A lot of confusion and misinformation still surrounds the Ohio Medical Marijuana Control Program, according to state and industry experts.
In March, the Columbus Chamber of Commerce hosted a panel discussion on the business benefits and challenges of Ohio’s medical marijuana law.
House Bill 523 authorized a basic framework — legalized medical marijuana for qualifying medical conditions, but prohibited its use by smoking or combustion — and made Ohio one of 28 states to establish a public medical marijuana program. But it left state agencies to establish specific rules and guidelines.
At this point, the Ohio Department of Commerce, State of Ohio Board of Pharmacy and State Medical Board of Ohio have written seven relevant rule sets. These rules —and all other pertinent information — can be found at medicalmarijuana.ohio.gov.
The rules will be finalized by Sept. 8. The state agencies have tried to be transparent and flexible with as much public input as possible, while keeping to strict deadlines, says Missy Craddock, policy staff member for the Office of Gov. John Kasich.
The MMCP likely won’t become operational until Sept. 8, 2018.
Ohio employers have some of the broadest protections in the country, says Michael Griffaton, of counsel at Vorys, Sater, Seymour and Pease LLP, who played an integral role in drafting the medical marijuana legislation.
An employer can refuse to hire, discharge, discipline or take adverse employment action for a person’s use, possession or distribution of medical marijuana. In addition, that person may not sue the employer for doing so.
But that doesn’t mean hiring managers should ask about medical marijuana during a job interview, Griffaton says. Disability discrimination is still illegal. If someone is using medical marijuana for cancer, it raises questions.
“Did he not hire them because they used medical marijuana or because it’s a disabling protected condition under the American Disabilities Act? Employers are going to open themselves up to discrimination charges and lawsuits, because of that question, so be careful about asking,” he says.
Griffaton also has seen cases where employers terminated people that used medical marijuana — and that ended up being only minority members of the workforce.
“Carefully consider whether or not taking adverse action against someone who uses medical marijuana could lead to other claims,” he says.
Employers need to apply their workforce policies clearly and consistently, especially if they operate in multiple jurisdictions that have different state laws, Griffaton says.
In Ohio, if someone’s termination violates the employer’s expressed policy regarding medical marijuana, that person isn’t eligible for unemployment compensation. Also, employers don’t have to pay for medical marijuana under workers’ compensation.
The state-issued licenses for cultivation, processing, laboratories and dispensaries will be tied to real estate.
“From a landlord’s perspective, you don’t want to be in a position where you’re leasing to, let’s say, a dispensary and all of the sudden they lose their license,” says Bret Kravitz, an associate at Dickinson Wright PLLC, who works with the firm’s corporate practice group and leads the firm’s cannabis working group.
Not only are you in violation of federal laws, you’re also now running afoul of the state laws — it’s a position you don’t want to be in, he says.
Entrepreneurs and investors
Entrepreneurs, investors and companies of all sizes see opportunities, but there are risks, too. Kravitz’s firm has received calls from soil, chemical and lighting companies, to name a few, asking for more information.
One of the biggest issues is the inability to find banks, even though Ohio’s law excludes banks from state criminal statutes.
Marijuana is an illegal federal substance, so it falls under the Bank Secrecy Act, which essentially is a money-laundering statute, Kravitz says.
“So you have banks that would like to get involved, in light of the opportunities there, but they still risk losing their federal charters,” he says.
Some credit unions and state-charted banks have taken on people connected to the industry, but they charge larger fees because of the additional reporting requirements.
The state also has met with vendors and individuals about setting up a “closed-loop” cashless payment system. Justin Hunt, COO of the MMCP at the Ohio Department of Commerce, says his team has gotten many questions and is doing its due diligence, but it doesn’t have a proposed solution yet.
Entrepreneurs who are unsure of a municipality’s reaction need to take the temperature now, and set up meetings with political leaders, Kravitz says.
Cultivators, processors, dispensaries or laboratories must be at least 500 feet from a school, church or public library, playground or park, but cities, villages and townships may adopt additional restrictions or opt out completely.
“Most of the clients I’ve talked to, the No. 1 thing they recommend in terms of consulting with and going through this process is getting a land use and zoning attorney onboard, day one,” he says.
That helps entrepreneurs identify regulations and whether an application will be regarded favorably.
Investors also need to carefully weigh the risks of getting involved with an industry in its infancy, where their identity could become public.
“The first step is knowing you could lose everything you put in,” Kravitz says.
Entrepreneurs are raising private money at relatively high rates because they cannot get bank loans. They also are in violation of the Controlled Substances Act.
“There’s no protection. You’re investing in a federally illegal business and for that risk, you anticipate some higher returns in your investment. You’re not protected just because Ohio has legalized medical marijuana,” he says.