Ohio Legislative Service Commission
Bill Analysis

Elizabeth Molnar and other LSC staff

Sub. H.B. 523*
131st General Assembly(As Reported by S. Government Oversight & Reform)
Reps.

Huffman, Schuring, Ramos, Brown, Celebrezze, Maag, Perales, Rogers, Ruhl, Terhar

BILL SUMMARY
Medical Marijuana Control Program

Requires that the Ohio Department of Commerce and State Board of Pharmacy
administer a Medical Marijuana Control Program.



Establishes the Medical Marijuana Advisory Committee and authorizes it to makerecommendations concerning the Medical Marijuana Control Program to the
Department of Commerce, Board of Pharmacy, and State Medical Board.



Abolishes the Advisory Committee five years and 30 days after the bill's effective
date.



Permits a patient, on the recommendation of a physician, to use medical marijuana
to treat a qualifying medical condition.

Authorizes the Board of Pharmacy to register patients and caregivers and to issue
licenses to medical marijuana retail dispensaries.



Authorizes the Department of Commerce to issue licenses to medical marijuana
cultivators, processors, and testing laboratories.



Authorizes the Medical Board to issue certificates to physicians seeking torecommend treatment with medical marijuana.

Prohibits the cultivation of medical marijuana for personal, family, or householduse.

* This analysis was prepared before the committee report appeared in the Senate Journal. Note that thelist of co-sponsors and the legislative history may be incomplete.

Prohibits the smoking or combustion of medical marijuana.

ZoningAuthorizes the legislative authority of a municipal corporation or a board oftownship trustees to adopt regulations to prohibit, or limit the number of, retaildispensaries.



Provides that agricultural use zoning limitations that apply to townships do notprohibit a township from regulating the location of retail dispensaries or prohibiting
the dispensaries from being located in the unincorporated territory of the township.

Prohibits a cultivator, processor, retail dispensary, or laboratory from being locatedor relocating within 500 feet of a school, church, public library, public playground,or public park.

Requires that the Department of Commerce or Board of Pharmacy specify whether alicense holder may remain in operation, must relocate, or have its license revoked
after a school, church, public library, public playground, or public park opens
within 500 feet of the license holder's premises.

Employment lawsProvides that nothing in the bill requires an employer to permit or accommodate an
employee's use, possession, or distribution of medical marijuana; prohibits anemployer from taking any adverse employment action an employer may take undercurrent law because of a person's use, possession, or distribution of medical
marijuana; or permits a person to sue an employer for taking an adverse
employment action related to medical marijuana.

Provides that nothing in the bill prohibits an employer from establishing andenforcing a drug testing policy, drug-free workplace policy, or zero-tolerance drug
policy or interferes with federal restrictions on employment, including U.S.
Department of Transportation regulations.

Considers a person who is discharged from employment because of the person's
medical marijuana use to have been discharged for just cause under the
Unemployment Compensation Law if the use violated an employer's drug-freeworkplace policy, zero-tolerance policy, or other formal program or policy
regulating medical marijuana use and thus ineligible for unemployment benefits,
which appears to be similar to current law.

Legislative Service Commission-2Sub. H.B. 523
As Reported by S. Government Oversight & Reform

Maintains the rebuttable presumption that an employee is ineligible for workers'
compensation if the employee was under the influence of marijuana and being
under the influence of marijuana was the proximate cause of the injury, regardless ofwhether the marijuana use is recommended by a physician.

Tax laws


Requires that land used to cultivate or process medical marijuana be taxed based onfair market value rather than current agricultural use value (CAUV).

Banking Services


Exempts a financial institution that provides financial services to a licensed
cultivator, processor, retail dispensary, or laboratory from any Ohio criminal law anelement of which may be proven by substantiating that a person provides financial
services to a person who possesses, delivers, or manufactures marijuana or
marijuana derived products, if the cultivator, processor, retail dispensary, or
laboratory is in compliance with the bill and the applicable Ohio tax laws.



Authorizes the Director of Commerce to adopt rules that establish a closed-loop
payment processing system under which the state creates accounts to be used only
by registered patients and caregivers at licensed retail dispensaries and by otherlicensed entities.

OARRS


Requires that a retail dispensary report to the Ohio Automated Rx Reporting System
when dispensing medical marijuana to a patient or caregiver.

TABLE OF CONTENTS
Medical marijuana background .................................................................................................. 5
Definition ................................................................................................................................ 6
Schedule II ............................................................................................................................. 6
Medical Marijuana Control Program ........................................................................................... 7
Program rules ........................................................................................................................ 7
Department rules ................................................................................................................ 8
Board of Pharmacy rules .................................................................................................... 8
Timeline ................................................................................................................................. 9
Medical Marijuana Advisory Committee ..................................................................................... 9
Appointments ........................................................................................................................10
Terms of membership ...........................................................................................................11
Chairperson, compensation, and meetings ...........................................................................11
Qualifying medical conditions ....................................................................................................11
Permissible forms and methods of medical marijuana...............................................................12
Tetrahydrocannabinol content ...............................................................................................13
Legislative Service Commission-3Sub. H.B. 523
As Reported by S. Government Oversight & Reform

Smoking prohibition...............................................................................................................13
Patient and caregiver registration ..............................................................................................13
Renewals ..............................................................................................................................14
Suspension, revocation, or refusal to renew ..........................................................................14
Authority to place medical marijuana under seal ...................................................................14
Patient identifying information ...............................................................................................15
Authority to use, possess, or administer medical marijuana ..................................................15
Possession limits ...............................................................................................................15
Protection from arrest and criminal prosecution .................................................................15
Affirmative defense............................................................................................................16
Operating a vehicle ...........................................................................................................17
Field sobriety test ..............................................................................................................17
Prohibition on caregiver use ..............................................................................................17
Parental rights and responsibilities ....................................................................................17
Transplant waiting list and other medical care ...................................................................17
Tenant protection ..............................................................................................................18
Patient reciprocity agreements ..........................................................................................18
Assistance for veteran or indigent patients ........................................................................19
Use, possession, or administration on federal land............................................................19
Forfeiture or seizure of patient or caregiver property .........................................................19
Physician certificate to recommend ...........................................................................................19
Renewals ..............................................................................................................................19
Physician discipline ...............................................................................................................20
Authority to recommend medical marijuana treatment ...........................................................20
Requirements when recommending medical marijuana treatment ........................................21
Physician immunity ...............................................................................................................21
Physician reporting requirements ..........................................................................................21
Continuing medical education ...............................................................................................21
Exemption for research physicians ........................................................................................22
Standard of care....................................................................................................................22
Prohibitions ...........................................................................................................................22
Furnishing medical marijuana ............................................................................................22
Issuing a recommendation to a family member or the physician's self ...............................23
Medical Board rulemaking .....................................................................................................23
Licensure of cultivators, processors, retail dispensaries, and laboratories.................................23
Conditions on eligibility for licensure......................................................................................24
Compliance with state tax laws..........................................................................................24
Criminal records check requirements ................................................................................25
Minority benchmarks .........................................................................................................25
Authority to suspend or revoke a license ...............................................................................26
Board of Pharmacy - summary suspension .......................................................................26
Authority to impose a civil penalty .........................................................................................27
Authority to inspect................................................................................................................27
Authority to place medical marijuana under seal – retail dispensaries ...................................27
Licensed cultivators...............................................................................................................28
Prohibition on personal, family, or household use..............................................................28
Prohibition on cultivation on public land .............................................................................28
Licensed processors .............................................................................................................28
Licensed retail dispensaries ..................................................................................................29
Patient identifying information ...........................................................................................29
Licensed laboratories ............................................................................................................29
Temporarily restricted to certain Ohio institutions of higher education ...............................30
Legislative Service Commission-4Sub. H.B. 523
As Reported by S. Government Oversight & ReformForfeiture or seizure of license holder property .....................................................................30
Other licensed professionals .................................................................................................30
Academic medical centers, state universities, and private research and development
organizations that engage in marijuana research ......................................................................30
Property tax valuation of land used to cultivate or process marijuana .......................................31
Township or municipal corporation may prohibit or limit number of retail dispensaries ..............32
Exemption for marijuana research .........................................................................................32
Zoning of retail dispensaries .....................................................................................................32
Proximity to school, church, or certain public places .................................................................33
Exemption for marijuana research .........................................................................................33
Employment laws ......................................................................................................................34
Employment – generally ........................................................................................................34
Unemployment eligibility........................................................................................................35
Workers' compensation – rebuttable presumption .................................................................35
Eligibility ............................................................................................................................35
Rebuttable presumption – current law ...............................................................................35"Safe harbor" for the provision of banking services ...................................................................37
Closed-loop payment processing system ..........................................................................38OARRS .....................................................................................................................................39
Reporting to OARRS .............................................................................................................39
Access to patient information ................................................................................................39
Board of Pharmacy reports ...................................................................................................39
Confidentiality of OARRS information....................................................................................40
Conforming changes .............................................................................................................40
Monitoring database .................................................................................................................40
Toll-free hotline .........................................................................................................................41
Legislative intent .......................................................................................................................41
Reclassification of marijuana .................................................................................................41

