Ohio voters approve Issue 2: McDonald Hopkins' attorneys break down what businesses and municipalities need to know
Ohio’s Election Day is over and voters have spoken: Ohio is the 24th state to legalize recreational, or adult use, marijuana. But now that the polls have closed and the votes have been counted, the burning question is what’s next? McDonald Hopkins’ experienced attorneys walk us through what employers, municipalities, and community members should know when it comes to the passage of Issue 2.
Issue 2 would create an additional 10% tax at the point of recreational marijuana sales on top of regular sales tax to be divided among the new Division of Cannabis Control, governments where adult use dispensaries are located, the new social equity fund and the new addiction fund created by the law.
Currently, there are 107 medical marijuana dispensaries statewide, and each would be entitled to up to two adult-use dispensary licenses, plus 50 more to be issued. In total, there could be approximately 260 licenses distributed in the initial rollout of legalization in Ohio.
Kevin Washburn, the leader of McDonald Hopkins’ Cannabis and Psychedelics practice, said it takes a few years’ time to see a large impact on tax revenue.
“In the first year or two, don’t get too excited. It takes time to build up the infrastructure to really see it, but it does get to meaningful levels, or at least has, consistently, in legalized states. Michigan, for example, is now clipping around $325 million in adult-use cannabis-related taxes and it is distributing significant numbers. Michigan is currently in its fifth year of legal recreational use, so those are fourth-year numbers,” he said.
Washburn is a trusted advisor of cannabis clients, assisting in a broad range of matters associated with legalized marijuana.
What does this mean for your workplace?
Employers have a lot of questions about the passage of Issue 2, most notably, how does it impact the management of their employees?
Karina Conley, a member of McDonald Hopkins’ Labor and Employment Practice Group, said the answers are fairly black and white, as there’s a specific codified section in the statute outlining employer protections.
For example, Issue 2 does not prohibit employers from maintaining or establishing drug testing or drug-free workplace programs. The new law does not prohibit an employer from refusing to hire, disciplining, or discharging an employee who tests positive for marijuana. It also prevents employees from filing lawsuits against employers for failure to hire, discipline or termination related to cannabis use. Furthermore, employees fired because of cannabis use will be ineligible for unemployment benefits.
Additionally, Conley said that so long as marijuana remains illegal at the federal level, employers do not necessarily need to accommodate an employee’s usage under ADA, but cautioned that an employer should always consult with legal counsel on specific accommodation issues.
In analyzing how and if this would change Ohio’s Workers’ Compensation, Margaret O’ Bryon, who specializes in workers’ compensation law with McDonald Hopkins’ Labor and Employment Practice Group, said employers and employees can look to what the state currently has in place for medical marijuana to understand how recreational marijuana will likely be handled.
The Ohio Bureau of Workers’ Compensation does not allow payment for workers’ compensation for workplace injuries where a positive test for medical marijuana is tied to the cause of an injury. If an employer can prove the employee was under the influence of marijuana, similar to alcohol or other illicit drugs, at the time of the injury and it was the cause of the accident, then workers’ compensation would not be allowed,” said O’Bryon. “I’m not sure there’s going to be much of a change, at all, to workers’ comp, but the best way employers can protect themselves and their workers is to establish a drug-free workplace.”
Land use- can local governments opt out?
Kevin Butler, Counsel in McDonald Hopkins’ Public Law Practice Group, said a municipality or township can vote to limit the number of recreational cannabis operations, but there will be some limitations on what local governments can control.
“If a local government wishes to take action with respect to these uses, it ought to do so with separate zoning restrictions or business regulations. I would not rely on an existing code’s silence on marijuana to try to ban it. I would take affirmative action if a locality wishes to prohibit or limit the number of dispensaries within it,” he said. “One thing that won’t be allowed is additional fees imposed on adult use operators that aren’t imposed on other businesses in the same locality.”
Only time will tell true impact, but times are changing. We are here to help.
Ohio lawmakers can still make adjustments to the law and only time will tell what the true impact of Ohio’s legalization will be, but there are answers we can surmise right now. McDonald Hopkins’ team of experienced attorneys can help your business or municipality with any questions regarding that impact.
“Ohio’s vote to legalize the recreational use of cannabis is part of a continued shift in the social and legal landscape towards acceptance of recreational use of cannabis by adults. The newly enacted framework will present challenges for municipalities and companies in Ohio, and McDonald Hopkins is prepared to work with public and private entities to address those challenges,” said Washburn.
If you have any questions about how Issue 2 affects your company or municipality, contact a member of McDonald Hopkins' Cannabis and Psychedelics team. You can also find additional legislative updates by going to McDonald Hopkins' Legal Insights page.