OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 354 Bill Analysis
135th General Assembly
Click here for H.B. 354’s Fiscal Note
Version: As Introduced
Primary Sponsor: Rep. Callender
Effective date:
Abby Gerty, Research Analyst
SUMMARY
 Invests authority of the administration of the Cannabis Control Law with the already-
existing Division of Marijuana Control (DMC) under the authority and direction of the
Superintendent of Marijuana Control.
 Revises home grow provisions by repealing the authority to transfer homegrown
cannabis, prohibiting third-parties from home growing cannabis on behalf of an
individual, and clarifying the definition of primary residence.
 Specifies that the smoking, vaporization, or combustion of cannabis is prohibited
wherever smoking is prohibited.
 Requires rules governing adult-use cannabis advertising to be “at least as stringent” as
state and federal law governing tobacco and alcohol advertisements.
 Levies taxes on adult-use cannabis and addresses the distribution of revenue derived
from those taxes.
 Creates the 9-8-8 Fund in the state treasury to be distributed only upon the request of,
or consultation with, the Director of Mental Health and Addiction Services.
DETAILED ANALYSIS
Cannabis Control Law
Under the Cannabis Control Law, enacted by petition and scheduled to take effect
December 7, 2023, the cultivation, processing, and dispensing of adult use cannabis is overseen
by the Division of Cannabis Control. Under the bill, oversight of adult-use cannabis is
transferred to the Division of Marijuana Control (DMC). DMC is currently responsible for the
oversight of medical marijuana and oversees 23 Level I cultivators (two of which are
provisional), 14 Level II cultivators (one of which is provisional), 46 processors (two of which are
December 11, 2023
Office of Research and Drafting LSC Legislative Budget Office
provisional), and 114 dispensaries (one of which is provisional). Currently there are
approximately 403,000 registered medical marijuana users in Ohio.1
The table below summarizes the bill’s changes to the Cannabis Control Law
Current Law H.B. 354
(R.C. Chapter 3780) (As Introduced)
Oversight
Establishes the Division of Cannabis Control Invests this authority with the already-existing
(DCC) within the Department of Commerce and Division of Marijuana Control (DMC) and specifies
grants DCC the authority to license, regulate, that DMC is under the purview of the Superintendent
investigate, and penalize adult-use cannabis of Marijuana Control (R.C. 3780.03(B), with
license holders and adult-use users conforming changes throughout R.C. Chapter 3780.).
(R.C. 3780.03(A) and (B)).
Home grow
Authorizes an adult-use consumer to cultivate, Maintains current law (R.C. 3780.29(A)).
grow, and possess up to six cannabis plants (not
more than 12 plants per-household) so long as
the plants are kept in a secured area that is not
visible from a public space (R.C. 3780.29(A)).
Allows home growers to transfer up to six plants Repeals authority to transfer homegrown marijuana
to another adult-use consumer without (R.C. 3780.29(A)(3)).
advertisement or remuneration
(R.C. 3780.29(A)(3)).
Requires home grow to take place at the adult- Similar to current law, but specifies that an
use consumer’s “primary residence,” i.e., the individual’s primary residence is presumed to be the
residence of an individual in which the residential address that appears in the following (in
individual’s habitation is fixed and to which, descending order):
whenever the person is absent, the person has
 The Individual’s Ohio voter registration;
the intention of returning (R.C. 3780.01(A)(33)
and 3780.29).  The individual’s driver’s license or government-
issued identification card;
 A deed, mortgage, lease, current home
owner’s or renter’s insurance declaration
page, or current real property tax bill in the
individual’s name;
1 Program Update: By the Numbers (PDF), November 2023, Division of Marijuana Control.
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As Introduced
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Current Law H.B. 354
(R.C. Chapter 3780) (As Introduced)
 A utility bill or receipt of utility installation in
the individual’s name;
 A paycheck or pay stub issued to the
individual that includes their address;
 The most current available bank statement
issued to the individual that includes the
individual’s primary residential address.
(R.C. 3780.01(A)(34).)
No provision. Explicitly prohibits a third-party from engaging in
home grow on behalf of another person
(R.C. 3780.29(C)(5)).
Use, possession, and transportation
Enables adult-use consumers to use, possess, Similar to current law, but prohibits any person from
purchase, process, transfer without selling, giving away, or otherwise transferring adult-
remuneration to another adult consumer, or use marijuana to any other person, except as
transport adult-use cannabis. authorized pursuant to a marijuana operator license
(R.C. 3780.01(A)(1) and 3780.36(A)). (R.C. 3780.01 and 3780.36).
Smoking, combustion, and vaporization
Smoking or combustion of adult-use cannabis is Similar to current law, but explicitly states that a
subject to the same limitations that apply to person is prohibited from smoking, vaporizing, or
smoking under continuing law (See R.C. Chapter using any other combustible adult-use cannabis
3794). product in an public place or place of employment in
which smoking is prohibited (R.C. 3780.36(D)(3)).
Dispensaries
No provision. Requires DMC to adopt rules prescribing policies,
procedures, and minimum standards for adult-use
dispensaries that ensure patients and caregivers
have sufficient access to medical marijuana
(R.C. 3780.03(B)(23)).
Packaging and labeling requirements
Requires dispensaries to only accept adult-use Maintains current law, but replaces the DCC with the
cannabis that has been prepackaged and labeled DMC and requires DMC packaging and labeling rules
in compliance with DCC rules to, at minimum, comply with federal child-resistant
(R.C. 3780.15(B)(2)). effectiveness standards. (R.C. 3780.03(B)(19);
R.C. 3780.15(B)(2), not in the bill).