CONTENT AND OPERATION
Medical marijuana background
Current Ohio and federal law classify marijuana as a schedule I controlled
substance, making its distribution, including by prescription, illegal. However,according to the National Conference of State Legislatures, 24 states allow forcomprehensive public medical marijuana and cannabis programs.1 Since 2009, theUnited States Department of Justice (DOJ) has encouraged federal prosecutors not toprosecute those who distribute marijuana for medical purposes in accordance with statelaw. In 2013, the DOJ updated its policy, noting that it will defer the right to challenge

1 National

Conference of State Legislatures, State Medical Marijuana<http://www.ncsl.org/research/health/state-medical-marijuana-laws.aspx>.
Legislative Service Commission

Laws,

availableat-5Sub. H.B. 523
As Reported by S. Government Oversight & Reformstate laws legalizing marijuana for medical purposes so long as the states strongly
enforce their own laws.2
Definition
Under the bill, marijuana has the same meaning as marihuana, as defined under
existing Ohio law.3 Current law defines "marihuana" as all parts of a plant of the genus
cannabis, whether growing or not; the seeds of a plant of that type; the resin extracted
from a part of a plant of that type; and every compound, manufacture, salt, derivative,
mixture, or preparation of a plant of that type or of its seeds or resin.4 "Marihuana" does
not include the mature stalks of the plant, fiber produced from the stalks, oils or cakemade from the seeds of the plant, or any other compound, manufacture, salt, derivative,
mixture, or preparation of the mature stalks, except the resin extracted from the mature
stalks, fiber, oil or cake, or the sterilized seed of the plant that is incapable ofgermination.5
The bill defines "medical marijuana" as marijuana that is cultivated, processed,
dispensed, tested, possessed, or used for a medical purpose.6
Schedule II
Although marijuana is classified as a schedule I controlled substance, for the
purposes of this bill, medical marijuana is a schedule II controlled substance. 7
According to the U.S. Drug Enforcement Administration, a schedule I controlled
substance has all of the following characteristics: no currently accepted medical use, alack of accepted safety for use under medical supervision, and a high potential forabuse. A schedule II controlled substance is considered to have a high potential forabuse.8

2 See <https://www.justice.gov/opa/pr/justice-department-announces-update-marijuana-enforcement-

policy>.
3 R.C. 3796.01.
4 R.C. 3719.01.
5 Id.
6 R.C. 3796.01.
7 Id.
8 See <http://www.deadiversion.usdoj.gov/schedules/>.

Legislative Service Commission-6Sub. H.B. 523
As Reported by S. Government Oversight & ReformMedical Marijuana Control Program
The bill requires that the Department of Commerce and State Board of Pharmacy
establish a Medical Marijuana Control Program to provide for the following:9(1) The licensure of medical marijuana cultivators, processors, and retaildispensaries;(2) The registration of patients and caregivers;(3) The licensure of laboratories that test medical marijuana.
Under the bill, the Department of Commerce is responsible for the licensure ofcultivators, processors, and testing laboratories, while the Board of Pharmacy is charged
with the licensure of retail dispensaries and the registration of patients and caregivers.
In the case of physicians, the State Medical Board is to issue certificates to those seeking
to recommend treatment with medical marijuana.10
Program rules
Not later than one year after the bill's effective date, the Department ofCommerce and Board of Pharmacy must separately adopt rules establishing standards
and procedures for the portions of the Program each is responsible for administering. 11
The rules must be adopted in accordance with the Administrative Procedure Act and do
all of the following:(1) Establish application procedures and fees for licenses and registrations;(2) Specify the conditions that must be met to be eligible for licensure;(3) Establish a license or registration renewal schedule, renewal procedures, andrenewal fees;(4) Specify reasons for which a license or registration may be suspended,
including without prior hearing, revoked, or may not be renewed or issued andreasons for which a civil penalty may be imposed on a license holder;

9 R.C. 3796.02.
10 R.C. 4731.30.
11 R.C. 3796.03 and 3796.04.

Legislative Service Commission-7Sub. H.B. 523
As Reported by S. Government Oversight & Reform(5) Establish standards under which a license or registration suspension may belifted;(6) Specify whether a license holder may remain in operation, must relocate, or
have its license revoked if a school, church, public library, public playground, or publicpark is established within 500 feet of the premises of a license holder.
(7) Specify (a) the criminal offenses for which an applicant will be disqualified
from licensure and for which a person will be disqualified from employment with alicense holder and (b) which of those criminal offenses are not disqualifiers if theapplicant or person seeking employment was convicted of or pleaded guilty to theoffense more than five years before the date the application is filed or the employment
begins.
Department rules

The bill requires that the Department adopt rules regarding the licensure ofcultivators not later than 240 days after the bill's effective date.
The Department also must adopt rules establishing the number of cultivator
licenses permitted at any one time and the standards and procedures for the testing of
medical marijuana. With respect to the number of cultivator licenses, the Board must
consider Ohio's population and the number of patients seeking to use medical
marijuana.
In the case of medical marijuana testing, the Department must do all of thefollowing:(1) Specify when testing must be conducted;(2) Determine the minimum amount of medical marijuana that must be tested;(3) Specify the manner in which testing is to be conducted in an effort to ensure
uniformity of medical marijuana products processed for and dispensed to patients;(4) Specify the manner in which test results are provided.
Board of Pharmacy rules

The Board of Pharmacy must adopt rules that do all of the following:(1) Establish procedures for the registration of patients and caregivers andrequirements that must be met to be eligible for registration;

Legislative Service Commission-8Sub. H.B. 523
As Reported by S. Government Oversight & Reform(2) Establish procedures for the issuance of patient or caregiver registration
cards;(3) Establish training requirements for employees of retail dispensaries;(4) Establish a program to assist patients who are veterans or indigent in
obtaining medical marijuana in accordance with the bill's provisions;(5) Specify the forms of or methods of using medical marijuana that are attractive
to children;(6) Specify, by form and tetrahydrocannabinol content, a maximum 90 day
supply of medical marijuana that may be possessed;(7) Specify the paraphernalia or other accessories that may be used in theadministration to a registered patient of medical marijuana;(8) Establish the number of retail dispensary licenses that will be permitted at
any one time.
When establishing the number of retail dispensary licenses, the Board of
Pharmacy must consider Ohio's population, the number of patients seeking to use
medical marijuana, and the geographic distribution of dispensary sites in an effort toensure patient access to medical marijuana.
The bill also authorizes the Department and Board of Pharmacy to separately
adopt any other rules each considers necessary for the portions of the Program each is
responsible for administering and for the implementation and enforcement of the bill's
provisions. When adopting any rules regarding the Program, the Department andBoard must each consider standards and procedures that have been found to be bestpractices relative to the use and regulation of medical marijuana.
Timeline
The bill requires that the Department of Commerce and Board of Pharmacy takeall actions necessary to ensure that the Program is fully operational not later than two
years after the bill's effective date.12

Medical Marijuana Advisory Committee
The bill establishes the Medical Marijuana Advisory Committee and authorizes it
to develop and submit to the Department of Commerce, Board of Pharmacy, and
12 Section 3.

