Weed The People: The Money, Influence & Turmoil Behind Issue 3

Staff Writer
Columbus Alive

With just weeks to go before Ohioans vote on Issue 3, a ballot measure that would legalize marijuana by constitutional amendment, the hottest debate seems to be less about whether legalization is good or bad in principle, but whether Issue 3 is the right or wrong way to go about changing the law. As with all things political, the answer depends on who's talking.

"I love pot, and I always have."

The problem for the decade-long marijuana dealer (for obvious reasons, he's asked to remain anonymous), is that currently, his work is illegal.

"[I've] been that guy going from coast to coast, white knuckling it, doing the speed limit," he says, "But I can't do that now. I have my family. I have too much to lose."

Despite that, he plans on voting against legalization next month.

That's not stopping ResponsibleOhio-a group of more than 20 investors led by professional campaigner Ian James-who with direct mail, television and radio commercials, a mascot named Buddie and a plan to canvass 600,000 homes across the state, are taking the lead to make marijuana legal in Ohio, a change that could yield $554 million annually for the state and a whole chunk of change for investors.

Of the three paths to legalization-a change in federal law and policy, state legislation or a voter-driven ballot initiative-most marijuana advocates agree that the first two are unlikely to happen soon.

The quickest way to weed the people of Ohio requires a We The People, in the form of a vote.

ResponsibleOhio's proposed legislation, which will appear as Issue 3 statewide on the Nov. 3 general election ballot, is marketed by its advocates as a safe and responsible way to end marijuana prohibition. It allows for 1,159 precinct-approved retail marijuana dispensaries (with restrictions similar to those of state liquor agencies) and proposes a set of nonprofit medical marijuana dispensaries designed to provide sliding-scale pricing for low-income patients with written prescriptions. All marijuana and marijuana-infused products would originate on 10 plots of private land, specified by county in the constitutional amendment. Fees and some tax revenue would pay for regulation, a nonprofit medical marijuana program, treatment and addiction services, and a governor-appointed seven-member Ohio Marijuana Control Commission (OMCC). The remaining 85 percent of tax revenue would go to local governments, which could spend the money on public safety, infrastructure repair and economic development.

The legislation also allows home growers to have four flowering plants (with a $50 license) and carry an additional 8 ounces of marijuana, and makes it legal to consume, purchase, possess, transport, use and share, so long as everyone involved is 21 or older.

James and his team began planning this initiative in January 2014. Given James' role in passing the 2009 ballot issue that instituted a casino monopoly, a hijacked Twitter account (anti-Issue 3 organizers took over the @responsibleohio handle when James' team switched to @yesonthree), accusations of monopoly, and an unlikely alliance among marijuana enthusiasts and prohibitionists, the road to potential legalization has faced potholes. The opposition has the Green Party, the Libertarian Party, and a whole lot of elected officials on their side. ResponsibleOhio? They've got 98 Degrees singer Nick Lachey, the American Civil Liberties Union and more than $20 million dollars for campaigning.

Meanwhile, a movement to reject Issue 3 and instead wait for a free-market initiative is gaining momentum with the leadership of Sri Kavuru, co-founder of Legalize Ohio 2016. Among Kavuru's ideas: legalizing hemp, setting the marijuana growing and consumption age to 21, and placing no limit on the number of marijuana-based businesses.

Legitimacy requires regulation, and Ohio is no stranger to complicated rules. Take the state's three-tiered alcohol system, for example. Watershed Distillery cannot sell directly to retailers. Instead, they sell to the state, which allocates and prices (through a 14-step process) the inventory. The U.S. Department of Agriculture handles ingredients and labeling, while state agencies check cleanliness of his facility and handle distribution.

Prior to 2012, Watershed's ability to sell bottles in its distillery was-like marijuana sales would be under Issue 3-tied to location. The state allowed only one microdistillery per county with more than 800,000 inhabitants. "That's Cincinnati, Columbus, and Cleveland," says Greg Lehman, a Watershed co-owner. "I have no idea why people thought it was a good idea.

"From my perspective it would be hard to start a new industry and expect that [safety standards] are going to be in place. [If Issue 3 passes], there's no support from the federal government. The state would have to lead the charge from start to finish," Lehman says. He was undecided on how he'd vote on Issue 3 at the time of our interview.

Lehman's uncertainty is common. Both a yes vote and a no vote carry legal and moral consequences. Many of those in favor of Issue 3 say it will bring relief to people whose lives are currently affected (positively and negatively) by marijuana. Those against the measure are wary of changing the constitution to allow a limited number of people to profit off of a new industry.

In a time of a free-range chicken in every pot, where-and how-our consumables are grown is important. Under Issue 3, the new pot landscape of Ohio wouldn't be one of family farmers lovingly tending plants in backyard sheds with grow lights. Instead, think full-scale monoculture, cultivated in 10 county-specific, $10 million year-round indoor facilities, each employing 300 workers. That part is the sticking point for a lot of people-many of whom support marijuana legalization on principle.

