United States: Governor Kasich Signs Bill To Legalize Marijuana For Medicinal Use In Ohio

On June 8, 2016, Governor John R. Kasich signed into law HB 523, which legalizes marijuana in Ohio for specified medicinal purposes. The bill moved swiftly through the Legislature as lawmakers acted to preempt a marijuana legalization initiative that appeared headed for the November 2016 ballot. HB 523 takes effect on September 7, 2016. Below we provide some background on the issue and a general summary of the bill.

Background

Last year, Ohio voters rejected a ballot initiative to legalize marijuana for medicinal and recreational use. Known as "Issue 3," the proposed constitutional amendment created a regulatory framework that allowed just ten pre-selected private businesses to commercially manufacture marijuana. The initiative was soundly defeated.

In the aftermath of Issue 3, a different marijuana legalization campaign led by the national organization Marijuana Policy Project immediately began collecting signatures for the November 2016 ballot. In an apparent response to the public support for legalization and MPP's proposed constitutional amendment, Ohio's legislative leaders convened a 15-member "marijuana task force," consisting of legislators as well as interested parties, to review the issue and submit policy recommendations.

Based on task force recommendations, HB 523 was introduced. The legislation establishes an extensive, highly regulated "seed to sale" system for growing, processing, testing, and dispensing marijuana for patients with any of 20 specified medical diseases or conditions. Immediately after the bill's passage, MPP announced that it was suspending its ballot issue campaign.

Overview of HB 523

Medical Marijuana Control Program: HB 523 requires the Department of Commerce and the State Board of Pharmacy to establish a Medical Marijuana Control Program to provide for the following: 1) the licensure of medical marijuana cultivators, processors, and retail dispensaries; 2) the registration of patients and caregivers; and 3) the licensure of laboratories that test marijuana.1

The Department of Commerce will be responsible for the licensure of cultivators, processors, and testing laboratories, while the Board of Pharmacy will be charged with the licensure of retail dispensaries and the registration of patients and caregivers. The State Medical Board is tasked with issuing certificates to those physicians seeking to recommend treatment with medical marijuana.2

No later than one year after the bill's effective date, the Department of Commerce and Board of Pharmacy must separately adopt rules establishing standards and procedures for the portions of the Program each is responsible for administering.3

Medical Marijuana Advisory Committee: The bill establishes the Medical Marijuana Advisory Committee and authorizes it to develop and submit to the Department of Commerce, Board of Pharmacy, and Medical Board any recommendations related to the Medical Marijuana Control Program. The Committee consists of the following 14 members:

  • Two members who are practicing pharmacists, at least one of whom supports the use of marijuana for medical purposes and at least one of whom is a member of the Board of Pharmacy
  • Two members who are practicing physicians, at least one of whom is a member of the State Medical Board
  • A member who represents law enforcement
  • A member who represents employers
  • A member who represents labor
  • A member who represents persons involved in mental health treatment
  • A member who is a nurse
  • A member who represents caregivers
  • A member who represents patients
  • A member who represents agriculture
  • A member who represents persons involved in the treatment of alcohol and drug addiction
  • A member who engages in academic research4

Qualifying Medical Conditions: HB 523 provides that medical marijuana may be recommended only for the treatment of "qualifying medical conditions," which include: AIDS, amyotrophic lateral sclerosis, Alzheimer's disease, cancer, chronic traumatic encephalopathy, Crohn's Disease, epilepsy or another seizure disorder, fibromyalgia, glaucoma, hepatitis C, inflammatory bowel disease, multiple sclerosis, pain that is either chronic and severe or intractable, Parkinson's disease, positive status for HIV, post-traumatic stress disorder, sickle cell anemia, spinal cord disease or injury, Tourette's syndrome, traumatic brain injury, and ulcerative colitis. The new law also authorizes any individual to petition the State Medical Board to add a disease or condition to the list of qualifying medical conditions.5

Permissible Forms of Medical Marijuana: HB 523 permits only the following delivery methods of marijuana: oils, tinctures, plant material, edibles, patches, and any other form approved by the Board of Pharmacy. The bill expressly prohibits smoking or combustion, but allows for vaporization. Any method or form considered "attractive to children," as specified in the rules adopted by the Board, is prohibited as well.6

