Elyria finally gets its cut of marijuana tax revenue

Ohioans heading into a marijuana dispensary to score some legal recreational pot probably weren't thinking much about what was happening with the excise taxes they were paying. The same can't be said for local government officials in communities, including Elyria, that host those dispensaries. That's because those communities weren't getting the excise-tax revenue that they were supposed to receive under a citizen-initiated statute legalizing recreational marijuana that voters approved in 2023. In Elyria's case, it was a handsome sum — $373,984.38 over the first 16 months of recreational marijuana sales — which the state has only now deigned to distribute. "Evidently, business is good," Elyria Finance Director Ted Pileski said Monday after informing City Council that the city would finally be getting its money. He also said that based on prior sales, he expected Elyria would receive roughly $23,000 per month from the excise tax going forward. That might not seem like a huge amount, but it will add up over time and ease a little of the city's fiscal pressure. Recreational marijuana went on sale in Ohio in August 2024, so Elyria, which hosts two dispensaries that sell medical and recreational marijuana, should have been getting that money all along. The 16-month delay was unacceptable, especially because the law legalizing recreational marijuana, approved by about 57 percent of voters, made clear that 36 percent of the proceeds from the 10 percent excise tax was supposed to go to host communities. Another 36 percent of the proceeds was supposed to go to a social equity and jobs program, while another 25 percent was supposed to support substance-abuse services. The remaining 3 percent was supposed to go to cover administrative costs. Columbus Republicans were not fans of that breakdown, especially the social equity and jobs program, and started trying to tweak the law almost as soon as voters approved it. In the meantime, the state refused to disburse the excise-tax revenue. State Rep. Joe Miller, D-Amherst, told our reporter Owen MacMillan that the Republicans who run Columbus refused even to say how much excise-tax money had been collected. (The Ohio Capitol Journal reported that more than $1 billion worth of recreational marijuana has been sold in Ohio since it became legal.) Miller joined his fellow Democrats in opposing a change to the state's recreational marijuana law that state lawmakers passed and Republican Gov. Mike DeWine signed into law last year. (Because legalization was done through a citizen-initiated statute, rather than an amendment to the Ohio Constitution, state lawmakers had the authority to tinker with it.) "We were correct that they were not going to live up to the spirit and the intent of the initiative, because they are holding back two-thirds of the tax money to backfill the gap from giving tax cuts to the rich in Ohio," Miller said. "Once again, Columbus believes they know what is best for Ohioans." Under the new law, 36 percent of the excise-tax revenue will still go to host communities. The rest will go into the state's general fund. The law also reduced the allowable potency of marijuana and outlawed intoxicating hemp products, which existed in a legal gray area thanks to a since-rescinded quirk of federal law. It also banned Ohioans from bringing in marijuana they legally purchased in other states and required marijuana to be transported in vehicle trunks, among other changes. As we've noted before, voters didn't appear to be clamoring for such tweaks, which is part of the reason why Ohioans for Cannabis Choice is trying to get a referendum on the November ballot. If that effort is successful, voters could repeal the changes lawmakers made. Dennis Willard, a spokesman for the group, called the new law "government overreach" and warned that the banning of intoxicating hemp products would cause businesses to close and workers to lose their jobs. (We'd note that the new law isn't entirely bad. It created a mechanism for those with old, low-level marijuana convictions to have their records expunged.) Whether a referendum would be successful is another story. Although the changes could indeed cause problems for some people, the new law largely leaves intact Ohioans' legal right to buy and use recreational marijuana. We suspect that most voters were focused on legalizing recreational marijuana in 2023, as opposed to nuances such as where the excise-tax receipts would go. Critics of the referendum effort have argued that much of the opposition to the changes lawmakers made is focused on intoxicating hemp products, which weren't part of what voters approved in 2023. It's a fair criticism, but if Republican lawmakers were concerned with what voters wanted, they wouldn't have been so eager to make changes. They also wouldn't have made Elyria and other host communities wait for more than a year to get the money they were due.