P a g e |3 H.B. 354
As Introduced
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Current Law H.B. 354
(R.C. Chapter 3780) (As Introduced)
Advertising
Authorizes DCC to adopt reasonable standards Maintains current law, shifts rulemaking duties from
for adult-use cannabis that prevent DCC to DMC, and requires the rules to be “at least as
advertisements that are false, targeted towards stringent” as state and federal law governing tobacco
minors, promote excessive use, or promote and alcohol advertisements (R.C. 3780.21(A)).
illegal activity (R.C. 3780.21(A)).
Prohibits rules that require preapproval of Repeals the prohibition (R.C. 3780.21(B)).
advertisements or that overly burden the legitimate
commercial speech of license holders
(R.C. 3780.21(B)).
Enforcement
Allows the Attorney General to bring an action Repeals the authorization (Section 3).
to enforce the Cannabis Control Law upon
receiving a written request from DCC
(R.C. 3780.27).
No provision. Allows the OIU to assist the DMC in enforcing the
adult-use cannabis law (R.C. 3780.01, 3780.03,
3780.26, 3780.31, and 5502.13).
Cannabis Social Equity and Jobs Program
Establishes the Cannabis Social Equity and Jobs Retains the program but requires funds to be
Program within the Department of administered by counties through a grant program.
Development to provide financial assistance and Allows grant fund to be used for any purpose that
license application support to individuals most involves community engagement, economic
directly and adversely impacted by the development, or social programming.
enforcement of marijuana-related laws who are (R.C. 3780.19(G).)
interested in starting or working in cannabis
business entities (R.C. 3780.18 and 3780.19).
Employment
Requires that a person be considered to have Also specifies that such a person is ineligible to serve
been discharged from employment for just a waiting period or be paid unemployment benefits
cause under the Unemployment Compensation for the duration of the person’s unemployment
Law if the person is discharged for using (R.C. 3780.35).
cannabis in violation of the employer’s drug-free
workplace policy, zero-tolerance policy, or other
formal program or policy regulating cannabis
use (a person who is discharged for just cause is
P a g e |4 H.B. 354
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
Current Law H.B. 354
(R.C. Chapter 3780) (As Introduced)
disqualified from serving a waiting week or
receiving benefits under the Unemployment
Compensation Law for the duration of the
person’s unemployment unless an exception
applies) (R.C. 3780.35(B) and see R.C. 4141.29).
Adult-use cannabis excise tax
Rate: Imposes a 10% excise tax on the sale to Rate: Same as current law (R.C 3780.22).
consumers of adult-use marijuana
(R.C. 3780.22).
Revenue: Distributes revenue from the excise Revenue: Similar to current law, except reallocates
tax as follows: the 25% earmarked for the Department of Mental
Health and Addiction Services as follows:
 36% to the Department of Development’s
Cannabis Social Equity and Jobs Program;  12.5% to support the efforts of the
 36% for the benefit of municipal Department to oversee and administer the
corporations or townships that have adult- 9-8-8 suicide prevention and mental health
use dispensaries, based on the percentage crisis hotline system;
of tax attributable to each municipal  10% to support the efforts of county sheriffs
corporation or township; to provide mental health and addiction
 25% to support the efforts of the services in county jails;
Department of Mental Health and  2.5% to support efforts of the Department to
Addiction Services to alleviate substance develop the state’s mental health workforce
abuse and related research; (R.C. 3780.23).
 3% to support the operations of the
Division of Cannabis Control and to defray
the cost of the Department of Taxation in
administering the tax (R.C. 3780.23).
Cultivator gross receipts tax
No provision. Rate: Levies a 10% tax on the gross receipts of
licensed cultivators from the sale of adult-use
marijuana (R.C. 5755.02, and numerous conforming
sections).
Revenue distribution: Distributes revenue from the
cultivator gross receipts tax as follows:
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As Introduced
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Current Law H.B. 354
(R.C. Chapter 3780) (As Introduced)
 36% for use by Department of Rehabilitation
and Correction to provide grants to support
the construction and renovation of county
jails;
 36% to the county sheriffs of each county
with a cannabis processing or cultivation
facility, distributed on the basis of each such
county’s population;
 23% for use by the Attorney General to pay
for the continuing education and training of
peace officers and state troopers;
 5% for use by the Attorney General to
provide grants to crime victim assistance
programs (R.C. 5755.13).
Tax on illegal sales: No provision.
Current agricultural use value (CAUV)
No provision. Makes land used to cultivate adult-use marijuana
ineligible to be valued for property tax purposes as
other agricultural land pursuant to its CAUV
(R.C. 5713.30). (A similar exclusion already applies to
lands used to cultivate medical marijuana.)
Local jail funding program administration
No provision. Requires DRC to provide grants for local jail
construction and renovation using adult-use
marijuana gross receipts tax revenue pursuant to a
funding formula that ranks counties higher the lower
their property and sales tax revenues are relative to
other counties. Applications are requested from a
number of the highest ranking counties, with a needs
assessment then conducted for the applicants, and
selected projects are awarded a grant for at least
25% of the total project cost (R.C. 5120.81). (This
program is similar to one temporarily enacted in H.B.
33 of the 135th General Assembly that