The Ohio Libertarian party views the industry created by Issue 3 as a deep-pocketed oligopoly that will decide what products will be available, and how much consumers will pay for them, and as such they believe future reforms (namely, adding growing locations) will face an extremely well-funded opposition.

Responsible Ohio counters by saying the industry will be limited to 10 growing locations for only four years, and the Ohio Marijuana Control Commission created by passage of the measure will be required to develop annual consumer-demand metrics, which could lead to creation of a license for an additional facility.

Kavuru is skeptical of that. "Sure, they can add one more location. But do you think that 'Ohio Legislature Adds More Marijuana Farmers' is going to make the headlines? All they have to do to show that they're meeting market demand is say they have an oversupply."

Lissa Satori is an advocate for patient access to medical marijuana and an entrepreneur who hopes to operate her own store with the passing of Issue 3. "I think that people got to '10 grow facilities' and stopped reading and stopped thinking. What folks have not thought about is this: these are not 10 grow licenses. These are ten plots of land for cultivating for commercial purposes."

Issue 3 critics also take umbrage with the fact that none of the grow locations are in Athens or Meigs counties.

"We said [to our investors], 'Find a location with ample land, access to utilities, water, sewer and lots of electricity where you can grow year-round, indoors,' " James says. "While the land was good in Athens County, the access to utilities was difficult."

While James believes a controlled legal market would smother the black market with lower prices, opponents of Issue 3 believe that illegally grown marijuana will be for sale no matter what. Our anonymous dealer-who says he sources marijuana in California, where the market is flooded with product-expects to continue selling illegally, losing maybe 10 percent in sales if the issue passes.

"So much marijuana is being grown in California that they're not being able to keep up with what's being grown," says James of the state's lax regulations (which have also created a gray area for police, who can't distinguish the origins of any cannabis they encounter). The dealer, however, plans to undercut prices in legal stores and sell in areas where customers can't easily reach retail operations. He suggests that his margins will be more flexible than the state of Ohio, which will be reluctant to part with the money it'll make. "Colorado is a great example," he says. "The government is making so much money [off of high margins]."

The motivations behind Issue 3 are not purely economic.

Ohio decriminalized marijuana in 1978, making possession of up to 100 grams punishable by fine, but not prison time. As a result, only 954 people are in prison in Ohio for marijuana offenses, mainly for trafficking. But punishment isn't limited to fines, according to the ACLU. The American Bar Association found 300 collateral consequences for possession in Ohio, including driver's license suspension, loss of federal financial aid, and suspension or revocation of licenses for professionals like teachers and plumbers.

The ACLU reports that black Ohioans are arrested for marijuana related offenses at four times the rate of white Ohioans. Christine Link, executive director of ACLU of Ohio explains, "In the '70s, Nixon declared the war on drugs, and it's honestly been a war on black people ever since. Whatever mental health or medical issues are related to the use of the spectrum of drugs need to be considered medical issues, not criminal issues. Mass incarceration numbers have exploded."

Counters Kavuru: "The idea that it's contributing to mass incarceration is false. We don't have raids over small amounts of marijuana. We don't have SWAT teams kicking in doors. [Marijuana-related incarcerations represent] less than one percent of the prison population."

And there's the advocacy issue, shown by a much-known face in the campaign, that of 3-year-old Addyson Benton, whose 1,000-plus epileptic seizures a day have diminished, her parents say, thanks to CBD (cannabidiol), a non-psychoactive ingredient of cannabis. Benton's family moved from the Cincinnati area to Colorado to gain access to treatment.

For patient advocates who want to help Ohioans with cancer, post-traumatic stress disorder and other illnesses, Benton is more than a symbol, and her issues (and those of thousands of others) cannot wait.

Legalization advocate Karen Jones doesn't want the perfect to be the enemy of the good. "The prohibition of this non-toxic plant is devastating lives," says Jones, "We don't exactly have the privilege of getting to choose the fairy-tale ending to the drug war. It will be full of compromise and education."

Satori agrees no path to legalization will be perfect. "I've worked really hard to improve the language of ResponsibleOhio," she says. "Rather than being on the dinghy at the mercy of the waves, it's about being on the ship and yelling within earshot of the captain."

But Kavuru isn't as optimistic that passing Issue 3 will open access to medical marijuana. "[The amendment] doesn't protect medical patients. In the law itself, it says that they 'may,' not 'shall' implement a medical program. They claim that there will be some sliding scale for patients that can't afford it, but I don't believe it."

The ballot measure uses the word "may," explains James, because the language protects the medical part of the initiative from being in direct conflict with federal law. "Had we indicated that the government must do something in conflict with federal law, that entire section could be gone."

With so much dissent even in traditionally pro-pot ranks, wouldn't it be reasonable to wait until something less polarizing hits the ballot? The sense of urgency is high for some.

