Struggling Marijuana Industry Eyes Ohio for a Much-Needed Boost

More Midwestern weed could help cannabis companies nationally 

(Bloomberg) — Ohio looks likely to vote on the legalization of recreational marijuana in November, in a move that could improve the legislative and financial prospects for the cannabis industry overall. 

On Aug. 3, a group called Regulate Marijuana Like Alcohol turned in a batch of signatures in efforts to meet the state’s requirements to put the measure to a vote this November. Given that marijuana stocks are still suffering after a lack of headway with national legalization, and they tend to surge even on mixed election results, the issue will be closely watched. It could turn Ohio into the 24th US state to legalize recreational use, even as federal law remains in limbo.

“There is a decent likelihood the initiative passes if it gets on the ballot this year,” predicted James Sandy, a lawyer in the Cleveland office of McGlinchey who works with the cannabis industry. Sandy said in an email exchange that Ohioans have become more comfortable with marijuana in the few years since medical pot was legalized, pointing to a recent poll that suggests almost 60% of voters would favor adult recreational use.

Read More: Midwestern Marijuana Users Could Boost Ailing Industry: The Dose

The ballot push shows how groups like the Marijuana Policy Project, which has supported campaigns to “regulate marijuana like alcohol” in Arizona, Maine and other states, are helping the industry to grow amid an array of impediments: Federal legislation like SAFE Banking (which aims to give better access to financial institutions) is stalled; the industry is challenged by competition from an ongoing illicit market; and there’s still no word from President Joe Biden’s review of the drug’s federal status as a “Schedule 1” substance with high potential for abuse and lack of safety for medical use.

“We’re looking forward to giving Ohio voters a chance to make their voices heard at the ballot this fall,” the group said in a statement.  Its website touts the potential for annual proceeds of $150 million or more for social equity and jobs programs, $150 million for communities that allow recreational marijuana dispensaries, and $104 million to research and treat substance abuse in the state.

Data on things like increased hospital visits for cannabis-related issues and drug-impaired driving suggest legalization isn’t all financial upside for states. But many Ohio voters appear eager to embrace the plan: Regulate Marijuana Like Alcohol’s Aug. 3 submission included 6,545 signatures, far more than the shortfall of 679 signatures from an earlier submission.

The state is expected to respond sometime in September on whether the measure qualifies.

With a population of almost 12 million, Ohio legalization could help the pot companies that sell in various states. A recent study by New Frontier Data, a cannabis analysis firm, also showed that Midwestern cannabis users tend to be heavy users.

Curaleaf Holdings Inc. Chief Executive Officer Matt Darin said on the company’s second-quarter earnings call last week that the company counts Ohio among potential state catalysts that will help it scale up its global business.

“Ohio is the first of a potential three-headed tipping point,” Todd Harrison, founding partner of cannabis investment fund CB1 Capital Management, said in a phone interview. Harrison sees potential votes in Florida and Pennsylvania as other chances for a turnaround. He also said he’s hopeful that since Democratic Ohio Senator Sherrod Brown is chairman of the Senate Banking Committee, legalization in the state could help the prospect of banking legislation at the national level.

Ohio’s overall Republican lean means legalization would have extra significance, said Geoffrey Lawrence, research director at the Reason Foundation, a group that promotes libertarian principles.

“Ohio is a pretty solidly red state in the Midwest; it represents a bridging of a partisan divide on the cannabis issue,” Lawrence said.

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