Q & A With MPP s Rob Kampia Regarding the 2016 Ohio Medical Marijuana Initiative

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1 Q & A With MPP s Rob Kampia Regarding the 2016 Ohio Medical Marijuana Initiative March 1, 2016 NOTE TO REPORTERS: The answers below can be used as stand-alone quotes attributed to Rob Kampia, executive director of the Marijuana Policy Project. Q: How does the Ohio initiative compare to other state laws? A: "The Ohio initiative is similar to the medical-marijuana laws in 23 states and the District of Columbia. The Ohio initiative will allow patients with a list of medical problems to use, possess, and grow their own medical marijuana if they have the approval of their physicians. The state government will issue ID cards to make it easy for law enforcement to identify which patients and caregivers can legally possess medical marijuana, and the state government will also issue licenses to businesses to provide medical marijuana to patients. We drafted the initiative based on the best practices in other states that have legalized medical marijuana." Q: Who is running the initiative campaign? A: "The Marijuana Policy Project played a leading role in drafting the Ohio initiative and has formed a campaign committee called Ohioans for Medical Marijuana, which will be the driving force behind the measure. Ohioans for Medical Marijuana will represent a broad coalition of patients, advocates, professionals, and local and national organizations." Q: Who is paying for the Ohio campaign? A: "The Ohio campaign will be funded by citizens, philanthropists, businesses, and organizations that believe seriously ill people should have legal access to medical

2 marijuana if their doctors recommend it. We hope to receive support from a range of in-state and out-of-state donors, small and large." Q: Does the Ohio initiative contain an open-ended list of medical conditions, like California? A: "The initiative isn't open-ended like California's law. Rather, the list of medical conditions in the Ohio initiative is similar to the laws in Arizona and Michigan, in that the Ohio initiative will protect patients with cancer, AIDS, multiple sclerosis, severe pain, post-traumatic stress disorder, and several other medical conditions. People can also petition the Ohio government to add medical conditions to the list, which is important for people with rare diseases." Q: What do you say to people who support legalizing medical marijuana but object to amending the state Constitution to accomplish this? A: "Because we need to guarantee patients the ability to access medical marijuana as a treatment option, the Ohio Constitution is the place this must be done. Furthermore, the initiative goes even farther by specifying that the Ohio government cannot enact any law that reduces patients' access to medical marijuana." Q: Do patients need special licenses to grow marijuana? A: "Any patient with a medical-marijuana ID card can grow up to six plants without needing to obtain a special license or pay taxes on that marijuana. Or, if the patient prefers, a caregiver can grow the medical-marijuana plants for the patient." Q: Can a caregiver set up a warehouse to grow a large number of plants and make a living off of medical marijuana?

3 A: "No, a caregiver can grow medical marijuana for no more than five patients, and the initiative doesn't allow the caregiver to charge patients for the caregiver's time. A caregiver can only be reimbursed for hard costs, such as lights and electricity." Q: When will the medical-marijuana program be launched? A: "No later than January 2017, the director of commerce and the director of health must appoint the members of a Medical Marijuana Control Division and a Medical Marijuana Advisory Board, respectively. No later than July 2017, the MMCD must publish final regulations that define the operations of the medical-marijuana program, and the MMCD must set up a registry for qualifying patients and caregivers no more than one month later. This means that patients can begin submitting applications for ID cards for themselves and their caregivers in August 2017, which is a fast turnaround as compared to other states. For example, New Hampshire legalized medical marijuana in July 2013, but the first patient ID card wasn't issued until December 2015." Q: How soon will the law protect patients? A: "Starting in December 2016, patients will be protected from jail if they have a qualifying medical condition that's diagnosed by their physicians. And starting in August 2017, patients with ID cards will be protected from both arrest and jail." Q: Can you please explain the different kinds of business licenses? A: "There will be five kinds of business licenses -- cultivation, manufacturing, distribution, testing, and retail. With cultivation, there will be large-grow licenses and medium-grow licenses. Manufacturing is the process of converting medical marijuana from plant material into oils, capsules, and other products for patients to consume. Distribution licenses are for unaffiliated companies to move marijuana between the other four kinds of businesses, but distribution licenses aren't required; they're just a convenience. Testing facilities are really just chemistry labs that test marijuana for potency and contaminants. And retailers are known as dispensaries,

4 which are the only kind of business that's permitted to sell medical marijuana directly to card-carrying patients and caregivers." Q: What are the restrictions for obtaining business licenses? A: "Only Ohio residents who are at least 21 years old and without recent felony convictions may obtain business licenses. These applicants must demonstrate that the property where the business will be located isn't within 500 feet of schools or other sensitive areas, that the applicant has obtained all local licenses that are required, and that the applicant controls any property where marijuana will be cultivated." Q: What are the application deadlines for the business licenses? A: "There are three dates when businesses can begin applying for licenses, and the Medical Marijuana Control Division must either approve or reject each application within 90 days. The MMCD will begin accepting applications for large grows, manufacturers, and testing facilities in August The MMCD will begin accepting applications for distributors and medium grows in November And the MMCD will begin accepting applications for dispensaries in February 2018." Q: Why are there three different application deadlines? A: "We needed to spread out the application deadlines to avoid a bottleneck, which is what happened in Maryland. In Maryland, there was only one application deadline, and all 1,081 business applications simultaneously hit the desk of a government bureaucrat in November As a result, Maryland retailers won't begin selling medical marijuana until late 2016 at the earliest, even though that state law was enacted in June 2014." Q: How did you decide which businesses should be in each of the three tranches?

