OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 382 Bill Analysis
134th General Assembly
Click here for H.B. 382’s Fiscal Note
Version: As Introduced
Primary Sponsors: Reps. Weinstein and Upchurch
Effective Date:
Michael J. O’Neill, Division Chief
Nick Thomas, Research Analyst
Michael Hinel, Attorney
SUMMARY
Drug Offense Law changes
 Allows a person to legally cultivate up to 12 marihuana plants but requires the
cultivation area to not be open to public view and to be secured from unauthorized
access.
 Reduces the penalties for illegal cultivation of marihuana from a range of a fourth
degree misdemeanor to a first degree felony, depending on the circumstances, to a civil
infraction punishable by fines ranging from $500 to $2,000, making the violation a first
degree misdemeanor only if the offense involves more than 24 marihuana plants and is
habitual, willful, and for a commercial purpose, or involves violence.
 Allows a person to possess up to 5 ounces of marihuana or up to 15 grams of hashish.
 Reduces the penalties for the offense of possession of marihuana or hashish from a
range of a minor misdemeanor to a second degree felony, depending on the
circumstances, to minor misdemeanors accompanied by fines ranging from $100 to
$2,000.
 Repeals the offense of illegal use or possession of marihuana drug paraphernalia.
 Enacts a number of offenses involving marihuana that parallel the existing provisions
relating to sales of tobacco products to minors.
 Permits a person convicted of committing offenses covering certain marihuana-related
behavior decriminalized by the bill to apply to a court to expunge the records of those
convictions.
December 5, 2022
Office of Research and Drafting LSC Legislative Budget Office
Marihuana Establishment Law
 Requires the Department of Commerce to adopt rules as necessary to implement,
administer, and enforce the Marihuana Establishment Law.
 Authorizes the Department of Commerce to employ personnel and contract with
advisors and consultants, subject to conflict of interest limitations, and provides these
individuals with civil immunity for harm caused by the employee, advisor, or consultant
in the performance of their duties.
 Creates the Marijuana Regulatory Agency (MRA) within the Department of Commerce
and authorizes the MRA to issue marihuana establishment licenses and oversee the
Marihuana Establishment Law.
 Requires the MRA to adopt rules relating to the issuance of licenses, standards for
operation of marihuana establishments, oversight of the Marihuana Establishment Law
and permits the MRA to adopt rules relating to industrial hemp and for the issuance of
additional types or classes of state licenses to operate marihuana-related businesses.
 Prohibits the MRA from adopting rules that limit the number of state licenses, require a
purchaser to provide certain identifying information, prohibit shared locations and
facilities, or that are unreasonably impracticable.
 Establishes licenses for various types of marihuana establishments: marihuana growers,
marihuana safety compliance facilities, marihuana processors, marihuana
microbusinesses, marihuana retailers, and marihuana secure transporters.
 Establishes procedures and criteria for obtaining and renewing a marihuana
establishment license.
 Limits, for the first two years after the MRA begins to receive applications for marihuana
establishment licenses, the types of persons who may apply for a license to be a
marihuana grower, marihuana processor, marihuana microbusiness, marihuana retailer,
or a marihuana secure transporter, but permits the MRA to expand the applicant pool
after one year if certain criteria are met.
 Requires marihuana establishments to engage in certain activities, such as including
warning labels and taking specified security measures.
 Prohibits marihuana establishments from engaging in certain activities, including:
 Permitting the marihuana to be visible from a public place outside of the marihuana
establishment without the use of optical aids;
 Engaging in licensed activities at an unauthorized site;
 Refusing Department of Commerce representatives the right to inspect the licensed
premises during business hours or to audit the establishment’s books and records;
 Allowing a person under 21 to volunteer or work for the marihuana establishment;
P a g e |2 H.B. 382
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
 Selling or otherwise transferring marihuana that was not produced, distributed, and
taxed in compliance with the bill;
 Selling or otherwise transferring tobacco.
 Permits municipalities and townships to ban or limit the number of marihuana
establishments, impose certain other marihuana-related restrictions, and impose an
annual fee to defray the costs associated with the operation of the marihuana
establishments in the municipality or township.
 Permits municipalities and townships to issue local marihuana establishment licenses if
the Department of Commerce or MRA does not timely adopt relevant rules or begin
processing marijuana establishment license applications.
 Requires the Department of Commerce to hold at least four public meetings each
calendar year for the purpose of hearing complaints and receiving the views of the
public with respect to administration of the Marihuana Establishment Law.
 Requires the Department of Commerce to annually submit a report to the Governor
covering the previous year that includes the number of licenses issued, licensee
demographic information, enforcement and disciplinary actions taken against licensees,
and a statement of revenues and expenses.
Marihuana excise tax
 Levies an excise tax of 10% on a marihuana retailer’s or microbusiness’s gross receipts
from the sale of marihuana, except medical marihuana.
 Requires each marihuana retailer and microbusiness to file a return and pay the tax for
each calendar quarter in which the retailer or microbusiness has gross receipts from the
sale of marihuana.