Authority to Recommend Medical Marijuana Treatment: A physician seeking to recommend medical marijuana must apply to the State Medical Board for a "certificate to recommend." A physician who holds a certificate may recommend that a patient be treated with medical marijuana if the patient has been diagnosed with a qualifying medical condition and a bona fide physician-patient relationship has been established through all of the following: 1) an in-person physical examination of the patient by the physician; 2) a review of the patient's medical history by the physician; and 3) an expectation of providing and receiving care on an ongoing basis.7

Authority to Use, Possess, or Administer Medical Marijuana: A patient seeking to use medical marijuana or a caregiver seeking to assist a patient in the use of medical marijuana must apply to the Board of Pharmacy for registration. The physician who holds a certificate to recommend and is treating the patient must submit the application on the patient's or caregiver's behalf.8

HB 523 authorizes a registered patient to use or possess medical marijuana or any paraphernalia specified in the Board of Pharmacy rules. A caregiver is also authorized to possess or assist a registered patient in the use or administration of medical marijuana. Under the bill, a registered patient or caregiver may not possess more than a 90-day supply. A registered caregiver who provides care to more than one registered patient must maintain separate inventories of medical marijuana for each patient.9

Protection from Arrest and Criminal Prosecution: HB 523 provides that a registered patient or caregiver is not subject to arrest or criminal prosecution for any of the following actions: 1) in the case of a registered patient, using medical marijuana; 2) obtaining or possessing medical marijuana; 3) possessing specified paraphernalia or accessories; and 4) in the case of a registered caregiver, assisting a registered patient in the use or administration of medical marijuana. The bill also establishes for patients an affirmative defense to a criminal charge of knowingly obtaining, possessing, or using marijuana.10

Cultivation and Sale of Medical Marijuana: The bill authorizes the holder of a cultivator license to cultivate medical marijuana and deliver or sell it to one or more licensed processors. Processors may then process the marijuana into a legally permitted form and sell it to one or more licensed retail dispensaries. Retail dispensaries may then sell to qualifying patients. Home grow is prohibited under the bill.

Licensure of Cultivators, Retail Dispensaries and Laboratories: An entity that seeks a license to cultivate, process, or conduct laboratory testing of medical marijuana must file an application for licensure with the Department of Commerce. An entity that seeks a license to dispense medical marijuana at retail must file an application with the Board of Pharmacy.

The Department of Commerce and the Board of Pharmacy may issue the licenses described above so long as the following conditions are met:

  1. The applicant demonstrates that it does not have a financial interest in a laboratory testing operation
  2. The applicant demonstrates that it does not share any corporate officers or employees with a laboratory testing operation
  3. The applicant demonstrates that it will not be located within 500 feet of a school, church, public library, public playground, or public park
  4. The report of the criminal records check conducted demonstrates that the person subject to the check is not disqualified because of a conviction or guilty plea to an offense specified in rules
  5. Information provided by the Ohio Department of Taxation demonstrates that the applicant is in compliance with state tax laws
  6. The applicant meets all other licensure eligibility conditions established in the rules11

In addition, the Department of Commerce may not issue a license to conduct laboratory testing of medical marijuana unless the applicant is an institution of higher education that meets the following two conditions: 1) the institution is public and located in Ohio; and 2) the institution has the resources and facilities necessary to conduct testing in accordance with the standards and procedures established in rules adopted by the Department.12

Minority Benchmarks: The bill requires that the Department of Commerce and the Board of Pharmacy each issue at least 15% of licenses to entities that are owned or operated by individuals who are members of one of the following economically disadvantaged groups: 1) Blacks or African Americans; 2) American Indians; 3) Hispanics or Latinos; and 4) Asians. However, if no applications or an insufficient number of applications are submitted by such entities that meet the conditions for licensure, the Department and Board may issues licenses according to normal procedures.13

Zoning / Municipal and Township Authority: HB 523 authorizes a municipal corporation to adopt an ordinance, and a board of township trustees to adopt a resolution, to prohibit, or limit the number of, licensed retail dispensaries of medical marijuana within the municipal corporation or within the unincorporated territory of the township.14

Current law limits the power of counties and townships to zone land used for agricultural purposes. The bill provides that these existing limitations do not prohibit a township from regulating the location of retail dispensaries. The bill does not provide similarly for counties.

