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Ohio’s city and township officials are frustrated that the state has yet to turn over tax revenues from the recreational marijuana program that voters approved in November 2023.
In a city budget hearing this week, Akron Finance Director Steve Fricker said that the city has recorded $1.25 million in marijuana tax revenues for the 2024 fiscal year, at the advice of the state auditor’s office. But no Ohio city, including Akron, has actually received any money yet.
“There’s been a lot of uncertainty whether that will come to fruition or not,” Fricker told Akron City Council.
Under the voter-approved marijuana law, Ohio assesses a special 10% tax on all marijuana sales. Of that, 36% is supposed to go to cities and townships that have opted to approve marijuana dispensariesin their jurisdictions. The rest of the tax on marijuana is supposed to go to a mix of social equity and jobs programs, substance abuse programs and regulatory costs.
Pete LuPiba, a spokesperson for Ohio’s Office of Budget and Management, said the state has yet to distribute the money to cities because lawmakers haven’t yet voted to do so. The state has collected more than $30 million in special marijuana sales taxes since August, according to state officials. They wouldn’t say how much each city is supposed to get, citing what they described as taxpayer confidentiality.
Cleveland officials estimated they’re supposed to get $410,000 in 2024 marijuana taxes. Austin Davis, a senior policy adviser to Mayor Justin Bibb, in an email pointed out that the law voters approved said the state “shall” collect the taxes and then distribute them to host cities.
But state lawmakers and Gov. Mike DeWine are debating whether to redirect the money. DeWine has proposed doubling the marijuana tax to 20% and using the money to pay for police training and jail projects. The Republican-controlled Senate proposed hiking the tax to 15% and redirecting all marijuana revenues to the state general operating fund, although they later took that language out of a marijuana bill they ended up passing.
Negotiations are ongoing and are expected to roll into the state budget bill, which is due at the end of June.
Kent Scarrett, executive director of the Ohio Municipal League, a trade group for the state’s villages and cities, told Signal Statewide the state has yet to set up a mechanism to distribute the tax revenue. And he said city officials are starting to feel burned.
Some communities agreed to host marijuana dispensaries only because of the promise of future tax revenues, he said.
“They wouldn’t have gotten into this business at all, and now the rules are changing in mid-stream,” Scarrett said.
“It’s a continuation of the concern our members have with the state partnering with [local governments] in good faith,” he added.
Akron Mayor Shammas Malik said in an interview the $1.25 million won’t make or break the city’s $790 million budget or change his view of the marijuana business. He said it has been a net positive for the city thanks to the multiple growing facilities that have opened within city limits and hired dozens of workers.
On Wednesday, the two Republican state legislative leaders seemed to sympathize with city officials. Senate President Rob McColley said his caucus favors ensuring that cities get the same amount of money they would have gotten under the voter-approved marijuana law. House Speaker Matt Huffman said he believes cities and townships will bear extra costs associated with having marijuana retailers in their jurisdiction.
“I think it’s difficult to change the rules in the middle of the game with local governments,” Huffman said.
Signal Cleveland reporter Nick Castele contributed to this story
“]] Cities that approved dispensaries were supposed to get millions in marijuana taxes. Gov. Mike DeWine has proposed sending the money elsewhere. Read More