 Imposes penalties or interest against any taxpayer who fails to file a return or pay the
tax.
 Distributes tax revenue first to cover administrative expenses, and then up to $20
million annually for two years for clinical trials researching the efficacy of marihuana in
treating the medical conditions of veterans and preventing veteran suicide.
 Distributes remaining tax revenue as follows:
 15% to municipalities with at least one marihuana store, allocated based on the
number of stores in each municipality;
 15% to counties with at least one marihuana store, allocated based on the number
of stores in each county;
 35% for primary and secondary (K-12) education;
 35% for the repair and maintenance of roads and bridges.
P a g e |3 H.B. 382
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
TABLE OF CONTENTS
Overview ......................................................................................................................................... 5
Drug Offense Law changes.............................................................................................................. 5
Illegal cultivation of marihuana................................................................................................... 5
Possession of marihuana/possession of controlled substances ................................................. 6
Illegal use or possession of drug paraphernalia .......................................................................... 9
Marihuana sales to underage persons ........................................................................................ 9
Illegal distribution of marihuana and marihuana products ................................................... 9
Permitting children to use marihuana or marihuana products ........................................... 10
Forfeiture .............................................................................................................................. 10
Affirmative defense – good faith mistake of age ................................................................. 11
Engaging in an illegal marihuana or marihuana product transaction scan .......................... 11
Definitions ................................................................................................................................. 13
Hemp excluded.......................................................................................................................... 14
Expungement ............................................................................................................................ 14
Application ............................................................................................................................ 14
Hearing and order................................................................................................................. 15
Application fee...................................................................................................................... 15
Definitions ................................................................................................................................. 16
Marijuana Establishment Law....................................................................................................... 17
Overview, purpose, and construction ....................................................................................... 17
Department of Commerce responsibilities ............................................................................... 19
Marijuana Regulatory Agency ................................................................................................... 19
Required rules ...................................................................................................................... 20
Optional rules ....................................................................................................................... 21
Prohibited rules .................................................................................................................... 21
Licensure ................................................................................................................................... 22
Types of state licenses for marihuana establishments ........................................................ 22
Procedure to obtain a state license...................................................................................... 22
Application ............................................................................................................................ 22
Criteria to approve a license................................................................................................. 23
Renewal of license ................................................................................................................ 24
Transition provisions ............................................................................................................ 25
Marihuana establishments........................................................................................................ 25
Required, permitted, and prohibited activities .................................................................... 25
Oversight ................................................................................................................................... 27
P a g e |4 H.B. 382
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
Local governments .................................................................................................................... 27
May ban or limit the number of establishments ................................................................. 27
Other permissible restrictions .............................................................................................. 28
Prohibited local restrictions ................................................................................................. 28
Annual fee............................................................................................................................. 28
Local licensure ...................................................................................................................... 29
Licensee must maintain a labor peace agreement ................................................................... 29
Court appointed individual to operate ..................................................................................... 29
Public hearings .......................................................................................................................... 30
Report to Governor ................................................................................................................... 30
Marihuana Regulatory Agency definitions ................................................................................ 30
Marihuana excise tax .................................................................................................................... 32
Returns and tax payments ........................................................................................................ 32
Refunds ...................................................................................................................................... 32
Penalties .................................................................................................................................... 33
Distribution of tax revenue and fees......................................................................................... 33
Registration with the Tax Commissioner .................................................................................. 34
Record keeping requirements ................................................................................................... 34
Auditing and assessments ......................................................................................................... 34
Exiting the business ................................................................................................................... 35
DETAILED ANALYSIS
Overview
The bill decriminalizes cultivation and use of limited amounts of marihuana by adults. It
also regulates the now-legal marihuana industry by requiring the licensing of the various
marihuana-related businesses involved in producing marihuana at retail establishments. Finally,
the bill imposes a 10% tax on the marihuana receipts of marihuana retailers and
microbusinesses.
Drug Offense Law changes
Illegal cultivation of marihuana
The bill allows a person to legally cultivate up to 12 marihuana plants by limiting the
application of the offense of illegal cultivation of marihuana to prohibit the cultivation of more
than 12 marihuana plants. The bill also explicitly excludes marihuana from the continuing
offense of illegal manufacture of drugs.
P a g e |5 H.B. 382
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
Under existing law, the penalty for illegal cultivation of marihuana ranges from a fourth
degree misdemeanor to a first degree felony, depending on the circumstances surrounding the
offense.1
Instead, under the bill, illegal cultivation of marihuana is generally a civil infraction,
punishable by a fine of up to $500 on a first offense, and by a fine of up to $1,000 on a second
offense. On a third offense, illegal cultivation of marihuana is a minor misdemeanor, punishable
by a fine of up to $2,000. And, if the offense involves more than 24 marihuana plants and is
habitual, willful, and for a commercial purpose, or involves violence, the violation is a first
degree mi