Ohio Ready for Rec: Revised Code Updated to Include Adult Use Cannabis Control Chapter

On November 13, the Ohio Revised Code was updated to show Chapter 3780: Adult Use Cannabis Control. All of the provisions written into the language can be changed by Ohio legislators before December 7th*, when it becomes law if not amended.

*From the ORC: The Legislative Service Commission staff updates the Revised Code on an ongoing basis, as it completes its act review of enacted legislation. Updates may be slower during some times of the year, depending on the volume of enacted legislation.

ORC Chapter 3780: What Does the Law Currently Entail?

First, it is important to know that nothing in this law is set in stone. The Ohio Legislature has the ability to make changes to this law as they see fit. Additionally, nothing in the adult-use law limits anything within the medical cannabis program. Once finalized, the law will take effect on December 7, 2023.

The adult-use program will be regulated by the Division of Cannabis Control within the Ohio Department of Commerce. The Division, once established, will be required to set standards and procedures for the adult-use cannabis program. These standards and procedures include but are not limited to “reasonable standards” for samples and advertising, training requirements for industry employees, and standards for the packaging and labeling of products.

The Division of Cannabis Control shall issue dispensary, cultivation, processing, and testing licenses within 9 months of December 7, 2023

The new law currently establishes THC limits for plant material and extracts in the adult-use program. The THC limit on plant material “shall be no less than 35% THC”, and extracts “shall be no less than 90% THC”. These limits may be increased or eliminated by the Division of Cannabis Control.

Adults 21 years of age or older will be allowed to combust, or smoke, their cannabis plant material. Along with the forms and methods available in the Medical Marijuana Program, adult-use cannabis may also be sold as seeds, live plants, clones, suppositories, inhalers, oral pouches, and oral strips.

Home Grow Stipulations

Growing cannabis at home will also be allowed, under the following stipulations: 

1. “Cultivating, growing, and possessing not more than six cannabis plants at the individual’s primary residence;
2. Cultivation or growing of adult-use cannabis only takes place within a secured closet, room, greenhouse, or other enclosed area in or on the grounds of the residence that prevents access by individuals less than twenty-one years of age, and which is not visible by normal unaided vision from a public space.
3. Processing by manual or mechanical means adult-use cannabis cultivated or grown in accordance with this section; or
4. Transferring up to six cannabis plants to an adult-use consumer as long as the transfer is without remuneration and not advertised or promoted to the public.”

The adult-use law does NOT authorize an individual to:

1. “Cultivate, grow, or process adult-use cannabis except at the individual’s primary residence;
2. Permit individuals less than twenty-one years of age to use, cultivate, process, transfer, or transport adult-use cannabis;
3. Process adult-use cannabis by hydrocarbon-based extraction; or
4. Sell, or profit from, home-grown adult-use cannabis;
5. Operate a vehicle, motor vehicle, streetcar, trackless trolley, bike, watercraft, or aircraft while using adult-use cannabis or while under the influence of adult-use cannabis;
6. Smoking, vaporizing, or using any other combustible adult-use cannabis product while in a vehicle, motor vehicle, streetcar, trackless trolley, bike, watercraft, or aircraft;
7. Possess an amount of cannabis greater than the limits set.”

A landlord may prohibit adult-use conduct, so long as such prohibition is included in the applicable lease agreement. However, “An individual’s status as an adult use consumer shall not be used as the sole or primary basis for rejecting the individual as a tenant unless the rejection is required by federal law.”

Possession/purchasing limits have also been put into Chapter 3780 of the Ohio Revised Code. Possession of adult-use cannabis in any form, except for extract is limited to 2 ½ ounces. When it comes to adult-use extract, the possession limit is 15 grams. Consumer-allotted daily purchasing limits are the same as the possession limits.

