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More at OHEA.org The leaders in the race for governor talk taxes and affordability and intoxicating.

Hemp is banned in Ohio, and there are new rules on marijuana.

Well, go through them.

And what they mean this week in the state of Ohio?

Welcome to the state of Ohio.

I'm Karen Kasler.

Affordability is already showing itself as the key issue in the upcoming race for governor, and the leading candidates from the two major political parties are pushing forward their plans on it.

After weeks of talking in vague terms about her ideas on policies to help Ohioans with rising costs, Democratic gubernatorial candidate Doctor Amy Acton unveiled a long list of proposals this week.

It includes tax credits of up to $1,000 a year per child, a refundable tax credit for lower income families, an online prescription drug platform, relief of medical debt, the return of energy efficiency programs caught in House.

Bill six, crackdowns on wage theft, scams against the elderly and extra charges on tickets and apps, and cost and regulatory guardrails on data centers.

Act and said, quote, we pay for other things like that, but others choose to pay for it.

This is what I'll be choosing.

We've got to live within our means, but I think it's.

And what you choose, just like you do in your household budget, are the choices we all have to make the hard choices.

I just think it's a matter of having public servants again who fight to make life affordable for everyday Ohioans and high quality of life, and that in turn actually grows the economy.

Instead of some of the reckless policies I'm hearing about.

Republicans have been blasting act as proposals, setting up a website that claims her ideas would add $21 billion in spending.

A spokesperson for Republican candidate the Fake Rama Swami said Acton's liberal agenda would mean higher taxes and bigger government.

Ramaswamy has long talked about eliminating the income tax, and he went from saying he wanted to zero out property taxes when he launched his campaign last year to rolling back property taxes to pre-pandemic levels.

Ramaswamy says that will help grow Ohio's population to 15 million, which he says will mean increased sales tax revenue.

That would also be an increase of about 26% in population, a higher percentage of growth than any other state, including others that don't have income taxes, such as Florida and Texas.

Acton and other Democrats have said Ramaswamy is out of touch with the affordability concerns of Ohioans, and that his plans will blow a $10 billion hole in the budget with the loss of income tax revenue and forced dramatic cuts to schools and local services.

New rules on recreational marijuana, which was legalized by Ohio voters in 2023, have been in place since March 20th, as well as a ban on so-called intoxicating hemp.

That's a synthetic cannabinoid also known as delta eight THC, among other names and formulations, and was unregulated until Senate Bill 56.

So it was available in edibles, drinks and other products at gas stations, vape shops and other places.

The Ohio Department of Commerce manages marijuana through its Division of Cannabis Control, which licenses from seed to sale growers, product producers and sellers, and manages the six labs that do all the testing for contaminants and potency.

Jim Canepa is the superintendent of the Division of Cannabis Control.

what 56 largely did was ban intoxicating hemp, with regard to what it did or didn't do with the, cannabis, regulations or industry.

Is it touched on where you can use it, you know, public consumption and how you can move it around from your house, your car dispensary.

And so, again, largely, what the initiated statute was approved in, you know, voter referendum, is intact, with the legislature refining where you can use it, how you can move it.

Now, some other things were added like which I think are good, which are, you can't add non marijuana things to cannabis.

You know, you can't put stuff in it to help you sleep.

You can't put stuff in it that helps you wake you up.

You can't put vitamins in it.

You can't put stuff in it.

And say that it's, you know, morning formula or nighttime formula.

Or, you know, so that's that's always funny to me because, you know, the, the initiated statute was marijuana like alcohol.

Well, there is no Budweiser morning formula or Jack Daniels, nighttime formula, you know?

So, that was a good that was a good ad addition.

And so there was a lot of confusion, I think, because the intoxicating hemp folks were trying to conflate the idea that the voters voted for THC marijuana products.

And so their campaign largely focused on.

See, they're changing what you voted for.

Well, no, no, they didn't.

Nobody voted for gas station, intoxicating hemp.

I want to ask you about THC beverages, which has been a big part of this discussion.

