• Reducing the number of home-grown plants from 12 to six.

• Placing limits on THC concentration in legal cannabis products.

• Eliminating the social equity program, which was designed to reinvest tax revenue into communities most impacted by past cannabis prohibition.
  
  These changes not only disregard voter intent but also create a hostile business environment that will drive consumers to other states. Looking at other midwestern states provides insight into what Ohio stands to lose if SB 56 is enacted.

Michigan, with a population of 10 million, legalized adult-use cannabis in 2019 and has since collected over $1 billion in tax revenue. Cannabis tax revenue supports schools, roads and local governments, demonstrating the tangible benefits of a well-regulated market.

Missouri, with a population of 6.2 million, generated $1.4 billion in cannabis sales within two years of legalization—outpacing many states with older programs.

Ohio’s population is 11.8 million, meaning its cannabis market could be even larger. However, SB 56’s strict marketing rules, high taxes and excessive regulations will make Ohio’s cannabis more expensive than in midwestern states, like Michigan and Missouri. This will only push consumers to Michigan, where cannabis is cheaper and more accessible.

SB 56 is a solution in search of a problem

Supporters of SB 56 claim that additional regulations are needed to prevent societal harm. However, there is no evidence that adult-use cannabis legalization has caused a negative societal impact in Ohio or other states. In fact, research from multiple studies, including those sponsored by the National Institute on Drug Abuse (NIDA) and the Journal of the American Medical Association (JAMA), shows that:

• Youth cannabis consumption has not increased in states where cannabis is legal. Studies show that teenage cannabis use has either remained the same or declined post-legalization.

• Arrests for cannabis-related offenses have decreased significantly, allowing law enforcement to focus on more serious crimes.

• Cannabis legalization has not led to an increase in violent crime, contradicting claims from opponents of legalization.

Despite this scientific evidence, Ohio lawmakers continue to push the same outdated “Reefer Madness” rhetoric, painting cannabis as a public health threat while ignoring the well-documented dangers of alcohol, which kills thousands of children and young adults every year through alcohol poisoning, impaired driving and related accidents.

Conclusion: SB 56 must be stopped

The Ohio Senate’s passage of SB 56 last month represents a blatant attempt to undermine the will of the voters and weaken the state’s economic potential. The bill now moves to the Ohio House of Representatives, where lawmakers have the opportunity to reject this misguided legislation. If it passes the House, DeWine will have to decide whether to support Ohio’s economic future or cave to baseless fear mongering.

Ohio has the chance to create one of the strongest cannabis markets in the midwest, but SB 56 threatens to send consumers and tax revenue elsewhere.

Lawmakers must vote against this bill to protect Ohio’s cannabis industry, honor the will of the voters, and ensure that Ohio does not fall behind while other states thrive.