Ohio will soon have a recreational marijuana program. And in the absence of legislation to move that program forward, a state official with a track record for overseeing the Division of Liquor Control is planning ahead.
Under Jim Canepa’s leadership of the liquor agency, gross liquor revenues grew from $970 million in 2017 to $1.8 billion last year. Canepa said he plans to use what he learned in that job to create an agency to satisfy Issue 2, the law voters approved in November allowing legal marijuana use for Ohioans over 21.
Medical marijuana has been legal in Ohio since 2016. The medical program will still exist under the new marijuana law but it will change, possibly allowing existing dispensaries to get “dual use” licenses to sell recreational marijuana too.
Canepa said he wants the new marijuana program to be professional, responsible and accountable. One of the first things on his to-do list, Canepa said, is to sit down with existing marijuana business leaders to create what he calls “a punch list.”
“Working with the people in the industry is key, absolutely key, because they are business people, they typically are very well engrained in the community. Many of them are business owners in other respects outside of cannabis. And they have very specific ideas about what the challenges and opportunities are,”Canepa said. “So, I would never, ever, enter a space, pretending like I had all of the answers.”
A fair playing field for medical and recreational pot
Ariane Kirkpatrick has been operating dispensaries under the state’s medical marijuana program as the CEO of Harvest of Ohio. She said she hopes Ohio will be a model for how to implement a legal marijuana program.
Kirkpatrick said she and other operators are looking at local ordinances, parking provisions, and drive-thru possibilities. She said Arizona has been doing both med and recreational marijuana in their stores and “they’ve made it work.”
Kirkpatrick said it will be critical is to make sure minority business owners, like herself, will have opportunities to be successful, especially when it comes to new startups where a lot of capital is needed. She said the part of the statute that deals with social equity is important, especially for minorities who have been disproportionately affected.
“In a field where we have been overcharged, we need to be over-compensated,” Kirkpatrick said.
Issue 1 directed revenues to a social equity and jobs program. A Republican-backed that passed the Senate puts most of the marijuana revenue toward jail construction grants and law enforcement training. There’s also funding for substance abuse treatment, the 988 suicide prevention hotline, a fund for the marijuana convictions expungement program, local drug task forces and safe driving programs. There’s been no movement on that bill in the House.
Canepa said he’ll be looking at three guiding principles as the new program rolls out: access, the effect the program has on the black market and ensuring there isn’t an overconcentration of dispensaries in the same area.
Gus Burns, a cannabis industry reporter from Michigan said when that state rolled out its recreational marijuana program after voters approved it in 2018, some smaller cities saw a boost from the income and jobs the stores generated. But some marijuana businesses didn’t do so well. Burns said there are 770 licenses for marijuana stores now, but 150 licenses have lapsed since legalization. Those numbers prompted an immediate reaction from Canepa.
“That’s a percentage to me that is not acceptable. If I had a 20% failure rate at liquor agencies, I would have been removed from my position,” Canepa said.
No “stoner culture”
Canepa said he wants the program to be structured in a way that marijuana operators must act professionally and responsibly. He said he seen marijuana operations in other states and described them as a combination of an urgent care facility and a Starbucks.
Canepa said he wants marijuana businesses to avoid the “toga” or “stoner” culture often popularized in movies. And he said he will use enforcement of his agency to strictly enforce the rule in the statute that prohibits marketing and sales to anyone under 21 years old.
“If diverting or appealing to children, whether it’s advertising, labeling, packaging, not following the under 21 sales rules, there is zero tolerance for that,” Canepa said.
Canepa said repeat offenders will risk losing their licenses, just as bars would if they sold alcohol to children.
Burns said Michigan has tried to eliminate “stoner culture” too by using cameras in stores. He added there haven’t been a lot of problems with marijuana businesses selling to kids there.
Training and testing for legal pot
Issue 2 calls for testing of marijuana products for THC levels and requires information about the products on packaging that is clearly marked. Canepa said those rules will be enforced. Kirkpatrick said the testing and labeling will ensure customers get a safe and quality product, setting it apart from the black market. Further, Kirkpatrick said staff at her facilities and others like it are highly trained and operate as ambassadors for the product, providing customers with answers to their questions.
Going forward
Gov. Mike DeWine has asked his fellow Republican state lawmakers to pass clear rules on the marijuana program. But they haven’t. Canepa said the statute lays out timelines for the program and if lawmakers are going to weigh in with rules, they need to do it now. Canepa said applications for permits should be available for existing medical marijuana dispensaries on June 7. On Sept. 7, the state would start those issuing permits. Since the legislature hasn’t passed legislation to enable that, Canepa said those dates will be put through an agency approval process.
“What would be tragic is as we are rounding third base and heading for home and meeting these timelines, the legislature jumps in then,” Canepa said.
Canepa, Kirkpatrick and Burns made their comments before the Columbus Metropolitan Club Wednesday.