Legislative Service Commission-9Sub. H.B. 523
As Reported by S. Government Oversight & ReformMedical Board any recommendations related to the Medical Marijuana Control
Program.13 Under the bill, the Committee ceases to exist five years and thirty days after
the bill's effective date.
The Committee consists of the following 14 members:(1) Two members who are practicing pharmacists, at least one of whom supports
the use of marijuana for medical purposes and at least one of whom is a member of theBoard of Pharmacy;(2) Two members who are practicing physicians, at least one of whom supports
the use of marijuana for medical purposes and at least one of whom is a member of theState Medical Board;(3) A member who represents local law enforcement;(4) A member who represents employers;(5) A member who represents labor;(6) A member who represents persons involved in mental health treatment;(7) A member who is a nurse;(8) A member who represents caregivers;(9) A member who represents patients;(10) A member who represents agriculture;(11) A member who represents persons involved in the treatment of alcohol anddrug addiction;(12) A member who engages in academic research.
Appointments
Appointments to the Committee must be made not later than 30 days after the
bill's effective date. Not more than six members may be of the same political party. The
Governor appoints the physician and pharmacist members along with the members
who represent employers, agriculture, and persons involved in the treatment of drug
and alcohol addiction. The Senate President appoints the member representing local

13 R.C. 3796.021.

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As Reported by S. Government Oversight & Reformlaw enforcement and the member representing caregivers, while the Senate Minority
Leader appoints the member who is a nurse. The Speaker of the House ofRepresentatives appoints the member representing patients and the member who
represents persons involved in mental health treatment. The House Minority Leader
appoints the member representing persons involved in mental health treatment.
Terms of membership
Each member serves from the date of appointment until the Committee ceases toexist, except that members serve at the pleasure of the appointing authority. Vacancies
are to be filled in the same manner as original appointments.
Chairperson, compensation, and meetings
The Governor is to select a member of the Committee to serve as its chairperson.
Each member receives a per diem compensation set by the Director of the Ohio
Department of Administrative Services,14 as well as actual and necessary travel
expenses in connection with committee meetings and business.
Under the bill, the Committee must hold its initial meeting not later than 30 days
after the last member of the Committee is appointed. The bill specifies that theCommittee is not subject to the law governing the sunset review of agencies.15

Qualifying medical conditions
The bill provides that medical marijuana may be recommended only for thetreatment of a qualifying medical condition.16 Under the bill, all of the following are
qualifying medical conditions: AIDS, amyotrophic lateral sclerosis, Alzheimer's disease,cancer, chronic traumatic encephalopathy, Crohn's disease, epilepsy or another seizure
disorder, fibromyalgia, glaucoma, hepatitis C, inflammatory bowel disease, multiple
sclerosis, pain that is either chronic and severe or intractable, Parkinson's disease,
positive status for HIV, post-traumatic stress disorder, sickle cell anemia, spinal corddisease or injury, Tourette's syndrome, traumatic brain injury, and ulcerative colitis. 17

14 R.C. 124.15.
15 See R.C. 101.82 to 101.87.
16 R.C. 4731.30.
17 R.C. 3796.01.

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As Reported by S. Government Oversight & Reform

The bill also authorizes an individual to petition the Medical Board to add a
disease or condition to the list of qualifying medical conditions. 18 When reviewing apetition, the Medical Board must do all of the following:(1) Consult with one or more experts who specialize in the study of the disease orcondition;(2) Review any relevant medical or scientific evidence pertaining to the diseaseor condition;(3) Consider whether conventional medical therapies are insufficient to treat or
alleviate the disease or condition;(4) Review evidence supporting the use of medical marijuana to treat or alleviate
the disease or condition;(5) Review any letters of support provided by physicians with knowledge of thedisease or condition, including any letter provided by a physician treating thepetitioner.
Following its review, the Medical Board must either approve or deny thepetition.

Permissible forms and methods of medical marijuana
The bill permits only the following forms of medical marijuana: oils, tinctures,plant material, edibles, patches, and any other form approved by the Board of
Pharmacy. The bill prohibits any form or method considered attractive to children, as
specified in rules adopted by the Board.19
Under the bill, an individual may petition the Board of Pharmacy to approve anadditional form or method of using medical marijuana. On receipt of a petition, theBoard must consult with one or more scientific experts and review any relevantscientific evidence. The Board must then approve or deny the petition.20

18 R.C. 4731.302.
19 R.C. 3796.04 and 3796.06.
20 R.C. 3796.061.

Legislative Service Commission-12Sub. H.B. 523
As Reported by S. Government Oversight & ReformTetrahydrocannabinol content
The bill specifies that plant material have a tetrahydrocannabinol (THC) content
of not more than 35%, while extracts have a THC content of not more than 70%.21
Smoking prohibition
The bill expressly prohibits the use of medical marijuana by smoking or
combustion, but allows for vaporization.22

Patient and caregiver registration
A patient seeking to use medical marijuana or a caregiver seeking to assist apatient in the use of medical marijuana must apply to the Board of Pharmacy forregistration.23 The physician who holds a certificate to recommend issued by the
Medical Board and is treating the patient must submit the application on the patient's or
caregiver's behalf in the manner established in rules adopted by the Board.
An application must include a statement from the physician certifying all of thefollowing:(1) That a bona fide physician-patient relationship exists between the physician
and patient;(2) That the patient has been diagnosed with a qualifying medical condition;(3) That the physician or physician's delegate has requested from the Board of
Pharmacy's Ohio Automated Rx Reporting System (OARRS) a report of information
related to the patient that covers at least the 12 months immediately preceding the dateof the report;(4) That the physician has informed the patient of the risks and benefits ofmedical marijuana as it pertains to the patient's qualifying medical condition andmedical history;(5) That the physician has informed the patient that it is the physician's opinion
that the benefits of medical marijuana outweigh its risks.

21 R.C. 3796.06.
22 R.C. 3796.06.
23 R.C. 3796.08.

Legislative Service Commission-13Sub. H.B. 523
As Reported by S. Government Oversight & ReformIn the case of a patient, the application must also include the name or names ofthe one or more caregivers that will assist the patient in the use or administration of
medical marijuana. In the case of a caregiver, the application also must include thename of the patient or patients that the caregiver seeks to assist.
If the application is complete and meets the requirements established in rules,
the Board of Pharmacy must register the patient or caregiver and issue to the patient or
caregiver an identification card.
Renewals
A registration expires according to the renewal schedule established in rule andmay be renewed in accordance with procedures established in those rules.
Suspension, revocation, or refusal to renew
The bill authorizes the Board of Pharmacy to suspend, including without priorhearing, revoke, or refuse to renew or issue a registration for any of the reasonsspecified in rules adopted by the Board.24 Any action to suspend, revoke, or refuse to
renew a registration must be taken in accordance with the Administrative Procedure
Act.25 The bill provides that the Board of Pharmacy may utilize a telephone conference
call to review any allegations and take a vote.
Authority to place medical marijuana under seal
The bill authorizes the Board of Pharmacy to place under seal all medical
marijuana owned by or in the possession, custody, or control of a registered patient or
caregiver if the Board does all of the following:(1) Suspends, revokes, or refuses to renew the patient's or caregiver's registration;(2) Determines that there is clear and convincing evidence of a danger of
immediate and serious harm to any person.26
The Board must not dispose of the medical marijuana placed under seal until theregistrant exhausts all appeal rights under the Administrative Procedure Act. The court
involved in the appeal may order the Board, during the pendency of the appeal, to sell
medical marijuana that is perishable. The Board must deposit the sale's proceeds withthe court.
24 R.C. 3796.04 and 3796.14.
25 R.C. Chapter 119.
26 R.C. 3796.15.

