Chris Castle and Kelly Beck are co-sponsoring the legislation, which will be presented in a first reading at Tuesday’s work session. They said they want to send a clear message to medical-marijuana cultivators that they are welcome in the Maple City. Castle, a Democrat, represents the fourth ward while Beck, an Independent, is an at-large council member.
It has been nearly a year since both the Ohio Senate and House of Representatives passed House Bill 523, making Ohio the 26th state in the union to legalize medical marijuana. The law went into effect in September, although rules governing cultivation facilities will not be concreted by the Ohio Department of Commerce until May 6.
State law allows for municipalities to opt out, effectively banning medical cannabis industry operations within their jurisdictions. While some Ohio cities have chosen that path, others have been proactive in drafting legislation which would clear the way for such businesses.
“This is a legal, healthcare industry sector, fully supported by the state,” Beck said. “At a time when our community is struggling with unemployment and flat revenue streams, why in the world would we chase good paying jobs and the accompanying tax dollars away?”
Beck said Norwalk needs to show it welcomes medical-marijuana cultivation facilities, be innovative and “look outside the box” in generating revenue.
With only 24 licenses being issued for cultivators throughout Ohio, he said “if we don’t do this now, we could be shut out of the whole process.”
Application and license fees are expected to cost about $200,000. In addition, applicants must demonstrate that they have $500,000 in liquid assets while providing a surety bond of $2 million.
Castle said this is a good time to present this proposed legislation “because the wheels are being put in place in May.”
“Very few municipalities are being proactive in addressing that deadline of May 6,” he added. “We want to be at the forefront of the industry.”
Denver saw nearly $30 million in 2015 from medical-marijuana taxes and licensing fees alone, Castle said, adding Ohio’s foray into the industry is expected to generate potential revenues as high as $500 million annually. Castle and Beck said Norwalk’s central location within the state gives the city a logistical advantage when competing with other municipalities.
“Norwalk is located between two of the biggest markets in the state — Cleveland and Toledo,” Castle said. “We have access to multiple state and U.S. routes and we are within a few minutes of the nation’s east/west corridor — I-80/I-90.”
Beck agreed, saying the Maple City has easy access for transportation.
“We are right in that corridor,” he added.
“Nationwide, the compound annual growth of the medical cannabis industry is projected to be 25 percent over the next five years,” Castle said. “The only industry categories that have even come close to those numbers are cable television during the 1990s and the internet in the 2000s. We have an opportunity to be innovators here.”
Both Beck and Castle said they believe that Norwalk residents, once informed of the strict regulations proposed by the state, will support their efforts. A Quinnipiac poll released in late 2016 showed that 90 percent of Ohio’s registered voters support the idea of legal marijuana for medical use, a sentiment echoed when HB 523 passed in the Ohio House of Representatives with a bipartisan vote of 71-26.
“We’re talking about indoor cultivation only. Not processing facilities or dispensaries, but simple cultivation. And from my understanding, these facilities will be highly secured,” Beck said.
Castle acknowledges there may be some initial misconceptions to address.
“If this were Pfizer, looking to open a facility to manufacture prescription opiates, we wouldn’t even be having this conversation. The stigmas associated with cannabis could easily cost this city 40 or 50 jobs and hundreds of thousands of dollars in revenue,” he said.
Castle has considered presenting this legislation for about a week. He said he has spoken to “all voting members of council,” members of law enforcement, healthcare professionals and “several city leaders,” but he didn’t elaborate.
“I haven’t had a single ounce of negative feedback. We understand where we are financially as a city. We understand revenue is flat, we understand expenses are rising and we can’t continue to go back to the well and ask voters to spend their money when there are more creative means to generate revenue,” Castle added.
The state medical-marijuana program will be administered by the State of Ohio Board of Pharmacy, State Medical Board of Ohio and Ohio Department of Commerce. The legislation bans the smoking of medical cannabis; promoting oils, tinctures and patches instead. The bill outlines 20 specific qualifying conditions, including: Alzheimer's disease, ALS, cancer and Parkinson’s Disease.
Beck said the costs associated with establishing these cultivation facilities should quell concerns of any haphazard operations within Norwalk.
“These companies will have too much skin in the game to compromise their investment with careless business practices,” he said.
Castle agreed, adding that “between the sheer cost of doing business and the unequivocal regulations established by the state, these facilities will be run like Fort Knox.”