Unprecedented controversy shrouds Issue 3

COLUMBUS, Ohio — The controversy surrounding Issue 3 goes beyond legalizing marijuana. In fact, state rep. Mike Curtin (D-Marble Cliff) believes the measure is unprecedented in state annals.

“It’s a detailed business plan for 10 landowners and their financial backers to corner the market on the commodity — and it just so happens to be marijuana,” said Curtin, who retired in 2007 as associate publisher of the Columbus Dispatch. “I’m in the fight because putting a business plan in the constitution is utterly wrong.”

Curtin is not alone in his assessment.

In September, State Auditor Dave Yost called the amendment constitutional monkey business. Senator Larry Obhof (R) said it will cause a lot of issues for small business owners if passed. Gov. John Kasich also opposes it, according to a Cincinnati Enquirer story published in August.

The National Federation of International Business took a stance against the amendment, stating small business owners in Ohio see the amendment as an oligopoly.

“Free enterprise minded folks don’t see it as a positive,” said NFIB Communication Director Andy Patterson.

Even local public officials are taking formal stances against issue 3.

Richland County Commissioner Marilyn John said the issue is not about medical marijuana.

“This legislation is about money. And it’s not about money in the state of Ohio,” John said.

Mansfield City Council passed a non-binding resolution on Tuesday, Oct. 20 to officially oppose issue 3. The Richland Area Chamber of Commerce opposes the issue as well, according to an email sent to its 1,000 members. See the PDF on the side bar to read it.

Make no mistake, however, the measure has its supporters, too.

Despite the vocal critics, there are a number of proponents to the ballot measure, including 20 known investors that make up the 10 growing facilities, according to Ballotpedia.

ResponsibleOhio, the firm boosting this measure, has the support of former public officials, including former Ohio Senate Minority Leader Eric Kearney and former Cincinnati Police Chief Tom Streicher.

According to an article published by ResponsibleOhio on July 1, 2015, Kearney said, “The issue of marijuana legalization is one all Ohioans should take seriously. As a former legislator, I know that our state government is not ready to act on this important issue. Ohioans are being unjustly punished for using marijuana, while patients do not have access to medical marijuana for treatment. It’s time we reform this failed prohibition, and I’m proud to be part of the effort to do so.”

Other supporters include the United Food and Commercial Workers Union local posts 75, 880 and 1059 and the American Civil Liberties Union of Ohio.

Statewide, the issue is tight heading into next week’s election.

As of Oct. 26, polls conducted by Bowling Green University show 44 percent of respondents support the measure and 43 percent oppose it. Thirteen percent of respondents are undecided.

A separate poll conducted by the University of Akron shows 46 percent oppose issue 3 and 46 percent support it.

So why does this amendment that claims it will create thousands of jobs and pour millions of dollars into local economies rub so many people the wrong way? And how does ResponsibleOhio respond?

What is the truth?

“First and foremost, it is certainly a plan to create a constitutionally protected monopoly,” said Curtin.

The Ohio Marijuana Legalization Initiative’s amendment language states that “there shall be only 10 Marijuana Growth, Cultivation and Extraction (MGCE) facilities …” It then lists the 10 properties that have been sanctioned, including acreage in Butler, Clermont, Franklin, Hamilton, Licking, Lorain, Lucas, Delaware, Stark and Summit counties.

ResponsibleOhio spokesperson Faith Oltman denies the initiative creates a monopoly.

“No, it’s not (a monopoly). The 10 grow sites will be competing against each other across the state. It’s a strict and well-regulated industry,” Oltman said. “And the state has the power to add more grow sites over time.”

She referenced two paragraphs in the amendment which outline the Marijuana Control Commission’s rights to “ensure that the supply of regulated marijuana is adequate to meet consumer demand in this state …”

If Issue 3 passes, the MCC will be comprised of seven commissioners appointed by the governor. Those appointed will serve four-year terms and include “a licensed Ohio physician, a sworn Ohio law enforcement officer, an Ohio-based patient advocate, an Ohio resident and business owner, a licensed Ohio attorney, an Ohio resident with experience in the marijuana industry and a public member.”

Grow Sites

If the MCC finds the facilities are not growing enough marijuana for Ohio’s demand, or if the MCC finds the facility is not following the law, the commission can add an additional Marijuana Growth Cultivation and Extraction facility at a site not previously designated.

“After doing extensive research, we found that this is the safest and best way to legalize marijuana,” Oltman said. “It’s a responsibly regulated system. It’s not going to be Wild West of weed.”

She also noted Ohio lawmakers have had marijuana legislation before them for 18 years.

“There’s been one bill every general election since 1997,” said Oltman. “Lawmakers have ignored that legislation. There are no other proposals out there.”

She also cited a Quinnipiac poll released earlier this month that shows 90 percent of Ohio voters favor legalizing medical marijuana. And 53 percent are in favor of legalizing recreational pot.

