Ohio cities could lose out on money from recreational marijuana under competing plans from Gov. Mike DeWine and state lawmakers to revamp the program.
DeWine unveiled his 2026-2027 budget proposal this month, kickstarting negotiations over the state’s spending plan for the next two fiscal years. The governor pitched a higher tax on adult-use cannabis to pay for police training, jail construction, the 988 suicide lifeline and a new program to expunge certain marijuana convictions.
What’s not included: A fund for municipalities that voters approved in 2023 as part of the recreational marijuana law.
Now, some local officials, including those in Stark County, are wondering how to cover services without an infusion of cash from dispensaries. And absent the promise of extra revenue, they may pull the plug on recreational marijuana sales altogether.
“We never would have allowed (recreational) marijuana in our community if there was not a local host sharing agreement,” said David Kubicki, president of the Columbia Township trustees in Hamilton County. “That’s why we did it. … We truly feel like we got bait-and-switched.”
In Alliance, City Council could vote Tuesday on a resolution that opposes state legislation that would cost its community possible revenue from the sales at marijuana dispensaries. Last year, council approved a dual-use marijuana dispensary on State Street, which is under construction.
“The voters of Ohio very clearly chose in 2023 to provide 36% of the taxes generated from the sales at adult-use dispensaries … to each municipal corporation or township where the dispensary is located,” the proposed resolution from Alliance reads.
Chris Hardesty, Canton’s economic development director, said city officials allowed dispensaries into the community as a “business decision” with the presumption that it would get a share of the excise tax from recreational marijuana sales as another revenue stream to use on public safety and other programs.
“We’re pretty upset” with the state proposals, he added.
How does DeWine want to spend marijuana revenue?
Ohio divides marijuana revenue into four different funds: 36% for municipalities with dispensaries, 36% for a social equity and jobs program, 25% for substance use services and 3% for administrative costs. Local governments can ban recreational marijuana sales — and dozens have — but that also means they don’t get money from the program.
Employees at a dispensary in Columbus prepare for the first day of recreational marijuana sales last summer.
DeWine isn’t the only one eyeing major changes to the voter-backed marijuana law.
Senate Republicans introduced legislation last month that, like the governor’s budget, would eliminate funding for municipalities and social equity. Senate Bill 56 would increase the tax rate on adult-use marijuana from 10% to 15% and put money in the state’s general revenue fund.
DeWine wants to tax products at 20%, with revenue going toward:
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Jail construction and renovations (25%).
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Peace officer training (16%).
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988 crisis hotline and substance use education (14%).
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Law enforcement training (14%).
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Drivers education in schools (8%).
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A program to expunge marijuana possession offenses (5%).
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Grants for local drug task forces (5%).
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The Ohio Investigative Unit, which handles cases involving tobacco, alcohol and food stamp fraud (4%).
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Poison control and lab testing (4%).
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Administrative costs (2.5%).
“We all want more money to go back to local communities, but frankly, that was almost a lottery in the sense that some got money and some didn’t get money,” DeWine told reporters. “It would’ve been nice to be able to do it, but we also have jails that need to be dealt with. We have police training.”
In Massillon, city officials were aware of the proposed cuts to the social equity fund but not the possible cuts to municipalities. There are two provisional licenses for marijuana businesses to open this summer in the western Stark County community.
“The city’s position on allowing dispensaries here has always been to honor the wishes of the voters — the cannabis issue in 2023 passed in Massillon with 57% of the vote. So we did not feel it was appropriate to ban them as other communities chose to do,” said Ted Herncane, Massillon’s economic development director.
He said officials were brainstorming possible uses of the future revenue, including road projects, and the possibility of those funds “now in jeopardy” is a disappointment.
“We welcomed that revenue as it would place less of a burden on our residents,” Herncane said.
A spokesperson for the Office of Budget and Management said local governments would still get a “significant portion” of the revenue under DeWine’s proposal, such as money for police and task forces. But current law gives cities the freedom to decide where that money should go — and they want to keep that autonomy.
“Our people know where the needs are individually in each community,” said Kent Scarrett, executive director of the Ohio Municipal League. “Each community is different. Each community has its own set of issues and circumstances.”
Products are for sale at Zen Leaf Cincinnati during the first day of recreational marijuana sales last summer.
How money could change Ohio’s recreational marijuana program
Dispensaries have sold over $319 million in recreational marijuana products since sales launched last summer, according to the Division of Cannabis Control. Municipalities haven’t received their share of the tax revenue yet, but money will be allocated in the upcoming state budget.
Local leaders have already planned for it. Kubicki said Columbia Township chose not to raise its waste collection levy in November because officials expected to have dispensary money. Anderson Township hopes to use an estimated $1.5 million annually from marijuana sales to extend a public safety levy and reduce the property tax burden on residents.
“It’s dangled out there that if you allow this type of operation in our community, if you want this type of operation in your community, there will be revenue that comes to your community,” Anderson Township Administrator Vicky Earhart said. “And then it’s swept by the state.”
Scarrett said some municipalities are threatening to cut off adult-use marijuana sales if they don’t get money in return. He urged lawmakers to maintain existing revenue for host communities and use any additional funds from a tax increase on the state’s pet projects.
Existing dispensaries wouldn’t be pushed out, but Hardesty said Canton officials would reconsider interest in future businesses opening if the state cuts local revenue.
“They need that revenue,” state Sen. Casey Weinstein, D-Hudson, said. “It really is bad policy to override the will of the voters and take back promises that were made in law to these municipalities.”
Statehouse bureau reporter Jessie Balmert and The Canton Repository staff writer Benjamin Duer contributed to this story.
Haley BeMiller covers state government and politics for the USA TODAY Network Ohio Bureau, which serves the Columbus Dispatch, Cincinnati Enquirer, Akron Beacon Journal and 18 other affiliated news organizations across Ohio.
This article originally appeared on The Repository: Ohio cities may lose recreational marijuana money if state law changes