5 A: "The goal is to get medical marijuana into the hands of patients as soon as possible, because we view the prohibition of medical marijuana as a public-health emergency. As such, the Ohio government must quickly assess a relatively small number of large-cultivation applications, so that seeds can be planted in the ground ASAP. Because these cultivation businesses will probably need to manufacture and test their own medical marijuana, the state government must also process these two kinds of businesses applications ASAP. After that initial wave of business applications, the state government would then have 90 days to assess the mediumcultivation applications, so that those seeds can also be planted before the state government starts issuing licenses to dispensaries to sell medical marijuana to patients." Q: How did you arrive at the number "15" for the number of large-grow licenses? A: "We looked at two other mid-western states to arrive at 15 large-grow licenses in Ohio. There are 22 large-grow licenses in Illinois, and there are only two largegrow licenses in Minnesota. So we chose a number in the middle for Ohio, but we did something even better for Ohio. In Illinois and Minnesota, each large cultivator can grow an infinite number of plants, while no medium-sized cultivators are permitted. But in Ohio, each large cultivator can grow no more than 25,000 square feet of canopy, and there's no limit on the number of medium-sized cultivators that can each grow 5,000 square feet of canopy." Q: Is there a chance that the 15 large growers will provide all of the medical marijuana for the entire state's population, thereby preventing medium-sized growers from participating in the process? A: "A dozen or 15 large grows can't possibly provide all of the medical marijuana that's needed in the state. In fact, 15 large grows would comprise a combined total of less than nine acres, which obviously isn't sufficient to treat what will be approximately 215,000 patients. This is why we included no cap on the number of medium-grow licenses."

6 Q: Why do you say there will be 215,000 patients in Ohio? A: "In Michigan, 2.4 percent of all adults possess medical-marijuana ID cards. If the same percentage applies to the 9,000,000 adults in Ohio, this translates into 215,000 adults needing and choosing to use medical marijuana in Ohio." Q: What about children who suffer from epileptic seizures? A: "As with other states with medical-marijuana laws, the Ohio initiative would allow parents or legal guardians to purchase and administer medical marijuana to children suffering from epileptic seizures and other medical conditions, if approved by a physician." Q: What's the application fee to obtain a business license? A: "The application fee for five of the six business licenses is $5,000 per application. As for the licenses for the large grows, the application fee is $500,000 per application." Q: Why is the fee for one of the two types of cultivation licenses so large? A: "There are two reasons why the application fee is large for the large-cultivation licenses. First, the large fee for large grows will allow all the other business licenses and patient ID cards to have low fees, because all of these fees combined must pay for the administration of the entire medical-marijuana program. Second, we need a lot of money to flow into the program quickly, in order to pay for its administration sooner rather than later." Q: But still, the $500,000 application fee is a big number, isn't it?

7 A: "If someone doesn't want to pay $500,000 to the state government, they don't have to. Furthermore, if you really want to save the large growers money by reducing their application fees, who should pay higher fees as a result? The momand-pop marijuana businesses? The patients? The taxpayers? Q: Okay, how much money is needed to run the medical-marijuana program in Ohio? A: "The Medical Marijuana Control Division of the Ohio government will determine the annual operating costs of the program, but we know that the fees to the Arizona program totaled $8,700,000 in In Ohio, if there are 12 largegrow applications, 400 other business applications, and 200,000 patient applications, this would total $16,000,000 in fees for the first year in Ohio. Because Ohio's population is 70 percent larger than Arizona's population, this makes sense. That said, I predict that the revenues from the initial fees will be larger than what will actually be needed in Ohio, which means the patient fees will probably drop in the second year of operation in Ohio." Q: What are the annual renewal fees after businesses obtain their licenses? A: "The annual renewal fees for all six business licenses can be no more than the original application fees, which means no more than $5,000 for five kinds of licenses and $500,000 for the sixth kind of license. In addition, each patient will never have to pay more than $40 for each patient/caregiver team. Taking all of this into account, the state government must set the renewal fees so that the medicalmarijuana program will neither run out of money nor stockpile money." Q: Please talk about the tax implications of this initiative. A: "Business fees and patient ID-card fees must pay for the entire medicalmarijuana program, so no tax money will be used. Furthermore, no special taxes will apply to medical marijuana, so the regular sales tax of 5.75 to 8.75 percent will be the only tax. All of the state sales taxes will go to the state government's

8 general fund, and any local sales taxes will be distributed as local governments see fit." Q: What's the role of local governments in this initiative? A: "Local governments will have the ability to limit or ban the number of medicalmarijuana businesses in their communities. However, if a local government chooses to ban all retail dispensaries, the initiative requires that the public must have the opportunity to approve that potential ban during the next general election. The initiative also allows local governments to require local licenses and to charge local licensing fees. And, of course, local governments will be able to apply the usual zoning regulations." Q: What would you say to someone who fears that this initiative is like Responsible Ohio's initiative? A: "It would be entirely inaccurate to claim that this initiative is like the failed initiative in First, the 2016 initiative is specific to medical marijuana and does not include broader legalization. Second, the 2016 initiative doesn't limit the number of growers. Third, the 2016 initiative doesn't pre-select who the growers will be." Q: Who do you think will oppose the 2016 initiative? A: "Those who generally oppose the idea of allowing seriously ill people to use medical marijuana will likely be opposed. It s hard to imagine why anyone who supports legal access to medical marijuana would choose prohibition over the commonsense system that we re proposing. If we don't pass this initiative, patients will either suffer without their medicine or be jailed for using their medicine."

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