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As Reported by S. Government Oversight & Reform

Patient identifying information
The bill prohibits the Board of Pharmacy from making public any information
reported to or collected by it for the purposes of registering patients or caregivers that
identifies or would tend to identify any specific patient.27
The bill also provides that information collected by the Board as part of theregistration process is confidential and is not a public record. The bill permits the Board
to share identifying information with a licensed retail dispensary for the purpose ofconfirming that a person has a valid registration. The bill also allows information that
does not identify a person to be released in summary, statistical, or aggregate form.
Authority to use, possess, or administer medical marijuana
The bill authorizes a registered patient to use or possess medical marijuana or
possess any paraphernalia or accessories specified in Board of Pharmacy rules. The bill
authorizes a caregiver to possess or assist a registered patient in the use oradministration of medical marijuana or possess any paraphernalia or accessories
specified in Board of Pharmacy rules.28
Possession limits

Under the bill, the amount of medical marijuana possessed by a registeredpatient or caregiver must not exceed a 90-day supply, as specified in Board of Pharmacy
rules. In the case of a registered caregiver who provides care to more than one
registered patient, the caregiver must maintain separate inventories of medical
marijuana for each patient.29
Protection from arrest and criminal prosecution

The bill provides that a registered patient or caregiver is not subject to arrest or
criminal prosecution for any of the following actions done in accordance with the bill's
provisions:(1) In the case of a registered patient, using medical marijuana;(2) Obtaining or possessing medical marijuana;(3) Possessing specified paraphernalia or accessories;

27 R.C. 3796.08.
28 R.C. 3796.22 and 3796.23.
29 R.C. 3796.22 and 3796.23.

Legislative Service Commission-15Sub. H.B. 523
As Reported by S. Government Oversight & Reform(4) In the case of a registered caregiver, assisting a registered patient in the use oradministration of medical marijuana.
Affirmative defense

The bill establishes for a patient, under specified conditions, an affirmative
defense to a criminal charge of knowingly obtaining, possessing, or using marijuana
and to a criminal charge of knowingly using or possessing marijuana drug
paraphernalia.30 It also extends the affirmative defense to a parent or guardian of aminor patient.
To raise the affirmative defense established under the bill, a physician must haveissued a written recommendation for the patient certifying all of the following:(1) That a bona fide physician-patient relationship exists between the physician
and patient;(2) That the patient has been diagnosed with a qualifying medical condition;(3) That the physician or physician delegate requested from OARRS a report of
information related to the patient that covers at least the 12 months immediately
preceding the date of the report;(4) That the physician has informed the patient or the patient's parent or
guardian that it is the physician's opinion that the benefits of medical marijuana
outweigh its risks.
Additionally, the patient must have used or possessed medical marijuana or theparent or guardian must have possessed medical marijuana only in a form or method in
accordance with the bill's provisions.
The bill specifies that the affirmative defense may be raised only for conduct
occurring on or after the bill's effective date, but not later than 60 days after the Board of
Pharmacy begins accepting applications for patient or caregiver registrations.
The bill also provides that it does not establish for a parent or guardian of apatient an affirmative defense to a criminal charge relating to the use of medical
marijuana, unless the parent or guardian is also a patient who meets the foregoing
requirements.

30 Section 7 and R.C. 2925.11 and 2925.141.

Legislative Service Commission-16Sub. H.B. 523
As Reported by S. Government Oversight & Reform

Operating a vehicle

The bill does not authorize a registered patient to operate a vehicle, streetcar,
trackless trolley, watercraft, or aircraft while under the influence of medical marijuana. 31
Field sobriety test

The bill provides that a person's status as a registered patient or caregiver is not a
sufficient basis for conducting a field sobriety test on the person or for suspending theperson's driver's license. The bill specifies that to conduct a field sobriety test, a law
enforcement officer must have an independent, factual basis giving reasonablesuspicion that the person is operating a vehicle under the influence of marijuana or witha prohibited concentration of marijuana in the person's whole blood, blood serum,plasma, breath, or urine.32
Prohibition on caregiver use

The bill prohibits a registered caregiver from using medical marijuana, unless the
caregiver is also a registered patient.33
Parental rights and responsibilities

The bill provides that, unless there is clear and convincing evidence that a childis unsafe, the use, possession, or administration of medical marijuana by a registeredpatient in accordance with the bill's provisions cannot be the sole or primary basis forany of the following:(1) An adjudication determining that a child is an abused, neglected, or
dependent child;(2) An allocation of parental rights and responsibilities;(3) A parenting time order.34
Transplant waiting list and other medical care

The bill provides that the use or possession of medical marijuana by a registeredpatient in accordance with the bill's provisions cannot be used as a reason for
31 R.C. 3796.22.
32 R.C. 3796.24.
33 R.C. 3796.23.
34 R.C. 2151.28, not in the bill, 3109.04, not in the bill, 3109.051, not in the bill, 3109.12, not in the bill, and3796.24.
Legislative Service Commission-17Sub. H.B. 523
As Reported by S. Government Oversight & Reformdisqualifying the patient from medical care or from including the patient on atransplant waiting list.35
Tenant protection

The bill provides that a person's status as a registered patient or caregiver is not
to be used as the sole or primary basis for rejecting the person as a tenant, unless therejection is required by federal law.36
Patient reciprocity agreements

The bill requires that the Board of Pharmacy attempt in good faith to negotiate
and enter into reciprocity agreements with other states under which medical marijuanaregistry identification cards or equivalent authorizations issued by the other states arerecognized in Ohio.37
Before entering into an agreement with another state, the Board must determinethat both of the following apply:(1) The eligibility requirements imposed by the other state in order to obtain aregistry identification card are substantively comparable to Ohio's requirements;(2) The other state recognizes a patient or caregiver registration andidentification card issued under the bill's provisions.
If a reciprocity agreement is reached with another state, the card or equivalentauthorization issued by the other state is recognized and accepted as valid in Ohio. It
grants the patient or caregiver the same right to use, possess, obtain, or administer
medical marijuana in Ohio as a patient or caregiver registered in accordance with thebill's provisions.
The bill grants the Board authority to adopt rules as necessary to implement thebill's provisions regarding reciprocity agreements.

35 R.C. 3796.24.
36 R.C. 3796.24.
37 R.C. 3796.16.

Legislative Service Commission-18Sub. H.B. 523
As Reported by S. Government Oversight & Reform

Assistance for veteran or indigent patients

The bill requires that the Board of Pharmacy establish a program to assist
patients who are veterans or indigent in obtaining medical marijuana.38
Use, possession, or administration on federal land

The bill specifies that it does not permit the use, possession, or administration of
medical marijuana on federal land located in Ohio.39
Forfeiture or seizure of patient or caregiver property

The bill provides that the use, possession, or administration of medical marijuanain accordance with the bill's provisions cannot be used as the sole or primary reason fortaking any action under any criminal or civil statute in the forfeiture or seizure of any
property or asset.40

Physician certificate to recommend
A physician seeking to recommend treatment with medical marijuana must
apply to the State Medical Board for a certificate to recommend.41 An application mustbe submitted in a manner established in rules adopted by the Medical Board.42 The
Medical Board must issue a certificate to recommend if both of the following conditions
are met:(1) The application is complete and meets the requirements established in rules;(2) The applicant demonstrates that he or she does not have an ownership or
investment interest in, or a compensation arrangement with, a licensed cultivator,
processor, laboratory, or retail dispensary or an applicant for licensure.
Renewals
A registration expires according to the renewal schedule established in rules
adopted by the Medical Board and may be renewed in accordance with the procedures
established in those rules.

38 R.C. 3796.04.
39 R.C. 3796.24.
40 R.C. 3796.24.
41 R.C. 4731.30.
42 R.C. 4731.301.

Legislative Service Commission-19Sub. H.B. 523
As Reported by S. Government Oversight & ReformPhysician discipline
In the event a physician fails to comply with the bill's requirements, the bill
authorizes the Medical Board to take the same disciplinary actions against thephysician's certificate to recommend as against a certificate to practice. 43 These include
the suspension or revocation of or the refusal to renew the certificate.
The bill also authorizes the Medical Board to impose on a physician holding acertificate to recommend a civil penalty in an amount not to exceed $20,000. The Board
must do so pursuant to an adjudication and an affirmative vote of at least six Board
members.44
The bill specifies that any disciplinary action taken against a physician's
certificate to practice operates automatically on the physician's certificate torecommend. The action taken on the certificate to recommend remains in effect for as
long as the disciplinary action remains in effect on the certificate to practice.45
Authority to recommend medical marijuana treatment
A physician who holds a certificate to recommend may recommend that apatient be treated with medical marijuana if the patient has been diagnosed with aqualifying medical condition (see "Qualifying medical condition" above) and a bonafide physician-patient relationship has been established through all of the following:(1) An in-person physical examination of the patient by the physician;(2) A review of the patient's medical history by the physician;(3) An expectation of providing care and receiving care on an ongoing basis.
The bill also requires that the physician both request a report of information
related to the patient from OARRS that covers at least the 12 months immediately
preceding the date of the report and review the report.
In the case of a patient who is a minor, the physician may recommend treatment
with medical marijuana only after obtaining the consent of a parent or another person
responsible for providing consent to treatment.46

