Marijuana legalization efforts in the United States took a hit yesterday, as Ohio voters resoundingly rejected a ballot initiative that would have legalized and taxed marijuana in the state. After the votes were tallied, 64 percent of Ohioans voted no to Issue 3, with just 36 percent of voters approving the measure.
Marijuana legalization is a contentious topic in and of itself, but there was additional controversy surrounding Issue 3 in the days and weeks leading up to the election, stemming from its creation of a “marijuana monopoly” within Ohio.
Issue 3 would have established just 10 marijuana farms in Ohio, all run by wealthy supporters of the legalization campaign. Authorizing only 10 growers/wholesalers would have created an industry monopoly in the state, although more than the 10 wholesalers would have been allowed to apply for licenses to manufacture and sell marijuana to the public.
The idea of a “marijuana monopoly” did not sit well with many people in Ohio, particularly state legislators.
In response to Issue 3, the Ohio General Assembly passed a joint resolution proposing its own constitutional amendment. Issue 2 prohibits individuals and organizations from proposing constitutional amendments that would create a monopoly, oligopoly or cartel, specify a tax rate, and confer licenses and other rights to certain individuals that would not be available to other people or agencies. Basically, Issue 2 is designed to invalidate measures like Issue 3.
Issue 2 passed by a slim margin, approximately 52 percent to 48 percent. Thus, even if voters had approved Issue 3, Issue 2 would have invalidated it.
ResponsibleOhio, the organization that sponsored Issue 3, released a statement after the election results were announced, stating that the legalization campaign “starts anew tomorrow” and that Ohio “needs the jobs and tax revenue that marijuana legalization will bring.” A budget estimate released in early October predicted that Ohio could have seen between $133 and $293.3 million in tax revenues after the legal marijuana system was fully up and running, more revenue than Colorado, which has seen almost two full years of legal marijuana sales, estimates its program to produce.
Colorado voters had to decide their own marijuana issue—not whether to legalize marijuana or not, but what to do with all of the extra tax revenue the industry generates.
Coloradoans voted on Proposition BB, which authorizes the state to keep marijuana revenues that exceed Taxpayer Bill of Rights (TABOR) projections. Voters approved the measure by a vote of 69 percent to 31 percent, and now the government can keep approximately $66.1 million in revenue generated by the marijuana industry. The funds will be divided as follows: $40 million will be used to fund school construction, $12 million will go to fund school, drug enforcement and other state programs, with the remaining $14.1 million being put into the state’s general fund to be allocated later. If Proposition BB had been rejected, the excess revenues would have been refunded to taxpayers.
Ohio’s Issue 3 was just the beginning of legalization efforts leading up to the 2016 election. Campaigns in at least 16 states have either gotten marijuana legalization initiatives certified for the 2016 ballot, or are working on collecting signatures in order to get an initiative certified. The 2016 election is going to be pivotal to legalization efforts across the U.S.
Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: What state do you think will legalize marijuana next?
With a free trial to Premier State Tax Library, practitioners have a single trusted resource that provides all of the tools and information they need to develop and implement the right tax strategies.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)