Ohio’s new medical marijuana law recently took effect, on September 8, 2016. This law, passed by the Ohio legislature, followed a failed ballot initiative that would have legalized marijuana in Ohio for recreational use, as well. The new law permits doctors to prescribe marijuana as treatment for a lengthly list of ailments, but patients will not be able to purchase smokeable marijuana. Instead, the treatment must either be ingested via an edible product, absorbed through a skin patch, or “vaped.”
There is an extensive list of qualifying conditions: AIDS, Alzheimers, amyotrophic lateral sclerosis (also known as ALS and Lou Gehrig’s Syndrome), cancer, epilepsy, fibromyalgia, glaucoma, hepatitis C, multiple sclerosis, parkinson’s, chronic or intractable pain, HIV+, post-traumatic stress disorder, sickle cell anemia, spinal cord disease or injury, traumatic brain injury, ulcerative colitis, and inflammatory bowel disease, among others. There is also a mechanism to add diseases and conditions to the list.
Physicians must obtain a special certificate from the state medical board in order to recommend medical marijuana. Doctors also must have a bona fide doctor-patient relationship with persons for whom they write prescriptions. Doctors must provide an annual report describing their observations of the effectiveness of medical marijuana on their patients, and will have immunity from prosecution for recommending medical marijuana.
There is an extensive regulatory scheme set up for all parts of the value chain – retail dispensaries, growers, distributors, and laboratories.
Initially, the Ohio Supreme Court’s Board of Professional Conduct issued an opinion ruling that because marijuana was still illegal under federal law, attorney’s could not advise clients on how to properly set up and operate a business under the state medical marijuana law without violating their professional ethics. Since that opinion was issued in August, the state Supreme Court has amended the Rules of Professional Conduct to allow attorneys to advise clients on compliance with the new law.
Because marijuana is still illegal under federal law, new medical marijuana businesses will face difficulties with financial transactions. Banks may be reluctant to allow such businesses to open accounts, and the businesses may not be able to take payment by credit cards. This means a variety of transactions will necessarily be cash transactions. In addition, the IRS requires payroll taxes to be paid electronically, which will present a problem when paying employees. While the Department of Justice has said that its policy is not to interfere with medical marijuana if state law is effectively regulating the market, that may not be enough for traditionally conservative and risk-averse banks and merchant card processors.