43 R.C. 4731.22.
44 R.C. 4731.225, not in the bill.
45 R.C. 4731.229.
46 R.C. 4731.30.

Legislative Service Commission-20Sub. H.B. 523
As Reported by S. Government Oversight & ReformRequirements when recommending medical marijuana treatment
When issuing a written recommendation to a patient, the physician must specify
any information required in rules adopted by the Medical Board.
A written recommendation issued in accordance with the bill's provisions isvalid for a period of not more than 90 days. The physician may renew therecommendation for not more than three additional periods of not more than 90 days.
Thereafter, the physician may issue another recommendation to the patient only upon aphysical examination of the patient.47
Physician immunity
The bill provides that a physician is immune from civil liability and is not subject
to professional disciplinary action or criminal prosecution for any of the following:(1) Advising a patient or caregiver about the risks and benefits of medical
marijuana;(2) Recommending that a patient use medical marijuana;(3) Monitoring a patient's treatment with medical marijuana.48
Physician reporting requirements
Annually, each qualifying physician must submit to the Medical Board a reportthat describes the physician's observations regarding the effectiveness of medical
marijuana in treating his or her patients. The report is limited to observations
concerning patients treated during the year covered by the report.49
Continuing medical education
The bill requires that each physician holding a certificate to recommend annuallycomplete at least two hours of continuing medical education in medical marijuana
approved by the State Medical Board.50
The bill further requires that the Board approve one or more continuing medical
education courses of study that assist physicians in both of the following:
47 R.C. 4731.30.
48 R.C. 4731.30.
49 R.C. 4731.30.
50 R.C. 4731.30.

Legislative Service Commission-21Sub. H.B. 523
As Reported by S. Government Oversight & Reform(1) Diagnosing qualifying medical conditions;(2) Treating qualifying medical conditions with medical marijuana.
The Board may approve a course or courses of study certified by the Ohio State
Medical Association or the Ohio Osteopathic Association.
Exemption for research physicians
The bill exempts from the certificate to recommend requirement a physician who
recommends treatment with marijuana or a drug derived from marijuana under any of
the following that is approved by an investigational review board or equivalent entity,
the U.S. Food and Drug Administration, or the National Institutes of Health or one of its
cooperative groups or centers under the U.S. Department of Health and Human
Services:(1) A research protocol;(2) A clinical trial;(3) An investigational new drug application;(4) An expanded access submission.51
Standard of care
The bill requires that the Medical Board adopt rules establishing for physicians
the minimal standards of care when recommending treatment with medical
marijuana.52
Prohibitions
Furnishing medical marijuana

The bill prohibits a physician from personally furnishing or otherwise dispensing
medical marijuana.53

51 R.C. 4731.30.
52 R.C. 4731.301.
53 R.C. 4731.30.

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As Reported by S. Government Oversight & Reform

Issuing a recommendation to a family member or the physician's self

The bill prohibits a physician from issuing a recommendation for medical
marijuana for a family member or the physician's self.54
Medical Board rulemaking
Not later than one year after the bill's effective date, the Medical Board must
adopt rules establishing all of the following:(1) The procedures when applying for a certificate to recommend;(2) The conditions that must be met to be eligible for a certificate to recommend;(3) The schedule and procedures for renewing a certificate to recommend;(4) The reasons for which a certificate may be suspended or revoked;(5) The standards under which a certificate suspension may be lifted.55
The rules must be adopted in accordance with the Administrative Procedure
Act.

56

The bill also provides that the Medical Board may adopt any other rules it
considers necessary, which may include rules specifying the information that must be
included in a written recommendation.

Licensure of cultivators, processors, retail dispensaries, and laboratories
An entity that seeks a license to cultivate or process medical marijuana or to
conduct laboratory testing of medical marijuana must file an application for licensurewith the Department of Commerce. An entity that seeks a license to dispense medical
marijuana at retail must file an application with the Board of Pharmacy. An application
for a cultivator, processor, or laboratory license must be submitted in accordance withrules adopted by the Department of Commerce, while an application for a retaildispensary license must be submitted in accordance with rules adopted by the Board of

54 R.C. 4731.30.
55 R.C. 4731.301.
56 R.C. Chapter 119.

Legislative Service Commission-23Sub. H.B. 523
As Reported by S. Government Oversight & ReformPharmacy.57 Each entity must submit an application for each location from which it
seeks to operate.
Conditions on eligibility for licensure
A license will be issued to an applicant if all of the following conditions are met:
(1) The applicant demonstrates that it does not have an ownership or investment
interest in, or compensation arrangement with, a laboratory licensed by the Departmentof Commerce or with an applicant for a license to conduct laboratory testing;(2) The applicant demonstrates that it will not be located within 500 feet of aschool, church, public library, public playground, or public park;(3) The report of each criminal records check conducted demonstrates that theperson subject to the check is not disqualified because of a conviction or guilty plea toan offense specified in rules;(4) The information provided to the Department or Board of Pharmacy by the
Ohio Department of Taxation demonstrates that the applicant is in compliance withstate tax laws;(5) The applicant meets all other licensure eligibility conditions established inrules.

58

Compliance with state tax laws

The bill requires the Department of Taxation to provide, on the request of the
Department of Commerce or Board of Pharmacy, all of the following information
regarding an applicant for licensure:(1) Whether the applicant is in compliance with applicable state tax laws;(2) Any past or pending violation by the applicant of those tax laws and any
penalty imposed on the applicant for the violation.59
The bill provides that the Department of Commerce or Board can request
information only as it pertains to an application for licensure that the Department orBoard, as applicable, is reviewing. The Department of Taxation may charge the57 R.C. 3796.09 and 3796.10.
58 R.C. 3796.09, 3796.10, and 3796.11.
59 R.C. 3796.11.

Legislative Service Commission-24Sub. H.B. 523
As Reported by S. Government Oversight & ReformDepartment of Commerce or Board a reasonable fee to cover the administrative cost ofproviding the information.
The bill specifies that the information received is confidential and provides thatthe Department of Commerce or Board cannot make the information available to any
person other than the applicant for licensure.
Criminal records check requirements
For prospective licensees

As part of the application process, each of the following individuals associatedwith an entity seeking licensure must complete a criminal records check:(1) An administrator or other person responsible for the daily operation of theentity;(2) An owner or prospective owner, officer or prospective officer, or board
member or prospective board member of the entity.60
The process for completing a criminal records check provided for in the bill is thesame process that applies to certain professionals under existing law.61 The Department
and Board of Pharmacy are required to specify in rule the offenses that disqualify anapplicant from licensure (see "Program rules" above). If an individual subject to thecriminal records check requirement fails to complete the check, the Department orBoard of Pharmacy must deny the entity's application for licensure.
For employees of licensees

The bill requires that each person seeking employment with a licensed cultivator,
processor, laboratory, or retail dispensary complete a criminal records check.62 It also
prohibits a license holder from employing a person unless the person complies with thecriminal records check requirement and the check demonstrates that the person is notdisqualified because of a conviction or guilty plea to an offense specified in rules.
Minority benchmarks

The bill requires that the Department of Commerce and Board of Pharmacy eachissue not less than 15% of licenses to entities that are owned or operated by individuals
who are members of one of the following economically disadvantaged groups:

60 R.C. 3796.12.
61 R.C. 109.572.
62 R.C. 3796.13, 4776.01, 4776.02, 4776.03, and 4776.04.

Legislative Service Commission-25Sub. H.B. 523
As Reported by S. Government Oversight & Reform(1) Blacks or African-Americans;(2) American Indians;(3) Hispanics or Latinos;(4) Asians.
However, if no applications or an insufficient number of applications are
submitted by entities that meet the conditions for licensure, the Department and Boardof Pharmacy each must issue licenses according to usual procedures.63
Authority to suspend or revoke a license
The bill authorizes the Department of Commerce or Board of Pharmacy tosuspend, including without prior hearing, revoke, or refuse to renew a license it issued
for any reason specified in rules adopted by the Department or Board.64 The bill also
provides that the Department or Board may refuse to issue a license. An action tosuspend or revoke a license must be taken in accordance with the Administrative
Procedure Act.65
Board of Pharmacy - summary suspension

With respect to a suspension without prior hearing, the Board may do so only if
it finds clear and convincing evidence that continued distribution of medical marijuana
by a licensed retail dispensary presents a danger of immediate and serious harm toothers. Under the bill, the Board may utilize a telephone conference call to review theallegations and take a vote. The bill requires that the Board comply with therequirements of the Administrative Procedure Act when suspending without priorhearing.66
The bill also provides that a summary suspension remains in effect, unless liftedby the Board, until the Board issues its final adjudication order. If the Board does notissue the order within 90 days after the adjudication hearing, the suspension must be
lifted on the 91 day following the hearing.

