03-05-2025
Ariane Kirkpatrick spent years trying to survive Ohio's marijuana industry.
Kirkpatrick entered the cannabis space after Ohio legalized medical marijuana and set aside licenses for minority-owned businesses − a rule later deemed unconstitutional. The state disputed her role with her previous company, Harvest of Ohio. Then she faced a lawsuit from the company that bought Harvest.
"It was heart-wrenching for me to be a part of this industry – the racism, the intentionality of trying to keep me out of the business from all corners," said Kirkpatrick, now the CEO of Mavuno of Ohio.
Ohio's recreational marijuana law, approved by voters in 2023, attempted to level the playing field.
The statute allows people to apply for licenses through a social equity and jobs program that aims to right the wrongs of cannabis prohibition and support business owners who might otherwise struggle to break into the industry.
But state officials have allowed the social equity program to languish since the marijuana law took effect. The Department of Development, tasked with overseeing its implementation, made limited progress last year before halting work altogether, according to records obtained by the statehouse bureau. A spokesperson for the agency attributed the decision to a lack of funding.
Now, the program is in the crosshairs of Republicans who want to change the marijuana law − and Ohioans seeking new opportunities could be left in the lurch.
"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," said Lenny Berry, who founded the Ohio Cannabis Health and Business Summit and planned to apply for a license. "So why not help those people and also people who don't traditionally have the means to get capital?"
Ohio agency puts social equity program on hold
The voter-approved law, previously known as Issue 2, requires the Department of Development to provide loans, grants and other assistance to certain 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.
Get the Evening Update newsletter in your inbox.
Stay up-to-date with the latest news from around Columbus
Delivery: Daily
Your Email
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," said Tom Haren, an attorney who served as spokesperson for the Issue 2 campaign. "You try to remedy those errors where you can."
As of July last year, the Department of Development had drafted proposed rules for the social equity program and submitted them for legal review, according to memos obtained through a public records request. An application for licensees was "available when ready to go live." A draft statement for media outlets pledged to "conduct extensive outreach efforts" to interested applicants once rules were approved.
By September, records indicated the social equity program was on hold. The department took down a bare-bones website for the program late last year.
The inaction means uncertainty for potential applicants, including 44-year-old Alan Butts, of Columbus, who's rebuilding his life after nearly 20 years in prison.
A Franklin County judge overturned Butts' conviction, then dropped his case altogether, in the 2002 death of his girlfriend's 2-year-old son. Butts thought he found a path forward: He began growing marijuana at home and wants to turn his passion into a business venture. He invested time and money to prepare his application and partnered with Garrett Greenlee, whose company is helping people acquire Level III licenses for small cultivation facilities.
"I'm 44 years old," Butts said. "I don’t have a history of work or specific education for a specific trade. This is something I’m good at and enjoy doing, and who doesn’t want to get paid for something they like to do?"
Where's the money?
Butts' efforts could all be for nothing.
Department of Development spokesperson Mason Waldvogel said officials stopped their work 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.
Indeed, tax dollars from the recreational marijuana program are currently in limbo.
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 − also known as an appropriation − which means it can't leave the state treasury.
That means $36 million from adult-use marijuana sales is just sitting there. It doesn't have to be that way; the Legislature could have passed an appropriation at any time to get the money moving.
Instead, lawmakers are expected to allocate marijuana revenue in the next state budget, which Gov. Mike DeWine must sign by June 30. And their plan will look different than current law. Already, 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 Legislature's spending priorities are less clear, but one thing is certain: They don't include the social equity program. Republicans in the Ohio Senate passed legislation last week to eliminate it, along with licenses that allow participants to open dispensaries or small cultivation facilities.
'A huge policy failure'
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."
"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 said. "As a result, it was something that was going to be a revolving door of people who were going to come in and out of the industry."
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. Haren said Issue 2 was carefully worded to ensure the social equity program would survive constitutional scrutiny.
Still, advocates for the program believe the law could have included more guardrails to prevent the Legislature from dismantling it.
"Focusing on the folks who have been the hardest hit is the right thing to do and makes a lot of sense," said Jocelyn Rosnick, policy director for the American Civil Liberties Union of Ohio. "It would be a shame if that is the one provision of Issue 2 that fails to come into reality in the next year or two. That would be a huge policy failure."
Berry, who runs the cannabis summit, said he unsuccessfully applied for licenses under the medical program and realized it takes money and connections to navigate an industry dominated by national companies. He has other irons in the fire if he can't apply for a Level III license, but he believes Ohio is better off with the program in place.
Without it, backers say, the status quo remains.
"We will still be a state and a country that is lacking in empowering Black-owned businesses, Hispanic-owned businesses," Kirkpatrick said. "It would be a disservice. It's just not acceptable to me."
Comments