Marijuana Legalization 2015: Ohio Weed Vote Represents A Shift Toward Big Business

The hippies are out and the suits are in. As the marijuana industry continues to bloom nationwide, Ohio voters were poised to vote Tuesday on a constitutional amendment that would make pot legal and put the industry in the hands of big business interests.

Under the plan set out by backing group ResponsibleOhio, the right to grow for commercial use would be limited to 10 investment groups, all of which donated $2 million to the cause. They include Hall of Fame NBA player Oscar Robertson, fashion designer Nanette Lepore, NFL player Frostee Rucker, two great-great-grand-nephews of President William Howard Taft and former boyband member turned reality star Nick Lachey.

Critics argue Ohio's marijuana plan would create a big business oligopoly that benefits ResponsibleOhio's investors, while supporters call it a capitalistic way forward for marijuana. Either way, Ohio's plan marks a distinct shift in a growing campaign to make weed legal. Across the nation, the legal pot movement is moving away from entrepreneurial-minded small businesses that advocated for marijuana legalization in Colorado or Washington and toward rich investors hoping to flip seed money into profit. That could mean trouble for small growers looking to be part of the legal weed movement in the future.

Big Pot

As more Americans support legal pot, concerns about corporate marijuana interests dominating the industry have also grown. An October Gallup poll found 58 percent of United States citizens support legalizing the drug. Meanwhile, California activists have bristled at billionaire Sean Parker, of Napster and Facebook fame, reportedly funding a legalization initiative, while musician and famous smoker Willie Nelson has crusaded against Big Pot blocking opportunities for small growers.

A study from The ArcView Group, a cannabis investing and research firm, found last year that the U.S.'s market for legal cannabis grew 74 percent to $2.7 billion, up from $1.5 billion the year before. Among the more mainstream marijuana investors in recent years are PayPal co-creator Peter Thiel, who funded cannabis startup Privateer with $75 million. Other signs of corporate marijuana taking over the industry include the rise of marijuana pharmaceutical and marijuana management and consulting firms.

Should the Ohio legalization amendment pass Tuesday, it would allow for both recreational and medical marijuana use in Ohio. It would be the first time a state made both legal in one fell swoop. Those who bankrolled ResponsibleOhio to the tune of $25 million would get exclusive growing rights. In contrast, Colorado spent just $3 million in 2012 in its successful effort to legalize marijuana. Ian James, a political consultant who headed up the Ohio effort, described the campaign as a move from tie-dye to suit and tie.

That shift comes as no surprise to marijuana advocates. "That’s reflective of the way the industry is moving," said ResponsibleOhio spokeswoman Faith Oltman.

Ohio's Controversial Plan

If Ohio's wealthy pot investors are the new model for big business, Anthony Franciosi is the old model. He moved to Colorado in 2008 and eventually started Honest Marijuana, an organic marijuana farming operation. Franciosi lauded a bootstrap model in Colorado that allowed marijuana supporters like himself to try their hand as small business operators. But that's changing, he said.

"Unfortunately, the whole tide of legalization is moving toward big business," he said. "The people who are becoming involved in the industry at this point aren’t cannabis connoisseurs, they're not cannabis people."

Under the proposed Ohio plan, adults over 21 would be able to grow up to four plants for themselves and the state would license retailers. It would generate $554 million in state tax revenue by 2020, 85 percent of which would go toward safety services and infrastructure repair. ResponsibleOhio organizers have said they will keep the 10 investors from colluding on prices and could perhaps allow for expansion as demand grows.

The voting results were projected to be close. An October statewide poll by the University of Akron found voters were split at 46 percent for the plan and 46 percent against, with eight percent still undecided, Cleveland.com reported.

Opponents of the plan include law enforcement officials worried about crime and medical officials defending children's health issues. State lawmakers have also jumped into the fray by creating an opposing anti-monopoly amendment that would effectively void the legalization amendment. Should both amendments pass after Tuesday's vote, a legal battle would likely follow.

For opponents of legalization, Ohio's plan is the latest proof the industry is moving toward profit at all costs.

"This is not about the values of the hippies, this about the value of Wall Street bankers and nothing short of greed," said Kevin Sabet, president of Smart Approaches to Marijuana and a former adviser to President Barack Obama’s Office of National Drug Control Policy. "This is about making money for celebrities and people who already are rich."

Some advocacy groups have called for marijuana aficionados to reject the plan, despite wanting legal marijuana. They want to retry in 2016 under a plan they claim would create a more fair market. Others have remained silent. Two major advocacy groups, Marijuana Policy Project and the Drug Policy Alliance, have remained neutral on Ohio's ballot battle.

"This is one of those classic crony capitalist kind of cases," Franklin G. Snyder, a law professor at Texas A&M University who has studied marijuana law and policy, said. "Those of us who like the small business model … we see that as a problem."

Ending Prohibition

ResponsibleOhio said that many of their opponents don’t understand their plan. The 10 growers will compete and, should demand grow, more could be added in the future, they said. And they feel other marijuana reform advocacy groups pushing a no vote and a 2016 retry are misguided.

"We have been fighting tooth and nail with lawmakers who don’t want to see marijuana reform. They put up barriers at every step of the way," Oltman said. "Folks who think a competing issue will get on the ballot in 2016 really haven’t been paying close attention to how hard lawmakers have fought against marijuana reform in Ohio."

The National Organization for the Reform of Marijuana Laws, or NORML, has backed the plan despite some misgivings. The oligopoly atop the state is worrisome, "but not a concern enough to want to keep prohibition in place," Allen St. Pierre, NORML executive director, said.

"We want to end prohibition ... not pick the winners [at] the end of prohibition," St. Pierre said. "Congress on [legalization] is highly dysfunctional and the only way they're going to move is if they get upward political pressure in the states."

Supporters argue that should the plan find success in Ohio, home to corn-fed, Midwest towns like Cleveland, Cincinnati and Columbus, and a frequent bellweather of national politics, then legalization could expand anywhere. That could also mean ResponsibleOhio's model could catch on and rich investors nationwide would look to grow their fortunes through marijuana.

"Ohio -- win or lose -- is breaking the mold for the future," said NORML's St. Pierre. "Marijuana is moving likely from illegal contraband to chamber of commerce."