63 R.C. 3796.09 and 3796.10.
64 R.C. 3796.03, 3796.04, and 3796.14.
65 R.C. Chapter 119.
66 R.C. Chapter 119.

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As Reported by S. Government Oversight & Reform

Authority to impose a civil penalty
The bill authorizes the Department of Commerce or Board of Pharmacy, as
applicable, to impose on a license holder a civil penalty in an amount to be determinedby the Department or Board for any reason specified in rules adopted by the
Department or Board.67 Any action to impose a civil penalty must be taken inaccordance with the Administrative Procedure Act.68 In the case of the Board of
Pharmacy, the Board may utilize a telephone conference call to review the allegations
and take a vote.
Authority to inspect
The bill authorizes the Department of Commerce or Board of Pharmacy, as
applicable, to inspect the premises of an applicant for licensure and a license holder
without prior notice to the applicant or license holder.69 In the case of the Board of
Pharmacy, it may, in addition, inspect all records maintained by a licensed retaildispensary as required by the bill.
Authority to place medical marijuana under seal – retail dispensaries
The bill authorizes the Board of Pharmacy to place under seal all medical
marijuana owned by or in the possession, custody, or control of a licensed retaildispensary if the Board does all of the following:(1) Suspends, revokes, or refuses to renew the dispensary's license;(2) Determines that there is clear and convincing evidence of a danger of
immediate and serious harm to any person.70
The Board must not dispose of the medical marijuana placed under seal until thelicense holder exhausts all appeal rights under the Administrative Procedure Act. The
court involved in the appeal may order the Board, during the pendency of the appeal,
to sell medical marijuana that is perishable. The Board must deposit the sale's proceedswith the court.

67 R.C. 3796.14.
68 R.C. Chapter 119.
69 R.C. 3796.14.
70 R.C. 3796.15.

Legislative Service Commission-27Sub. H.B. 523
As Reported by S. Government Oversight & Reform

Licensed cultivators
The bill authorizes the holder of a cultivator license to cultivate medical
marijuana and deliver or sell it to one or more processors.71
Prohibition on personal, family, or household use

The bill prohibits a cultivator license holder from cultivating medical marijuana
for personal, family, or household use.
Prohibition on cultivation on public land

The bill prohibits a cultivator license holder from cultivating medical marijuana
on any public land, including a state park.72
Licensed processors
The holder of a processor license may do any of the following:(1) Obtain medical marijuana from one or more licensed cultivators;(2) Process medical marijuana obtained from a cultivator into a form that may bedispensed;(3) Deliver or sell processed medical marijuana to one or more licensed retaildispensaries.73
When processing medical marijuana, a licensed processor must package it
according to federal child-resistant effectiveness standards in effect on the bill's effective
date.74 The processor also must label the packaging with the product's
tetrahydrocannabinol and cannabidiol75 content and comply with any packaging orlabeling requirements established in rules adopted by the Department of Commerce.

71 R.C. 3796.18.
72 R.C. 3796.18 and 154.01, not in the bill.
73 R.C. 3796.19.
74 See 16 C.F.R. 1700.15(b).
75 Themarijuana plant contains more than 80 active cannabinoid chemicals, including
tetrahydrocannabinol (THC) and cannabidiol (CBD). THC is the main psychoactive cannabinoid inmarijuana. Unlike THC, CBD does not produce euphoria or intoxication. See National Institutes of Health,National Institute on Drug Abuse, The Biology and Potential Therapeutic Effects of Cannabidiol, available at<https://www.drugabuse.gov/about-nida/legislative-activities/testimony-to-congress/2016/biologypotential-therapeutic-effects-cannabidiol>.
Legislative Service Commission-28Sub. H.B. 523
As Reported by S. Government Oversight & Reform

Licensed retail dispensaries
The holder of a retail dispensary license may obtain medical marijuana from one
or more processors and may dispense or sell it to patients. When dispensing medical
marijuana, the dispensary must do all of the following:(1) Dispense or sell only upon a showing of a current, valid identification card
issued by the Board of Pharmacy and in accordance with a physician recommendation;(2) Report to the drug database maintained by the Board of Pharmacy that
medical marijuana was dispensed to a patient (see "OARRS" below);(3) Use only employees who have met the training requirements established inrules adopted by the Board of Pharmacy;(4) Label the package containing medical marijuana with the following
information: The name and address of the licensed processor and retail dispensary; The name of the patient and caregiver, if any; The name of the qualifying physician who recommended treatment withmedical marijuana; The directions for use as recommended by the qualifying physician; The date on which the medical marijuana was dispensed;
 The quantity, strength, kind, and form of medical marijuana contained in
the package.76
Patient identifying information

The bill prohibits a licensed retail dispensary from making public any
information it collects that identifies or would tend to identify any specific patient. 77
Licensed laboratories
The holder of a laboratory license may obtain medical marijuana from licensed
cultivators, processors, and retail dispensaries and may conduct testing on the

76 R.C. 3796.20.
77 R.C. 3796.20.

Legislative Service Commission-29Sub. H.B. 523
As Reported by S. Government Oversight & Reformmarijuana. When testing, a licensed laboratory must test for potency, homogeneity, andcontamination and prepare a report of test results.78
Temporarily restricted to certain Ohio institutions of higher education

For one year following the date that the Department of Commerce begins to
accept applications for a license to conduct laboratory testing of medical marijuana, theDepartment is prohibited from issuing a license to any applicant that is not an
institution of higher education that meets all of the following conditions:(1) The institution is public and located in Ohio;(2) The institution has the resources and facilities necessary to conduct testing inaccordance with the standards and procedures established in rules adopted by the
Department.79
Forfeiture or seizure of license holder property
The bill provides that the cultivation, processing, testing, or dispensing of
medical marijuana in accordance with the bill's provisions cannot be used as the sole or
primary reason for taking any action under any criminal or civil statute in the forfeitureor seizure of any property or asset.80
Other licensed professionals
Under the bill, the holder of a license, as defined under current law, is not subject
to professional disciplinary action solely for engaging in professional or occupational
activities related to medical marijuana.81

Academic medical centers, state universities, and private research anddevelopment organizations that engage in marijuana research
The bill provides that it does not authorize the Department of Commerce orBoard of Pharmacy to oversee or limit research conducted at a state university,
academic medical center, or private research and development organization that is
related to marijuana and is approved by a federal agency, board, center, department, or
institute, including any of the following:

78 R.C. 3796.21.
79 Section 5.
80 R.C. 3796.24.
81 R.C. 3796.24 and 4776.01, not in the bill.

Legislative Service Commission-30Sub. H.B. 523
As Reported by S. Government Oversight & Reform(1) The Agency for Health Care Research and Quality;(2) The National Institutes of Health;(3) The National Academy of Sciences;(4) The Centers for Medicare and Medicaid Services;(5) The U.S. Department of Defense;(6) The Centers for Disease Control and Prevention;(7) The U.S. Department of Veterans Affairs;(8) The Drug Enforcement Administration;(9) The Food and Drug Administration;(10) Any board recognized by the National Institutes of Health for the purpose ofevaluating the medical value of health care services.82
The bill also provides that it does not restrict research related to marijuanaconducted at a state university, academic medical center, or private research anddevelopment organization as part of a research protocol approved by an institutional
review board or equivalent entity.83

Property tax valuation of land used to cultivate or process marijuana
The bill specifies that land on which medical marijuana is cultivated or processed
does not qualify for current agricultural use valuation (CAUV) for property tax
purposes.84 Instead, such land would be taxed based on fair market value (i.e., the pricethat a seller is willing to accept and a buyer is willing to pay on the open market).85
As a general rule, property taxes are based on the fair market value of the land.
An exception to this rule is authorized in the Ohio Constitution, permitting land
devoted exclusively to agricultural use to be valued according to its CAUV. 86 The

82 R.C. 3796.032.
83 R.C. 3796.24.
84 R.C. 5713.30.
85 Section 2, Article XII, Ohio Constitution, not in the bill.
86 Section 36, Article II, Ohio Constitution, not in the bill.

