CLEVELAND – A hazy cloud hangs over Ohio’s distribution of tax revenue from recreational marijuana sales.
The state intends to retain more than $10.8 million in funds owed to municipalities under recreational marijuana law.
According to Governor Mike DeWine’s office, the funds will most likely not be provided due to a legal language issue that was left out of Issue 2.
“Issue 2 as passed did not appropriate any funds to cities,” press secretary Dan Tierney said in an email.
“We understand the frustration of being told this by those who drafted Issue 2 and coming to find out Issue 2 did not contain appropriations of funds the drafters promised any government entity.”
Cannabis is taxed at 10% in Ohio, with 36% of tax revenue going to municipalities that opted in to allow dispensaries under the framework of Issue 2.
Since its legalization, more than $30 million in tax revenue has been generated through February, with $10.8 million expected to go to municipalities.
The city of Cleveland believes it should receive $410,000 in 2024, based on rough estimates from the city’s six dispensaries.
There are 128 dispensaries throughout Ohio.
DeWine intends to reappropriate this tax revenue in the Fiscal Year 2026 Operating Budget, redirecting it to combat the negative effects of drug use.
“The governor’s proposal uses these funds to help improve local jails, fund the 988 behavioral health crisis hotline, provide law enforcement training and other priorities,” according to Tierney. “The state funding these priorities will free up local funds for other purposes and local priorities.”