"If you're going to tell people that you're going to have something on the ballot in the 2016 presidential election-which will be very, very expensive-you need a plan," Satori says. "This is what we have right now. It's a bird in the hand, when many of us are struggling to be able to see a bush."

Kavuru dismisses concerns that running a ballot measure campaign in a presidential election year would be prohibitively expensive. "ResponsibleOhio spent $4 million on this, and they barely made it to the ballot," he says, "You don't need consultants. Getting signatures is complicated, but it's not rocket science. The more volunteers you have, the less money it costs. We have supporters that have stepped up in modest and not modest ways. And once Issue 3 fails, we won't have a problem raising money. Maybe even from their supporters."

But pro-Issue 3 folks are optimistic. They envision sub-leasing of land and networks of growers. "We have the opportunity for socially responsible businesses. We will be able to provide education for consumers, patients, and medical professionals," says Satori, "There are options to be able to form networks of home growers, and we are legally able to gift cannabis to help people. If we think a little bit outside the box on this language, there are far more opportunities [than you think] for entrepreneurship and social work to work."

Sidebar: The Other Issue

You can't talk about Issue 3 without thinking about Issue 2, the Ohio Initiated Monopolies Amendment. Most organizations that oppose the former support the latter, and vice versa. If approved, Issue 2, a bi-partisan measure put on the ballot by Ohio lawmakers, would require voters to approve two questions in back-to-back elections pertaining to initiatives establishing economic monopolies. Its language also says it will invalidate any initiatives voters approve on the Nov. 3 ballot that establish economic monopolies (read: Issue 3).

As a legislative proposal, Issue 2 would take effect prior to Issue 3, a voter-initiated proposal, says Ohio Secretary of State Jon Husted. And, because Issue 2 would take effect immediately, if both issues pass, the marijuana issue would be invalidated, Husted says.

James disagrees. "Jon is flat wrong. He's not checking with his legal counsel. If the two issues are in conflict and voted upon on the same election, the issue with the most positive votes prevails. I've had lawyers look at it." According to James, who considers Issue 2 underhanded and expensive, that means any tax rate in the future will have to go through a two-step process. In the first election, voters will be asked if they're OK being asked about an amendment. In the second year, voters would make an actual decision on the initiatives. This, he believes, would greatly inhibit any future marijuana referendum from getting passed.

Kavuru sides with Husted. "[ResponsibleOhio doesn't] comprehend English well," he says of Issue 2. "It doesn't prevent anything other than how you write the law itself. The idea that it prevents all ballot initiatives ever is so absurd, it's difficult for me to comment on that. [Issue 2] only regards constitutional amendments. When the Ballot Board sees it [for the] first time, they look to see that it's not a monopoly."

Editor's Note:This story has been corrected. In the original version online and in our Oct. 15, 2015, print edition, a sentence misstated a plank of Sri Kavuru's platform for his organization, Legalize Ohio 2016. He advocates for setting the marijuana growing and consumption age at 21, not 18 as stated in the story. Columbus Alive regrets the error.

Sidebar: The Players

Who's who in Ohio'smarijuanalegalization game.

  • Jon Husted: The Ohio secretary of state and, therefore, its chief elections officer and chairman of the Ohio Ballot Board. He personally opposes Issue 3 and has been instrumental in altering its ballot language, including the use of the word "monopoly."
  • Ian James: Executive Director of ResponsibleOhio. James was behind the successful effort to legalize gambling in the state of Ohio.
  • Sri Kavuru: President and co-founder of Legalize Ohio 2016, a movement to reject Issue 3 and instead wait for a free-market initiative.
  • Lissa Satori: cannabis activist and (hopeful) marijuana entrepreneur.
  • ResponsibleOhio: a group of professionals looking to legalize marijuana through a ballot initiative on November 3.

    ResponsibleOhio's Investors

  • Among the more than 20 people who have invested in ResponsibleOhio and who own the 10 properties where marijuana would legally be grown if Issue 3 passes:
  • Rick Kirk, real estate developer
  • Oscar Robertson, retired NBA player
  • Nanette Lepore, fashion designer
  • Barbara Gould, arts patron
  • Frostee Rucker, retired NFL player
  • Frank Wood, venture capitalist
  • Alan Mooney, financial executive
  • William J. Foster, warehousing business owner
  • William "Cheney" Pruett, payday lending company executive
  • John Humphrey, financial executive
  • Bobby George, events and entertainment entrepreneur
  • Nick Lachey, singer
  • Jennifer Doering, beverage distributor
  • David Bastos, real estate developerDr. Suresh Gupta, physician
  • Paul Heldman, lawyer
  • Woody Taft, private equity investor
  • Dudley Taft Jr., musician
  • Brian Kessler, business executive
  • Sources: ResponsibleOhio, Cincinnati Enquirer