Legislative Service Commission-31Sub. H.B. 523
As Reported by S. Government Oversight & ReformCAUV formula is designed to estimate the value of property considering only its
potential use for agriculture, rather than its "best" potential use (i.e., for residential orcommercial development). The CAUV method usually results in a lower tax bill for
farmland owners because the land is often valued below its actual market value,
particularly in areas where farmland is in demand for development purposes.87

Township or municipal corporation may prohibit or limit number of retaildispensaries
The bill authorizes the legislative authority of a municipal corporation to adopt
an ordinance, and a board of township trustees to adopt a resolution, to prohibit, or
limit the number of, licensed retail dispensaries of medical marijuana within themunicipal corporation or within the unincorporated territory of the township. 88
Exemption for marijuana research
The bill provides that it does not authorize a municipal corporation or townshipto limit research related to marijuana conducted at a state university, academic medical
center, or private research and development organization as part of a research protocol
approved by an institutional review board or equivalent entity.

Zoning of retail dispensaries
The legislative authority of a municipal corporation has authority underconstitutionally granted home rule authority89 and under continuing law90 to adopt
zoning ordinances regulating land and buildings within municipal boundaries. And,
along with various other zoning powers, townships have authority under continuing
law to regulate, by resolution, the location and use of buildings and other structures
and the uses of land for trade or industry in the unincorporated area of the township. 91
Counties have similar zoning authority,92 but county zoning regulations may apply onlyin the unincorporated area of the county not covered by township zoning regulations. 93

87 R.C. 5713.31, not in the bill.
88 R.C. 3796.29.
89 Ohio Const., art. XVIII, sec. 3; Garcia v. Siffrin Residential Ass'n, 63 Ohio St.2d 259 (1980).
90 R.C. 713.07 to 713.10, not in the bill.
91 R.C. 519.02, not in the bill.
92 R.C. 303.02, not in the bill.
93 R.C. 303.22, not in the bill, except county zoning regulations will apply in an area covered by townshipzoning regulations upon vote of majority of voters in the area.
Legislative Service Commission-32Sub. H.B. 523
As Reported by S. Government Oversight & ReformCurrent law limits the power of counties and townships to zone land used for
agricultural purposes. The bill provides that these existing limitations do not prohibit atownship, through its zoning commission, board of township trustees, or board ofzoning appeals,94 from regulating the location of retail dispensaries of medical
marijuana or from prohibiting such dispensaries from being located in theunincorporated territory of the township. The bill does not provide similarly forcounties.95

Proximity to school, church, or certain public places
The bill prohibits a cultivator, processor, retail dispensary, or laboratory frombeing located within 500 feet of a school, church, public library, public playground, or
public park.96
The bill requires an entity seeking a license to demonstrate the entity will not belocated within 500 feet of a school, church, public library, public playground, or publicpark.97 The Department of Commerce must revoke the license of a cultivator, processor,or laboratory that relocates to within 500 feet of a school, church, public library, publicplayground, or public park. Similarly, the Board of Pharmacy must revoke the license ofretail dispensary that relocates to within 500 feet of such places.98
Finally, the bill requires that the Department and Board specify, in rules adopted
under the Administrative Procedure Act, whether a license holder may remain in
operation, must relocate, or have its license revoked after a school, church, public
library, public playground, or public park opens within 500 feet of the license holder'spremises (see "Program rules" above).99 For purposes of the bill, a school includes achild day-care center.100
Exemption for marijuana research
The bill specifies that the prohibition described above does not apply to a state
university, academic medical center, or private research and development organization
94 R.C. 519.21(D).
95 The relevant county provision is R.C. 303.21, not in the bill.
96 R.C. 3796.30(A).
97 R.C. 3796.09 and 3796.10.
98 R.C. 3796.30.
99 R.C. 3796.03 and 3796.04.
100 R.C. 3796.30.

Legislative Service Commission-33Sub. H.B. 523
As Reported by S. Government Oversight & Reformthat conducts research related to marijuana as part of a research protocol approved byan institutional review board or equivalent entity.

Employment laws
Employment – generally
The bill provides that nothing in the bill concerning medical marijuana does anyof the following:(1) Requires an employer to permit or accommodate an employee's use,
possession, or distribution of medical marijuana;(2) Prohibits an employer from refusing to hire, discharging, disciplining, orotherwise taking an adverse employment action against a person with respect to hire,
tenure, terms, conditions, or privileges of employment because of that person's use,
possession, or distribution of medical marijuana;(3) Prohibits an employer from establishing and enforcing a drug testing policy,
drug-free workplace policy, or zero-tolerance drug policy;(4) Interferes with any federal restrictions on employment, including U.S.
Department of Transportation regulations;(5) Permits a person to sue an employer for refusing to hire, discharging,disciplining, discriminating, retaliating, or otherwise taking an adverse employment
action against a person with respect to hire, tenure, terms, conditions, or privileges of
employment related to medical marijuana;(6) Affects the authority of the Administrator of Workers' Compensation to grant
rebates or discounts on premium rates to employers that participate in a drug-freeworkplace program established in accordance with rules adopted by the
Administrator.101
Under continuing law, the Bureau of Workers' Compensation's Drug-Free Safety
Program offers eligible employers a premium rebate for implementing a lossprevention strategy addressing workplace use and misuse of alcohol and drugs. In
addition to satisfying other requirements, the employer's program must include alcoholand drug testing, including (1) pre-employment and new-hire drug testing, (2) post-

101 R.C. 3796.28.

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As Reported by S. Government Oversight & Reform

accident alcohol and drug testing, (3) reasonable suspicion alcohol and drug testing,and (4) return-to-duty and follow-up alcohol and other drug testing.102
Unemployment eligibility
Under the bill, a person who is discharged from employment because of that
person's use of medical marijuana is considered to have been discharged for just cause
under the Unemployment Compensation Law if the person's use of medical marijuanaviolated an employer's drug-free workplace policy, zero-tolerance policy, or otherformal program or policy regulating the use of medical marijuana.103 If a person has
been discharged for just cause in connection with the person's work, for purposes ofthat Law that person is ineligible to serve a waiting week or receive unemployment
benefits for the duration of the person's unemployment. Under current law, failure of adrug test could be "just cause" for purposes of this provision.104
Workers' compensation – rebuttable presumption
Eligibility

The Workers' Compensation Law compensates an employee or an employee's
dependents for death, injuries, or occupational diseases occurring in the course of andarising out of the employee's employment. Under continuing law, an employee ordependent is ineligible if the employee's injury or occupational disease is purposely
self-inflicted or is caused by the employee being intoxicated or under the influence of acontrolled substance not prescribed by a physician where the intoxication or being
under the influence of the controlled substance was the proximate cause of the injury.105
The bill maintains an employee's or dependent's ineligibility for compensation
and benefits if the employee was under the influence of marijuana and being under the
influence of marijuana was the proximate cause of the injury. This applies regardless ofwhether the marijuana use is recommended by a physician. 106
Rebuttable presumption – current law

Under continuing law, a rebuttable presumption is established if an employee is
intoxicated or under the influence of a controlled substance not prescribed by a
102 Ohio Administrative Code 4123-17-58.
103 R.C. 3796.28.
104 R.C. 4141.29, not in the bill.
105 R.C. 4123.54.
106 R.C. 4123.54.

