Governor Mike DeWine has introduced a new proposal regarding the distribution of sales tax revenue generated from recreational marijuana in Ohio. This change comes after the legalization of recreational cannabis in 2023, which led cities to anticipate significant financial gains from sales tax. However, DeWine’s proposal suggests that local discretion over these funds may be limited, altering how cities receive their expected revenue.
Recreational marijuana sales began in Ohio last August, resulting in a substantial revenue boost. By March 15, adult-use cannabis sales had surpassed $390 million, contributing an impressive $30 million in tax revenue from September to the end of February, according to the Ohio Office of Budget and Management (OBM). This tax includes a specific 10% levy on recreational purchases, with 36% of the proceeds intended for the Host Community Cannabis Fund.
In November, the City of South Euclid’s Director of Community Services, Keith Benjamin, expressed hope for additional funding from the cannabis tax. The city’s Finance Director estimated that South Euclid would gain around $100,000 from adult-use cannabis in 2024, despite having only one licensed dispensary. Benjamin noted the uncertainty surrounding the sales generated by this dispensary and how the state would allocate the funds to the city.
While South Euclid awaits clarity on its revenue, the City of Cleveland anticipates receiving approximately $410,000 from cannabis taxes. However, Cleveland officials, including Chief Communications Officer Sarah Johnson, have stated that the city lacks information on the exact amount it will receive. Cleveland is home to six dispensaries, representing 4.7% of all licensed dispensaries in Ohio.
Johnson mentioned that the city expected to start receiving its share of cannabis revenues in November 2024. However, since the allocation was not incorporated into the previous state budget, funds may not be distributed until July 2025, the start of the new fiscal year, unless new legislation is passed. Concerns have also been raised that the state may redirect these funds for its own use rather than distributing them to municipalities as intended.