Social Equity and Jobs

To work in the adult-use cannabis industry, you must be 21 years of age, be licensed, and be trained according to the rules and regulations in the law. The cannabis social equity and jobs program shall be established by the Division of Cannabis Control. This program aims to assist in the following:

1. “Individuals who have been arrested or incarcerated due to drug laws suffer long-lasting negative consequences, including impacts to employment, business ownership, housing, health, and long-term financial well-being.
2. Family members, especially children, and communities of those who have been arrested or incarcerated due to drug laws, suffer from emotional, psychological, and financial harms as a result of such arrests or incarcerations.
3. Certain communities have disproportionately suffered the harms of enforcement of marijuana-related laws. Those communities face greater difficulties accessing traditional banking systems and capital for establishing businesses.
4. Individuals who have resided in areas of high poverty suffer negative consequences, including barriers to entry into employment, business ownership, housing, health, and long-term financial well-being.
5. The promotion of business ownership and employment by individuals who have resided in areas of high poverty and high enforcement of marijuana-related laws furthers an equitable cannabis industry;
6. The program shall provide financial assistance and license application support to individuals most directly and adversely impacted by the enforcement of marijuana-related laws who are interested in starting or working in cannabis business entities.”

Taxation

Taxes on adult-use cannabis will be different from how taxes are applied to medical cannabis. 

“For the purpose of supporting social equity issues, providing funds to support jobs and economic development, providing funding for host communities who have adult-use dispensaries in their jurisdiction to support these communities, funding education and treatment for individuals with cannabis and other addiction issues, and defraying the costs of regulation and administering the tax, there shall be a 10% adult-use tax on the sale of adult-use cannabis by adult-use dispensaries to adult-use consumers.”

“The following funds are created in the state treasury:

1. “The adult-use tax fund;
2. The cannabis social equity and jobs fund;
3. The host community cannabis fund;
4. The substance abuse and addiction fund”

“The director of budget and management shall transfer amounts to each fund as follows:

1. 36% to the cannabis social equity and jobs fund;
2. 36% for the benefit of municipal corporations or townships that have adult-use dispensaries, and the municipal corporations or townships may use such funds for any approved purpose. Distributions to municipal corporations or townships shall be based on the percentage of adult use tax attributable to each municipal corporation or township;
3. 25% to the substance abuse and addiction fund to support the efforts of the Department of Mental Health and Addiction Services to alleviate substance and opiate abuse and related research in the state;
4. 3% to the Division of Cannabis Control and Tax Commissioner fund to support the operations of the Division of Cannabis Control and to defray the cost of the Department of Taxation for administering the tax levied.”

Dispensary, Cultivation, Processing, and Testing Licenses 

The Division of Cannabis Control shall issue the following licenses within 9 months of December 7, 2023:

1. A dispensary that has a Medical Marijuana certificate of operation or Medical Marijuana Provisional license shall be given an adult-use license for the current location of the dispensary.
2. Level I cultivators under the Medical Marijuana program with a Certificate of Operation or provisional license shall be given 3 adult-use dispensary licenses for the locations in their application, as well as 1 dispensary at the current location of the cultivation site.
3. Level II cultivators under the Medical Marijuana program with a Certificate of Operation or provisional license shall be given 1 adult-use dispensary license for the locations in their application, as well as 1 dispensary at the current location of the cultivation site.
4. Dispensaries with a Certificate of Operation or provisional license that are NOT vertically integrated will be given 1 adult-use dispensary license at a different location if they do not have common ownership or control with any cultivator or processor licensee or applicant.

Social Equity and Jobs Program Licenses

The Division of Cannabis Control will give out 50 additional dispensary licenses to applicants who have been certified under the cannabis social equity and jobs program. Twenty-four months after the first adult-use license is issued, the Division of Cannabis Control will have to review the number of operators every other year and can authorize additional licenses.

The Division of Cannabis Control will give up to 40 level III adult-use cultivator licenses with preference to those who are in the cannabis social equity and jobs program created by this new law. No one person can have ownership/control over more than one level III facility. 

Current Medical Marijuana processors with a Certificate of Operation or provisional license shall be given one adult-use processor license for their current location.

Current testing labs with a Certificate of Operation shall be given one adult-use testing license for their current location. 

The Division of Cannabis Control is tasked with creating the rule for how many licenses a license holder may have for each type of license. As of December 7, 2023, no person shall have more than 8 adult-use dispensary licenses, no more than one adult-use cultivation license, and no more than one adult-use processing license, unless otherwise approved by the Division of Cannabis Control. The Division of Cannabis Control may authorize additional adult use testing laboratory licenses at any time.

