Tuesday, Mar 28, 2017
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Ohio considers steps in marijuana growing

Exclusive state rights for medical use at issue

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REYNOLDSBURG, Ohio — Should Ohioans have the exclusive right to get in on the ground floor of the state’s newly legal industry of growing marijuana for medical use?

Would many of those same would-be Ohio entrepreneurs be locked out of that new market by exorbitant up-front costs and annual fees?

Those coming from multiple sides of such issues weighed in Monday before a state hearing officer on the first set of rules that will be finalized for Ohio’s medical marijuana program.

The Joint Committee on Agency Rule Review, a bipartisan panel of five state representatives and five senators, will meet at a later date to serve as the last set of eyes to review the rules before they become official by the May 6 deadline.

“Can you believe we’re talking about pot? At a public hearing? It’s legal,” Columbus agricultural attorney David Cox said as he noted that rules are being finalized for a market that is still an unknown commodity in Ohio.

Josiah Matthews plans to submit an application for a yet-to-be-determined growing facility outside Lima, and he’s counting on the rules requiring, at least for a while, that those owning and running such operations be from Ohio.

“We need to take another look at the residency requirement to make sure owners are central to Ohio and are not outside businesses,” he told the hearing officer. “At least 51 percent ownership should be from Ohio. ... It forces companies from outside to partner with people with families in Ohio and who live here.”

He’s been exploring a partnership with a company that has submitted a license in Pennsylvania’s fledgling market.

Jason Kabbes, an Ohio State University graduate who moved to Portland, Ore., to be part of Oregon’s new marijuana industry, doesn’t want to be locked out of Ohio’s new market.

“The day I saw that it was coming to Ohio, I called my parents and said, ‘I’ll be back in couple years,’ ” he said.

The Department of Commerce is writing between the lines of the Ohio law passed last year that legalized marijuana for medical use only, and set out a broad framework under which the program would work.

The Ohio Pharmacy Board and State Medical Board are also working on separate sets of rules that will come later.

The law forbids smoking or home-growing of medical cannabis products. At least initially, the product could be used only in oil, edible, patch, tincture, plant matter, or vapor form that would be sold through a dispensary that purchases Ohio-only products.

It would be limited for use only for patients suffering from a list of nearly two dozen diseases and conditions spelled out in the law — patients who must first receive recommendations from doctors who have yet to receive licenses for this part of their practice.

Some witnesses argued that application fees for a growing operation and annual license renewal are too high and would almost guarantee that only large businesses could participate.

The rules require larger facilities to pay a one-time application fee of $20,000, a first-year $180,000 license fee, and $200,000 annual renewal fees thereafter. Smaller facilities would pay a $2,000 application fee, an initial $18,000 licensing fee, and then $20,000 annual renewal fees.

The rules provide for a total of 24 cultivating licenses to be running before Sept. 8, 2018: 12 larger facilities with up to 25,000 square feet of growing space, and 12 smaller sites with up to 3,000 square feet.

Unlike a broader referendum that failed at the polls two years ago for medical, recreational, and commercial marijuana, neither the law nor the rules spell out specific locations for the indoor cultivation sites. That would come later as potential investors go through the licensing process.

More facilities could be licensed and existing facilities could seek approval to expand after that date if the commerce department determines existing capacity can’t meet demand.

Several spoke Monday in favor of allowing smoking and home-growing, but prohibitions on both are etched in law and not a subject before JCARR.

“Where’s the compassion?” veteran Robert Helwagen asked the hearing officer. “We hear all about footage and out-of-state investors. Where’s the regulation that would allow myself and dysfunctional veterans to grow a small amount of medicine? ... This is for people who have issues that medical marijuana can correct and alleviate. I myself have seizures, and I’ve used it for years before it was legal and without taking seizure medication.”

The rules for marijuana growing facilities are the first in line, given they must generate the product that will feed processors and retail dispensaries. Rules for processors, testing laboratories, dispensaries, and physicians must in place by Sept. 8 of this year.

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.

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