They become popular even as alcohol consumption has gone down.

There was an effort by some, and continuing effort by some breweries and other businesses to try to change that and bring back the carve out that governor Mike DeWine vetoed in Senate Bill 56.

There's also a federal ban on those THC beverages coming down the road.

Are they sold anywhere in Ohio?

No, they should not be.

The ban went into effect on March 20th.

And so, you know, the intoxicating hemp, whether it was in a gummy form or a flower form or in a drink form, were all banned under 56.

And so, yes, it is true that, a lot of those products, were proliferating through, bars and drive thrus and convenience stores and whatnot, but, they were banned effective March 20th, and they should not be out there now.

What I will tell you is the, marijuana, cannabis drinks that are, you know, grown in Ohio put into turn into a beverage in Ohio and sold in retail stores are still available, but they're in dispensaries.

We've all heard governor DeWine talk about the accessibility of intoxicating hemp, but the dangers that came with it because it was unregulated, how prevalent was it?

I mean, as Senate Bill 56 already done what it intended to do in terms of dealing with this accessibility and the danger of it?

It was it proliferated, like dandelion weeds in, in the springtime.

I mean, it took hold, and became a thing and it, it, it became such a thing that the locals, local police, local government, mayors, city council, police chiefs, sheriffs were calling me, frequently to say a dispensary just opened up near a school or they're selling, gummies, near a playground.

And I would be like, well, those aren't dispensaries.

Those are vape shops, or those are gas stations or those are.

So it became really confusing, to the locals.

It became really sort of, confusing to consumers as well because, they were being marketed as dispensaries and the neon signs in front said dispensaries, and they were and they weren't making, those distinctions between licensed cannabis industry by, by the state or unlicensed, intoxicating hemp.

In fact, it was very beneficial to conflate the two.

I mean, from a marketing perspective, the ones purveying and selling wanted to be perceived as a dispensary.

And marketed themselves as dispensaries.

And so the difficulty of that is confusion, to consumers who believe that it was tested and that it's in child resistant packaging that the labels and the and the marketing wasn't geared towards children, which it was, or perhaps that it was lower dose and somehow seen as safer.

Well, that's the sort of ironic part of it is, you know, on Public Square, they would argue that it was low dose and this and that.

But to the people walking down the street, it was just as potent as the dispensaries or more potent than the dispensaries, because the other confusion is, the difference, the fundamental difference between the two is what we regulate in the state is naturally occurring THC in a plant, and with all the dangers that comes with it, the overconsumption, the, the children getting a hold of it, it's finding it's diverting out of a licensed facility onto the street, all of those risks that come with, intoxicating substances.

And the difference is with, with hemp, it's synthetically created.

So it's not naturally occurring hemp.

It by its nature is supposed to be inert, but there was no market for the rope, the clothes, the plastics, which was the farm bill loophole to help farmers.

So at the end of the day, there was no market for it, but somebody figured out how to add, acid, which is the same acid in battery acid in car batteries, and heating it to change the molecular structure of the plant to create a synthetic high, with no, way to oversee the potency, which could be extremely high.

In some instances, you know, hundreds of milligrams, 500mg in a, a gummy rope or, you know, drinks, which, you know, unregulated milligrams in a drink.

People would think I can drink this whole thing and then not be able to, you know, find their way home.

So there was a lot of confusion.

It, it it really conflated the two things.

And, and the real tragedy of it all was from a law enforcement perspective where, you know, the regular paradigm in the world was marijuana.

Schedule one drug, illegal to possess, illegal to sell, illegal to transport, dangerous to children.

They knew what to do.

They knew what to do when it became legalized in Ohio again, there was a whether they're for it or against it.

It's pretty linear.

It's in these licensed facilities.

And currently there are 210 dispensaries.

There's a map on the website.

We know where they are.

And those are were the only places.

Well, now tens of thousands of places are popping up calling themselves dispensaries.

The tragedy was that the law enforcement, because of those nuanced scientific distinctions between a synthetic THC flower gummy joint and a naturally occurring gummy flower or joint, they they basically threw up their hands because it would require scientific testing.