Critics vehemently disagree that ResponsibleOhio’s way is the best way.

Yost said ResponsibleOhio’s amendment would pave the way for other business owners to form similar monopolies and oligopolies for commodities.

“There’s no limiting principle here to allow anyone with an imagination to come up with a monopoly. Imagine if the United States Constitution had a provision in it that said, ‘only Thomas Jefferson and George Washington could grow tobacco.’ It would have never gotten ratified,” Yost said at a Richland Area Chamber of Commerce “Eggs and Issues” breakfast in September.

He reminded the audience of what he termed “the casino monopoly,” which was created in 2009 and passed in 2012. The man behind that political feat, said Yost, is the same man behind Issue 3: Ian James.

The man behind the issue

James, 49, has a bachelor’s degree in political science from Ohio University. He’s been involved in eight state and local ballot measures in Ohio and now owns The Strategy Network, a Columbus political consultancy firm that specializes in ballot measures like Issue 3.

James does not shy away from defining what he does as running a business — a lucrative one.

“What we’re doing in changing the constitution to legalize marijuana will lead to more than 10,000 people working in the state, billions of dollars being generated in new revenue. That money is also going to flow into local communities. But no one creates an industry of that magnitude without being paid for it,” James stated in a Center for Public Integrity article published June 18, 2015.

Issue 3 has been in the works for a few years. In its early stages, James pulled together investors willing to chip in an initial $20 million investment, an additional $20 million for purchasing the land and another $300 million to build the MGCE facilities.

Still, Curtin cautions voters, “I urge everyone to read the prospectus.”

The 50-page prospectus defines “success through what we provide contributors after a successful ballot initiative.”

The process of creating amendments that support lucrative, constitutionally protected business ventures is available and legal in 24 states, including Ohio, thanks to the initiated constitutional amendment process.

Ohio’s constitution added a provision for this process first in 1912, according to Curtin.

The money

ResponsibleOhio claims that if Issue 3 passes, Ohio will reap approximately $554 million in yearly tax revenue from the sale of the crop.

In Richland County, that amounts to $4.9 million, said Oltman.

According to the prospectus, James estimates “$1+ billion” in marijuana sales every year.

The amendment states Ohio will collect a 15 percent flat tax from all growing facilities and marijuana product manufacturing facilities. Additionally, the state will collect a 5-percent flat tax rate from all retail marijuana stores.

In total, Ohio will reap 20 percent in taxes from the marijuana industry, which amounts to $200 million based on $1 billion in sales, according to James. Of that 20 percent, 55 percent will go to Ohio’s 938 cities on a per-capita basis.

Thirty percent will then be shared among Ohio’s 88 counties, again on a per-capita basis.

Finally, the commission will receive 15 percent of the $200 million, which would be $30 million.

The remaining 80 percent ($800 million) of the revenue will be for the 10 growing facilities, retail stores and marijuana product manufacturing facilities.

“Think of this like any other business,” said Oltman. “Just like any other business, they’re taxed and then they pay for expenses, healthcare overhead, stuff like that. And then there’s profit as well.”

ResponsibleOhio stitched together an economic model for the marijuana industry and had it verified by Burke, Rosen and Associates, a Cleveland economic analysis firm. To read the projection, click on the PDF toward the top of the article.

On the other hand, Executive Director of Community Action for Capable Youth Tracee Anderson disagrees with the notion that marijuana tax revenue will be lucrative for the state.

“I think you’re going to lose more money in the treatment side of it. Because right now people go into treatment for marijuana issues. So if you increase the supply, it will undoubtedly increase the need for treatment,” said Anderson in a January article.

What to do

“This is extraordinarily complex,” Curtin said, acknowledging contradictory information available to voters.

“(The amendment) is 10 percent as long as the constitution itself. It’s unprecedented for Ohio,” he added. Ohio’s constitution is around 65,000 words. ResponsibleOhio’s amendment is 6,500.

Curtin urged voters to read the amendment and the prospectus in their entirety before casting a vote on Tuesday.

Issue 2

Curtin also urged voters to cast a yes ballot on Issue 2. He is also a spokesman for that measure.

Issue 2 was put together by Ohio lawmakers, including Obhof and Yost, essentially to put a stop to Ohio commodity monopoly formations. To read its language, click the PDF toward the top of this article.

“Issue 2 would make it much more difficult, it wouldn’t prevent, for people to use the initiative process for the purpose of creating a monopoly, an oligopoly, a cartel to give themselves a special economic benefit or preferential tax rate,” Obhof said during a Regional Manufacturing Coalition meeting in Mansfield earlier this month.

Obhof said if both Issue 2 and 3 passed, the Supreme Court would likely then decide how to proceed as a state. He said investors of the marijuana industry would likely contest the issue in court.

“Trying to prognosticate how the Supreme Court is going to rule on things is not a great way to stay in business,” Obhof said.