The Issues with Issue 3 – Legalization of Marijuana in Ohio

October 26, 2015

The Issues

Apeks Supercritical supports legalization of medical and recreational marijuana under a legal, competitive and non-burdensome regulatory construct. Apeks Supercritical OPPOSES Issue 3 for these reasons:

  • MGCE owners/plans are not transparent.
    • Without explanation, Responsible Ohio has refused to identify ALL owners and beneficiaries of the Marijuana Grow Cultivation and Extraction (MGCE) sites. The funders that have been identified have little to no experience or track record in the marijuana industry. This lack of transparency and experience will likely draw Federal scrutiny to Ohio for suspicion that cartels are receiving profits from the legal marijuana sales.
  • Not just a “small number of regulated grows” anymore.
    • At least 4 of the MGCE sites have announced they will allow up to 100 Artisan grows on the constitutionally protected MGCE sites which increases the licensing, regulation and enforcement burden for the Marijuana Control Commission (MCC) from 10 to 400. In addition, the last minute change to the constitutional amendment to allow Home Grows has the potential to increase regulatory licensing burden exponentially – if just 5% of Ohioan’s over 21 execute their constitutionally protected right to Home Grow there would be an additional 400,000 licenses to issue and enforce. Again, the large number of marijuana suppliers will likely draw Federal scrutiny to Ohio for suspicion of marijuana export across state lines.
  • Complete control of supply chain by MGCE owners will stifle entrepreneurial opportunities.
    • While the media tends to refer to the 10 MGCE sites as the “10 grow sites”, the constitutional amendment requires that all growing AND EXTRACTION takes place on those sites – thus the “E” in MGCE. Control of the raw plant material from the grows as well as the extracted oils give the MGCE’s complete control of the marijuana supply chain which limits the entrepreneurial opportunities to just post processing and dispensaries – the two least profitable activities of all legal marijuana commerce.
  • No limitations on vertical integration by MGCE owners will create a “monopoly tax”.
    • In addition to the owners of the 10 MGCE’s having complete control of the supply chain, there are no limitations on their ability to own/operate commerce areas outside of the MGCE’s. They can also be processors, dispensary owners, etc. which gives control of entire commerce chain – grow, process, sell – which is a true monopoly. Wholesale pricing will undoubtedly be more expensive for those processors and dispensary owners who are not part of the 10 MGCEs as they will be required to pay the “monopoly tax”.
  • Details for Federal compliance pushed to non existent Marijuana Control Commission after amendment is already passed.
    • Rather than building a marijuana regulatory body into an existing group like the Ohio Liquor Control Commission, the constitutional amendment creates and entirely new Marijuana Control Commission. The burden on a non-existent commission to form, develop and implement regulations, and enforce the new laws across more than 400,000 separate entities is an impossible task that will inevitably lead to an unorganized implementation that could garner Federal attention to Ohio for suspicion of marijuana export across state lines.
  • May 30 rollout deadline and lobbying pressure risks haphazard execution
    • The constitutional amendment states that the implementation of the program SHALL take place by May 30, 2016. The hard deadline and no way to modify the constitutional amendment will force a careless rollout that could garner Federal attention to Ohio for suspicion of marijuana export across state lines as well as allow marijuana to be distributed to children.
  • Straight to Recreational is untried and unproven
    • Going straight from illegal to recreational – which has never been accomplished by any legal state – adds a further level of complexity for the MCC to handle, and when coupled with the tight deadline for a non-existent commission to develop a complete implementation presents serious risks of Federal intervention. This intervention could halt the entire marijuana program in Ohio which would be a huge black eye for the entire marijuana movement.

90% of Ohioans support medical marijuana – there will be a better option in 2016. I strongly urge my fellow Ohioans to exercise patience and not allow a constitutional hijacking that will only benefit a handful of wealthy investors.