Ohio’s DEI-marijuana initiative has languished since voters approved the recreational marijuana law in 2023, and Republicans want to axe it altogether.
Republicans in the Ohio Senate passed legislation last week to eliminate the Diversity, Equity, and Inclusion social equity program, along with licenses that allow participants to open dispensaries or small cultivation facilities, The Columbus Dispatch reports.
As the Legislature grapples with spending priorities, tax dollars from the recreational marijuana program are currently in limbo — waiting to be spent.
Ohio's voter-approved marijuana law, previously known as Issue 2, directed revenue to the social equity fund, substance use services, municipalities that host dispensaries, and administrative costs. Drafters of the statute didn't include specific language for spending the money, which means it can't leave the state treasury.
But state officials have yet to roll out the social equity program and now it’s on the chopping block. Senate President Rob McColley, R-Napoleon, said the program was designed to fail from the start and accused the Issue 2 campaign of using it to “distract from the fact that they were giving themselves an oligopoly.”
Department of Development spokesperson Mason Waldvogel told The Dispatch that officials stopped their work on the social equity program because Issue 2 didn’t tell the state how to spend marijuana revenue.
"With the introduction of recent legislation that proposes to eliminate the program — and no proposed legislation to make an appropriation for the program — Development will continue to monitor legislative developments before proceeding further," Waldvogel said.
The $36 million from adult-use marijuana sales is just sitting there because the Legislature hasn’t passed an appropriation to get the money moving. It’s also effectively stalled the social equity and jobs program launch that supports small, diverse marijuana businesses.
Instead, lawmakers are expected to allocate marijuana revenue in the next state budget, which Gov. Mike DeWine must sign by June 30. And they have different plans for the money.
DeWine has pitched a tax increase on marijuana and wants to use the money on law enforcement training, jail construction and driver's education, among other services, The Columbus Dispatch reports.
The social equity program was designed to level the playing field and right the wrongs of marijuana laws that disproportionately affected Black and minority groups, along with providing a pathway for business owners who might otherwise struggle to break into the industry.
The Department of Development, the agency responsible for implementing the program, made limited progress last year before halting work altogether, according to records obtained by The Dispatch’s statehouse bureau. The department took down a bare-bones website for the program late last year.
If implemented as the statute intended, the agency would provide loans, grants and other assistance to specified business owners who want to enter the cannabis industry. Qualifying applicants include people who were disenfranchised by marijuana prohibition or marginalized based on race, gender and economic status, The Dispatch reports.
Republicans want to change the marijuana law, effectively eliminating the DEI component of the law. McColley said it was something that was going to be a revolving door of people who were going to come in and out of the industry.
"They're only giving small pieces of the industry to a group of licensees that will not be able to participate with the scale and the same types of advantages that the larger players in the industry would be able to have," McColley told The Columbus Dispatch.
Tom Haren, an attorney who served as spokesperson for the Issue 2 campaign, said Issue 2 was carefully worded to ensure the social equity program would survive constitutional scrutiny.
Issue 2 allows up to 50 dispensaries and 40 Level III cultivation licenses for social equity applicants, but their grow areas can't be as large as other cultivators. The statute also doesn't require regulators to launch the program by a certain date.
The program is also supposed to carry out research on criminal justice reform and the social and economic impact of marijuana enforcement. Issue 2 designated 36% of adult-use marijuana revenue to make the program happen.
“We know — the data's been pretty clear — that throughout the country and in Ohio, marijuana laws were enforced disproportionately against communities of color and more economically disadvantaged people," Haren told The Dispatch.
Advocates argue dismantling the program would be a "huge policy failure" and perpetuate inequities in the marijuana industry.
“There’s a lot of minority groups ... who have been unjustly accused or imprisoned for things right now that people are making a lot of money from,” Lenny Berry, who founded the Ohio Cannabis Health and Business Summit and planned to apply for a license, told The Columbus Dispatch. “So why not help those people and also people who don't traditionally have the means to get capital?”
