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, kicking off discussions about the state’s spending plan for the next two fiscal years.
The governor proposed a higher adult-use cannabis tax to fund police training, jail construction, the 988 suicide hotline, and a new program to expunge certain marijuana convictions.
What is not included? A municipal fund approved by voters in 2023 as part of the recreational marijuana law.
Now, some local officials, including those in Stark County, are wondering how to fund services without a cash infusion from dispensaries. Without the promise of additional revenue, they may end recreational marijuana sales entirely.
“We would never have allowed (recreational) marijuana in our community if there hadn’t been a local host sharing agreement,” said David Kubicki, president of the Columbia Township trustees in Hamilton County. “That’s the reason we did it. We really feel like we were duped.”
Alliance City Council may vote Tuesday on a resolution opposing state legislation that would deprive the community of potential revenue from marijuana dispensary sales. Last year, council approved a dual-use marijuana dispensary on State Street, which is currently 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,” according to the Alliance’s suggested resolution.
According to Chris Hardesty, Canton’s economic development director, city officials allowed dispensaries to enter the community as a “business decision” with the expectation that they would receive a portion of the excise tax from recreational marijuana sales as another revenue stream to be used on public safety and other programs.
“We’re pretty upset” about the state proposals, he said.
How does DeWine want to spend marijuana revenue?
Ohio allocates marijuana revenue to four separate 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 prohibit recreational marijuana sales, as dozens have done, but this also means they do not receive funding from the program.
DeWine is not the only one considering significant changes to the voter-approved marijuana law.
Last month, Senate Republicans introduced legislation that, like the governor’s budget, proposed eliminating funding for municipalities and social equity. Senate Bill 56 would raise the adult-use marijuana tax from 10% to 15%, putting money into the state’s general revenue fund.
DeWine wants to tax products at a 20% rate, with revenue going to:
- Jail construction and renovations (25%).
- Peace officer training (16%).
- 988 crisis hotline and substance use education (14%).
- Law enforcement training (14%).
- Drivers education in schools (8%).
- A program to expunge marijuana possession offenses (5%).
- Grants for local drug task forces (5%).
- The Ohio Investigative Unit, which handles cases involving tobacco, alcohol and food stamp fraud (4%).
- Poison control and lab testing (4%).
- 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 at the time. “It would have been nice to be able to do it, but we also had jails to deal with. “We have police training.”
In Massillon, city officials were aware of proposed cuts to the social equity fund but not to municipalities. There are two provisional licenses for marijuana businesses in the western Stark County community that will open this summer.
“The city’s position on allowing dispensaries in Massillon has always been to honor voters’ wishes — the cannabis issue in 2023 passed with 57% of the vote.
So we did not believe it was appropriate to ban them, as other communities had done,” said Ted Herncane, Massillon’s economic development director.
He stated that officials were discussing potential uses for future revenue, such as road projects, and that the possibility of those funds being “now in jeopardy” is disappointing.
“We welcomed that revenue as it would place less of a burden on our residents,” Herncane told the crowd.
A spokesperson for the Office of Budget and Management stated that under DeWine’s proposal, local governments would still receive a “significant portion” of the revenue, such as funds for police and task forces. However, current law allows cities to decide where that money should go, and they want to maintain that autonomy.
“Our people know where the needs are individually in each community,” said Kent Scarrett, executive director of the Ohio Municipal League. “Every community is different. Each community faces its own set of challenges and circumstances.
How money could change Ohio’s recreational marijuana program
The Division of Cannabis Control reports that dispensaries have sold more than $319 million in recreational marijuana products since sales began last summer. Municipalities have yet to receive their share of tax revenue, but it will be allocated in the upcoming state budget.
Local leaders have already planned for it. Kubicki stated that Columbia Township chose not to raise its waste collection levy in November because officials expected to receive dispensary funds.
Anderson Township hopes to use an estimated $1.5 million in marijuana sales each year to fund a public safety levy and reduce residents’ property tax burden.
“It’s dangled out there that if you allow this type of operation in our community, or if you want this type of operation in your community, there will be revenue,” Anderson Township Administrator Vicky Earhart said. “And then it’s swept by the state.”
According to Scarrett, some municipalities are threatening to suspend adult-use marijuana sales unless they receive payment. He urged lawmakers to keep existing revenue for host communities and to focus any additional funds from a tax increase on the state’s pet projects.
Existing dispensaries would not be forced to close, but Hardesty said Canton officials would reconsider their interest in opening new businesses if the state cut local revenue.
“They need that revenue,” said state Senator Casey Weinstein, a Democrat from Hudson. “It really is bad policy to override the will of the voters and take back promises that were made in law with these municipalities.”