And there's not enough labs to to do all the, the enforcement that they could do.

So they proliferated even more.

Making it worse was it was the perfect Trojan horse facade for a lot of these places to be selling actual marijuana, you know?

So a lot of these places that were breaking the law, well, it was well, nobody, nobody can tell the difference, you know, and so actual marijuana being sold.

And then there's a category of just placebos.

It's like they're not selling marijuana.

They're not selling intoxicating hemp.

God knows what is in it that is causing the intoxication.

And so that was a huge a in my mind, you know, exploitation of a loophole to the to the, detriment of people who were relying on it when it was wasn't what they said.

It was people who were taking it without any, notion of whether there were contaminants in it.

I mean, hemp grows outside and like, your garden vegetables or like your crops, they get pesticides sprayed on them, herbicide sprayed on them, fertilizers which come with salmonella and mold and heavy metals.

And so a consumer wouldn't know whether they were ingesting those sorts of things.

And then the ones who think that they're actually getting because they're being sold some health benefit, some placebo and not getting anything.

So it was really just an awful state of affairs.

It's been described as the Wild West in a way.

Right?

Right.

But instead of, you know, bullets, it was, you know, harmful drugs with no age getting, for children, you could literally ride up on your bike and buy a package of something called, you know, Stoney Oats or Skittles and bring it to your friends, bring it into school, you know, and just the under-aged notion of it is bad enough, but then all of the other dangers that I was talking about, Senate bill, Senate Bill 56, also, as you mentioned, change some rules.

Made some new rules on marijuana where you can smoke it, how you can store it, how you can transport it, and from where, it banned smoking in public.

It says that it has to be in its packaging and also that you can't bring it in from another state.

Now, there's it's no secret that a lot of people go to Michigan and buy marijuana products up there.

You can't do that anymore.

You never could.

So it's not a new concept.

It was just codified.

You know, it still is a, a controlled substance at the federal level.

And while states, you know, I'm going to go on my, like, lawyer trip here for a second while states, have been regulating it, for either medical or recreational use, it's not recognized nationally.

So taking a controlled substance over state lines has always been a crime.

And so, you know, codifying what has always been the law really didn't change anything.

But I think with, with fair notice, that it is an enforceable crime.

this year, the state passed a 1 billion mark in sales of recreational marijuana, 1.2 billion as of last month.

The average price for marijuana products in Ohio is still significantly higher than what it is in Michigan or Pennsylvania, which is the only two neighboring states that have legalized marijuana for recreational use.

Why is that?

Why have our having our prices come down?

So, I love this question.

Because it it's such an example of confusion about, what it what cannabis is, in terms of a retail, product that's being sold on the marketplace.

And, alcohol or liquor, there's, there's a confusion between those two things, and there's also confusion between how different states operate.

And so all of those things are put together make for this big confusion about that result.

In the statement, why doesn't the Division of Cannabis Control do something about the prices of cannabis?

Well, it's an interesting question, an ironic question.

When we live in a free market, supply demand, economic, marketplace.

So, we do not control the price of the retail products.

It's based on supply and demand, cost of transportation, cost of manufacturing, cost of construction, cost of all the things that go into making this the cost of testing, you know, and that's the, you know, ironic nuance as relative to intoxicating hemp, you know, the pricing of intoxicating hemp was really cheap, you know, product for product, really cheap.

Why?

Because they didn't.

Testing for contaminants is really expensive.

Putting it in child resistant packaging cost more, not marketing to children.

Your demographic isn't as easy to sell to.

And so all of those things add to the price.

But at the end of the day, these are private businesses with with private owners who own their products, make their products, grow their products, and price their products.

And so they determine the price based on the outcome, the economics.

Now, at the beginning of the the program, when it transitioned from medical to, adult use, obviously the demand went like this right on a, on a bar chart.

And the supply at that time was like this.

So it was supplying medical, customers in that demand.

But as soon as adult use took hold, that consumer base increased.

And so supply low, demand high.