Employment

“An individual who is discharged from employment because of that individual’s use of cannabis shall be considered to have been discharged for just cause  if the individual’s use of cannabis was in violation of an employer’s drug-free workplace policy, zero-tolerance policy, or other formal program or policy regulating the use of cannabis.”

This law does NOT:

1. “Require an employer to permit or accommodate an employee’s use, possession, or distribution of adult-use cannabis;
2. Prohibit an employer from establishing and enforcing a drug testing policy, drug-free workplace policy, or zero-tolerance drug policy;
3. Prohibit an employer from refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action against an individual with respect to hiring, tenure, terms, conditions, or privileges of employment because of that individual’s use, possession, or distribution of cannabis;
4. Affect the authority of the administrator of workers’ compensation to grant rebates or discounts on premium rates to employers that participate in a drug-free workplace program.”

Child Custody,  Public Benefits, and Medical Care

 “Unless there is clear and convincing evidence that a child is unsafe, the use, possession, or administration of adult-use cannabis in accordance with this chapter shall not be the sole or primary basis for any of the following:

1. An adjudication determining that a child is an abused, neglected, or dependent child;
2. An allocation of parental rights and responsibilities
3. A parenting time order

“The use or possession of adult-use cannabis shall not be used as a reason for disqualifying an individual from medical care or from including an individual on a transplant waiting list.”

“The use or possession of adult-use cannabis shall not be used as a reason for disqualifying an individual from a public benefit program administered by any state or local authority, or for otherwise denying an individual a public benefit administered by the state or any locality.”

DUI/Civil Arrest/Penalty

“When an adult-use consumer engages in activities related to adult-use cannabis, such activities alone do not constitute a sufficient basis for conducting a field sobriety test on the individual or for suspending the individual’s driver’s license. To conduct any field sobriety test, a law enforcement officer must have an independent, factual basis giving reasonable suspicion that the individual is operating a vehicle under the influence of adult-use cannabis or with a prohibited concentration of marijuana in the person’s whole blood, blood serum, plasma, breath, or urine.”

“An adult use consumer shall not be subject to arrest, criminal prosecution, or civil penalty for engaging in any of the following activities:

1. Obtaining, using, possessing, or transporting adult-use cannabis;
2. Acquiring, possessing, using, purchasing, manufacturing, selling, or transporting paraphernalia; and
3. Assisting another adult use consumer, or allowing the property to be used, in any of the acts authorized by this law”

To Review, This law does NOT:

1.  “Permit the use, cultivation, dispensing, or processing of adult-use cannabis on federal, state, or locally owned land located in the state of Ohio
2. Require any public place to accommodate an individual’s use of adult-use cannabis;
3. Prohibit any public place from accommodating an individual’s use of adult-use cannabis;
4. Restrict research related to cannabis at a state university, academic medical center, or private research and development organization as part of a research protocol approved by an institutional review board or equivalent entity;
5. Require an employer to permit or accommodate an employee’s use, possession, or distribution of adult-use cannabis;
6. Prohibit an employer from establishing and enforcing a drug testing policy, drug-free workplace policy, or zero-tolerance drug policy;
7. Prohibit an employer from refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action against an individual with respect to hiring, tenure, terms, conditions, or privileges of employment because of that individual’s use, possession, or distribution of cannabis;
8. Affect the authority of the administrator of workers’ compensation to grant rebates or discounts on premium rates to employers that participate in a drug-free workplace program.”

Chapter 3780 Goes Into Effect Dec. 7th, If Not Amended

Remember that the Ohio legislature still has the authority to make changes to this law before it comes into effect. Also, some rules and regulations will not be set until the Division of Cannabis Control is created and staffed.

Ohio Revised Code Chapter 3780 is due to take effect on December 7, 2023. Some GOP legislators have stated publicly they want to make changes to the law before that date. For instance, Rep. Cindy Abrams introduced a bill last week that would change the details of the law to put $40 million in cannabis tax dollars toward law enforcement training annually.

Advocates who want the details of the law to stay the way they voted for them need to contact their legislators before December 7th to make their voices heard. Our previous article last week details how Ohioans can notify their senators and representatives that they support the cannabis law as written.

To read the entire Chapter 3708 of the Ohio Revised Code, go to: https://codes.ohio.gov/ohio-revised-code/chapter-3780

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