Effect on Employers and Employment Laws: HB 523 specifically provides that nothing in the bill:

  • Requires an employer to permit or accommodate an employee's use, possession, or distribution of medical marijuana
  • Prohibits an employer from refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment because of that person's use, possession, or distribution of medical marijuana
  • Prohibits an employer from establishing and enforcing a drug testing policy, drug-free workplace policy, or zero-tolerance drug policy
  • Interferes with any federal restrictions on employment, including U.S. Department of Transportation regulations
  • Permits a person to sue an employer for refusing to hire, discharging, disciplining, discriminating, retaliating, or otherwise taking an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment related to medical marijuana
  • Affects the authority of the Administrator of Workers' Compensation to grant rebates or discounts on premium rates to employers that participate in a drug-free workplace program established in accordance with rules adopted by the Administrator.15

Unemployment Eligibility: Under the bill, a person who is discharged from employment based on that person's use of medical marijuana is considered to have been discharged for "just cause" so long as the person's use of medical marijuana violated an employer's drug-free workplace policy, zero-tolerance policy, or other formal program or policy regulating the use of medical marijuana.16

Workers' Compensation Eligibility: Under current law, an employee or dependent is ineligible for workers' compensation benefits if the employee's injury or occupational disease is caused by the employee being under the influence of a controlled substance not prescribed by a physician, so long as the intoxication was the proximate cause of the injury. The bill maintains that if an employee's intoxication from marijuana is the proximate cause of his or her injury, the employee becomes ineligible for benefits, regardless of whether the marijuana use was recommended by a physician.17

Banking Services Provisions: Under HB 523, financial institutions that provide financial services to cultivators, processors, retail dispensaries, or laboratories are exempt from certain state criminal laws that prohibit the provision of financial services to persons who process, deliver, or manufacture marijuana, so long as the cultivator, processor, retail dispensary, or laboratory is in compliance with the bill and the applicable Ohio tax laws.18

The bill authorizes the Director of Commerce to establish a closed-loop payment processing system under which the state creates accounts to be used only by registered patients, registered caregivers, and license holders. The system may include record-keeping and accounting functions that identify all parties involved in marijuana transactions.

Automated Prescription Reporting System: The Ohio Automated Rx Reporting System (OARRS) is a drug database established and maintained by the Board of Pharmacy to monitor the misuse and diversion of controlled substances. HB 523 authorizes the Board of Pharmacy to monitor medical marijuana through OARRS, by requiring that retail dispensaries report to OARRS when dispensing medical marijuana.19

Monitoring Database: The Department of Commerce must establish and maintain an electronic database to monitor medical marijuana from its seed source through its cultivation, processing, testing, and dispensing. The Department may contract with a separate entity to establish and maintain all or part of the database itself.20

Federal Law: The bill declares that it is the intent of the Ohio General Assembly to recommend that the United States Congress, the Attorney General of the United States, and the United States Drug Enforcement Administration take actions as necessary to reclassify marijuana in an effort to ease the regulatory burdens associated with research on its potential medical benefits.21

Conclusion

The timeline of Ohio's Medical Marijuana Control Program and its implementation depends on how quickly each regulatory agency can complete its assigned tasks and formulate its rules. However, the bill requires that the Department of Commerce and Board of Pharmacy take all actions necessary to ensure that the Program is fully operational not later than two years after the bill's effective date. That date is September 8, 2018.

To continue reading this article, please click here.

Footnotes

1 R.C. 3796.02.

2 R.C. 4731.30(B)(1).

3 R.C. 3796.03(A)(1); R.C. 3796.04(A)(1).

4 R.C. 3796.021(A)(1) - (12)

5 R.C. 4731.302(A).

6 R.C. 3796.06(C).

7 R.C. 4731.30(c)(1)(a) - (c).

8 R.C. 3796.08(A)(1).

9 R.C. 3796.23(A)-(B).

10 R.C. 3796.22(c)(1) - (2).

11 R.C. 3796.09(B)(1) - (6).

12 Sub.H.B. No. 523, Section 5.

13 R.C. 3796.09(C).

14 R.C. 3796.29.

15 R.C. 3796.28(A)(1) - (6).

16 R.C. 3796.28(B).

17 R.C. 4123.54(A)(1) - (2).

18 R.C. 3796.27(B).

19 R.C. 4929.771(A).

20 R.C. 3796.07.

21 Sub.H.B. 523, Section 4.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions