Ohio municipalities are receiving their promised tax revenue from recreational marijuana sales, more than a year after dispensaries opened their doors across the state.
More than $35 million in tax revenue has been sent to around 100 communities. Municipalities are using the 14 months' worth of funds for everything from street repairs to investing in public safety services.
Missy Mick, the mayor of Seven Mile in southwest Ohio, said she was shocked about how much her small village in the suburbs of Cincinnati received. The village of around 700 people received more than $400,000 in tax revenue.
“This is going to make a huge difference for Seven Mile,” she said.
Why did it take so long?
In November of 2023, Ohio passed Issue 2, which allowed the sale of recreational marijuana. That ballot initiative called for a 10% tax on marijuana sales and 36% of that tax revenue to go directly back to the local communities that host dispensaries.
Dispensaries began opening their doors the next year, but the tax revenue didn’t immediately make it to municipalities. The state legislature still needed to pass legislation to release the funds from the state. But there was debate among lawmakers about the dedicated local funds (called the Host Community Cannabis Fund). Some argue it should be reduced from 36% to 20%. Others argued it should be taken out entirely.
Some communities expressed frustration over the wait. The city of Columbus invoiced the statehouse last December.
“We can’t wait forever,” said city councilmember Shannon Hardin said in an social media video back in November. “Because of the cuts of the federal government for social services, we need that money now more than ever.”
In the end, the General Assembly stood by the original statute to give 36% to Ohio host communities with the passage of Senate Bill 56. Senator Steve Huffman, R-Tipp City, sponsored the legislation.
“We honored what the people voted for and I’m happy for those [communities],” he said.
Which communities received the most tax funds?
Columbus received $4.7 million dollars from nearly 20 dispensaries – the most in the state. Cincinnati followed in second with $2.5 million.
But it wasn’t just major metropolitan areas that topped the list. Wintersville, a village in Jefferson County in the Steubenville metro, received nearly $900,000, despite having a population of 3,000 people. That’s $100,000 more than Cleveland dispensaries generated in tax revenue.
Jana Hrdinova with Ohio State University’s Drug Enforcement and Policy Center says while urban centers are typically more receptive to dispensaries, location is still a powerful factor.
“You would probably expect lower-than-expected revenue in dispensaries bordering Michigan, simply because Michigan dispensaries offer products at much lower prices than Ohio dispensaries,” she explained.
That means while cities in northwest Ohio have stiff competition from the north, places that border West Virginia, like Wintersville, or towns on the border of Kentucky have a competitive advantage.
How do communities plan to use this money?
Mick, mayor of Seven Mile, said their village council hasn’t yet decided what their pot of money will go toward, but there is no shortage of options. They are considering replacing an old dump truck or repaving a street – things they’ve been unable to do for a very long time because they couldn’t afford it with their small tax base.
On the other end of the state, Painesville Township in Lake County says they are using their funds to avoid putting another fire levy on the ballot.
“Our goal is to prolong the need for asking for additional money from our residents,” said city administrator Holly Bartone. “So we'll be earmarking the majority – if not all – of that additional revenue to help fund the fire department.”
In 2024, an OSU Drug Policy Enforcement Center survey found that infrastructure and public safety were the biggest two priorities identified by host communities for cannabis tax funds.
What else are researchers watching?
The ballot initiative originally had around a third of marijuana tax revenue going toward an Cannabis Social Equity and Jobs Fund to pay for initiatives like record sealing for people convicted on possession of marijuana charges. The Ohio legislature voted to eliminate that program in October of last year.
Hrdinova said she is watching to see if any cities decided to use their local tax funds on those kinds of initiatives.
“From what we saw in our survey [of Ohio host communities], almost no municipality was thinking about social equity programs at all, but that doesn't mean that that might not change,” she said.
There are also around 100 communities who have issued moratoriums to keep dispensaries out. Hrdinova said communities may reconsider these temporary bans after seeing neighboring municipalities cashing checks and improving infrastructure.
Mick said her village initially debated whether or not to allow dispensaries. She thought she would regret the decision, but the recent payout has felt like validation of the village's choice.
“I didn’t think Seven Mile was the right fit for [dispensaries],” she said. “But it happened … and we have not had one problem with the dispensary being in Seven Mile. They’ve been good neighbors.”
