Sunday, April 7, 2024

Student presentation examines impact of taxation schemes on medical marijuana

Images (6)As we come down the homestretch in my Marijuana Law, Policy & Reform seminar, students continue to cover terrific issues in their research and class presentations.  This week in my class, the third scheduled presentation has been given this title: "Getting Too Into the Weeds?: An Analysis of the Impact of Different Taxation Schemes on Medical Marijuana Programs and the Potential Impacts of H.B. 86 in Ohio."    Here is how the student describes her topic (along with background readings):

Medical marijuana programs are at risk of ceasing to exist to any meaningful extent in many states that have legalized recreational marijuana.  There has been a consistent trend of declining registered medical marijuana patient numbers in those states post-legalization.  While there are potentially many causes of this decline, there is one policy decision each of these states has had to make that could have a large impact on the magnitude of this decline: taxation structure.  There are three common taxation structures selected by these states: sales tax, tax exemptions, and excise tax.  All three structures are supported by reasonable policy rationales.

At the end of 2023, Ohio joined the group of states that have legalized both medical and recreational marijuana use via an initiated statute.  The Ohio Legislature, in turn, has been left with the obligation to make any changes it deems necessary to Ohio’s recreational program before it becomes fully effective.  One of the proposals that is most likely to pass is House Bill 86 (H.B. 86).  Under H.B. 86, the excise tax on recreational marijuana would increase from ten percent to fifteen percent.  This may not seem like it will impact patient registration rates in Ohio, however, the language of H.B. 86 may open the door to application of this excise tax to medical marijuana sales in Ohio if it is passed as written.

To attempt to predict what will occur to Ohio’s medical marijuana program post-legalization of recreational marijuana under the ambiguous language of H.B. 86, this paper aims to determine if there is any correlation between the type of taxation scheme a state has for medical marijuana and the likelihood of its medical marijuana program surviving.

Background Materials:

Ohio House Bill 86 (specifically Section § 5739.27(A)).

Jenn Jarecki, Bob Kinzel, & Nathaniel Wilson, "Vermont Lawmakers Consider Changing Medical Cannabis Program, Retail Potency Limits"

Carol Kokinis-Graves, "State by State Sales Tax on Cannabis"

Kevin F. Boehnke, Owen Dean, Rebecca Haffajee, & Avinash Hosanagar, "U.S. Trends in Registration for Medical Cannabis and Reasons for Use from 2016-2020: an Observational Study"

Assembled readings on specific topics, Medical Marijuana Commentary and Debate, Medical Marijuana State Laws and Reforms, Taxation information and issues | Permalink


Post a comment