That's you know, whether you're Keynesian or Smith economics, you can demand a higher price or why is it higher than Michigan?

Well, for those reasons, we're closed loop.

We don't get supply from California.

We don't get supply from Michigan.

We grow it, process it, sell it in Ohio.

So that supply is what it is until it ramps up and it has ramped up.

And so the prices have, come down significantly.

But with regard to Michigan, it's a totally different model, which contributes, unfortunately to low prices and it's not because it's a happy story.

It's a bad story.

They have no caps on licensing.

And so it is, cannibalizing each other because of the number of dispensaries available.

I believe there's about a thousand dispensaries in Michigan, and it's also a 25% bankruptcy failure rate.

So in order to stay solvent in Michigan, you are you're you're, competing on price with thousands of other dispensaries, and the prices are coming down and coming down and coming down to below the cost of making the product out.

What happens then to to subsidize those costs?

They're cutting corners.

And that is why there is hemp being substituted in that market.

The, testing in that market is suffering, as well as the bankruptcy rate.

And so you, you're seeing closed up, boarded up shops everywhere and, you know, questionable, products and quality and testing.

And so that's not where we want to be.

And so when people point to Michigan as a price, I'm like, you get what you pay for them, you get what you pay for.

Last month, there was a discussion about Senate Bill 56 hosted by Ohio State's Drug Enforcement policy Center and an executive with one of the craft breweries who is trying to bring back the THC beverages, said, we need to get to a point where we are not looking at this like a drug anymore.

This is a health and wellness product.

That's not how the state views this.

It is an intoxicating product.

On the on the adult use side, the it was an intoxicating product that was passed by the voters as a, something to consume for enjoyment.

You know, you can look back at history, at all of the products that people, originally promoted as healthful.

It tracks well with cigarets.

Cigarets were healthy to smoke.

That was the advertising, you know.

They're not, alcohol.

You know, people were lining up at pharmacies because it was medicine.

And so, you know, that's the classic snake oil salesman pitch.

It cures all ills, you know, in the cannabis program, we specifically prohibit health claims outside of the recognized, health benefits by the medical board, you know, for nausea, for cancer, and for those, there's a whole list of conditions that there's a list of conditions that are specifically recognized, but we specifically prohibit advertising.

Morning formula, focus formula, nighttime formula.

Make your brown eyes blue.

I mean, make you taller.

And so, like, all of those things, are prohibited for a reason because they're not provable.

They're not dis provable.

And so in the unregulated market, this is what they have, traded on, an unprovable or provable there's been very few studies.

I mean, even in the naturally occurring THC in cannabis, there's not a whole lot of research.

It's more and more and more.

But in the synthetics, which is what intoxicating hemp is, there's there's little to none.

And I would also point out that, in the, the, the, the synthetic, you know, I drink market, go back to what the loophole was for.

The loophole was for farmers to help farmers, you know, God love, the folks, who are talking about the the drinks, but that hemp is coming from Kentucky and West Virginia and Oklahoma and overseas.

And so it's helping somebody, but it's not helping Ohio farmers.

And they take that stuff and they get it distilled somewhere else like Chicago.

So by the time it reaches, a brewery to put in a drink, it has, it has stopped a lot of places and originated in a lot of places, none of which were Ohio.

The end result is manufactured in Ohio, but the original intent that has been bastardized and exploited is a farm bill loophole that was meant to help farmers.

Last month, there was a temporary block on Senate Bill 56 issued by a judge in Fremont in Sandusky County.

Canepa says he can't talk about that while litigation is pending.

And that is it for this week for my colleagues at the Statehouse News Bureau of Ohio Public Media.

Thanks for watching.

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Support for the Statehouse News Bureau comes from the law offices of Porter, Wright, Morris and Arthur LLP.

Porter Wright is dedicated to bringing inspired legal outcomes to the Ohio business community.

More at Porter Wright.com.

Porter Wright.

inspired every day.

And from the Ohio education Association, representing 120,000 educators who are united in their mission to create the excellent public schools every child deserves.

More at OHEA.org