Legislative Service Commission-35Sub. H.B. 523
As Reported by S. Government Oversight & Reformphysician and being intoxicated or under the influence of that controlled substanceproximately caused an injury if either of the following applies:--A qualifying chemical test is administered and the employee tests above certain
levels for alcohol or certain controlled substances, including cannabinoids.
--The employee refuses to submit to a chemical test on the condition that theemployee is given notice that refusal to submit to a qualifying chemical test may affectthe employee's eligibility for compensation and benefits.107
Under current law, a chemical test is considered a "qualifying chemical test" if it
is administered to an employee after an injury under at least one of the following
conditions: (1) when the employee's employer has reasonable cause to suspect that theemployee may be intoxicated or under the influence of a controlled substance notprescribed by the employee's physician, (2) at a police officer's request because theofficer has reasonable grounds to believe that the employee was operating a vehicle
while intoxicated or under the influence of a controlled substance, or (3) at a physician's
request.108"Reasonable cause" means evidence that an employee is or was using alcohol or acontrolled substance drawn from specific, objective facts and reasonable inferences
drawn from these facts in light of experience and training. These facts and inferences
may be based on, but are not limited to, any of the following:--Observable phenomena, such as direct observation of use, possession, or
distribution of alcohol or a controlled substance, or of the physical symptoms of being
under the influence of alcohol or a controlled substance;--A pattern of abnormal conduct, erratic or aberrant behavior, or deteriorating
work performance that appears to be related to the use of alcohol or a controlled
substance, and does not appear to be attributable to other factors;--The identification of an employee as the focus of a criminal investigation into
unauthorized possession, use, or trafficking of a controlled substance;--A report of use of alcohol or a controlled substance provided by a reliable andcredible source;

107 R.C. 4123.54.
108 R.C. 4123.54.

Legislative Service Commission-36Sub. H.B. 523
As Reported by S. Government Oversight & Reform--Repeated or flagrant violations of the safety or work rules of the employee's
employer that are determined by the employee's supervisor to pose a substantial risk ofphysical injury or property damage and that appear to be related to the use of alcohol ora controlled substance and that do not appear attributable to other factors.109"Safe harbor" for the provision of banking services
Under the bill, a financial institution that provides financial services to any
cultivator, processor, retail dispensary, or laboratory licensed under the bill is exempt
from any Ohio criminal law an element of which may be proven by substantiating thata person provides financial services to a person who possesses, delivers, ormanufactures marijuana or marijuana-derived products, if the cultivator, processor,
retail dispensary, or laboratory is in compliance with the bill and the applicable Ohio
tax laws.110 The bill defines "financial institution" as:--Any bank, trust company, savings and loan association, savings bank, or credit
union or any affiliate, agent, or employee of such an institution;--Any money transmitter licensed under Ohio law or any affiliate, agent, or
employee of a money transmitter.111
For purposes of this exemption, a financial institution may request that the
Department of Commerce or Board of Pharmacy provide the following information:(1) Whether a person with whom the financial institution is seeking to dobusiness is a cultivator, processor, retail dispensary, or laboratory licensed under thebill;(2) The name of any other business or individual affiliated with the person;(3) A copy of the application for a license under the bill, and any supporting
documentation, that was submitted by the person;(4) If applicable, information relating to sales and volume of product sold by the
person;(5) Whether the person is in compliance with the bill;
109 R.C. 4123.55.
110 R.C. 3796.27. The criminal laws referred to by the bill include offenses relating to the funding of drugor marihuana trafficking and, as they apply to violations of the Drug Offenses Law, the offenses ofconspiracy and complicity.
111 R.C. 3796.27.

Legislative Service Commission-37Sub. H.B. 523
As Reported by S. Government Oversight & Reform(6) Any past or pending violation of the bill by the person, and any penalty
imposed on the person for the violation.
Notwithstanding the Public Records Law, the Department of Commerce orBoard of Pharmacy must provide the information requested by a financial institution. It
may charge the financial institution a reasonable fee to cover the administrative cost of
doing so.112
Information received by a financial institution under the bill is confidential.
Except as otherwise permitted by other state law or federal law, a financial institution isprohibited from making the information available to any person other than thecustomer to whom the information applies and any trustee, conservator, guardian,personal representative, or agent of that customer.113
Closed-loop payment processing system

The bill authorizes the Director of Commerce to adopt, in accordance with the
Administrative Procedure Act, rules that establish a closed-loop payment processing
system under which the state creates accounts to be used only by registered patientsand caregivers at licensed dispensaries as well as by all license holders under the bill.
The system may include record-keeping and accounting functions that identify allparties involved in those transactions. The purpose of the system is to prevent: Revenue from the sale of marijuana from going to criminal enterprises,
gangs, and cartels; The diversion of marijuana from a state where it is legal in some form
under that state's law to another state; The distribution of marijuana to minors;
 The use of state-authorized marijuana activity as a cover or pretext for the
trafficking of other illegal drugs or for other illegal activity.
The information recorded by the system must be fully accessible to the Board of
Pharmacy and all state and federal law enforcement agencies, including the U.S.
Department of the Treasury's financial crimes enforcement network (FinCEN).114

112 R.C. 3796.27.
113 R.C. 3796.27(E).
114 R.C. 3796.031

Legislative Service Commission-38Sub. H.B. 523
As Reported by S. Government Oversight & ReformOARRSThe Ohio Automated Rx Reporting System, or OARRS, is the drug databaseestablished and maintained by the Board of Pharmacy to monitor the misuse anddiversion of controlled substances.115 Existing law requires that when a controlled
substance is dispensed by a pharmacy or personally furnished by a health care
professional to an outpatient, this information must be reported to OARRS. Health care
professionals and pharmacists also may access patient information in the database.116
Reporting to OARRSThe bill authorizes the Board of Pharmacy to monitor medical marijuana throughOARRS, by requiring that a retail dispensary or its delegate report to OARRS whendispensing medical marijuana in accordance with the bill's provisions.117 Under the bill,a dispensary must report to the database the information specified in rules adopted by
the Board of Pharmacy.
Access to patient information
The bill also permits the Board to provide to a delegate of a retail dispensary areport of information from OARRS pertaining only to a patient's use of medical
marijuana, if all of the following apply:(1) The delegate requests the report;(2) The delegate certifies in a form specified by the Board that the information
requested is for the purpose of distributing medical marijuana for use in accordancewith the bill's provisions;(3) The delegate or retail dispensary has not been denied access to OARRS.
While it permits retail dispensaries to access OARRS, the bill does not requirethem to do so.
Board of Pharmacy reports
Under existing law, the Board must report biennially to the standing committeesof the General Assembly primarily responsible for considering health issues
information from the Board, prescribers, and pharmacies regarding the Board's
115 R.C. 4729.75.
116 R.C. 4729.80.
117 R.C. 4729.75 , 4729.771, and 4729.84.

Legislative Service Commission-39Sub. H.B. 523
As Reported by S. Government Oversight & Reformeffectiveness in providing information from OARRS. The bill requires that this report
also include information from retail dispensaries licensed to dispense medical
marijuana.
Current law also requires that the Board submit a semiannual report to theGovernor, General Assembly, and various agencies or departments of state governmentthat includes an aggregate of information regarding prescriptions for controlled
substances containing opioids, as well as opioids personally furnished by prescribers.
The bill also requires that the report contain an aggregate of information submitted byretail dispensaries when dispensing medical marijuana.118
Confidentiality of OARRS information
With respect to information contained in OARRS, the bill provides that it isconfidential and may be released in summary, statistical, or aggregate form if it does
not identify a person, including any Board licensee or registrant.119
The bill also specifies that information contained in OARRS may be provided
only as expressly permitted in law, including any information that relates to any
person, including any Board licensee or registrant.
Conforming changes
Because the bill authorizes the Pharmacy Board to monitor medical marijuanathrough its database and requires that retail dispensaries report to OARRS, it makes
several conforming changes to the law governing the OARRS Program.120

Monitoring database
The Department of Commerce must establish and maintain an electronic
database to monitor medical marijuana from its seed source through its cultivation,
processing, testing, and dispensing.121 The Department may contract with a separate
entity to establish and maintain all or any part of the database on its behalf.
The database must allow for information regarding medical marijuana to be
updated instantaneously. Any licensed cultivator, processor, retail dispensary, or

118 R.C. 4729.85.
119 R.C. 4729.80.
120 R.C. 4729.84 and 4729.86.
121 R.C. 3796.07.

Legislative Service Commission-40Sub. H.B. 523
As Reported by S. Government Oversight & Reformlaboratory must submit to the Department any information the Department determines
is necessary for maintaining the database.
The Department and any entity under contract with the Department isprohibited from making public any information reported to or collected by it that
identifies or would tend to identify any specific patient.

Toll-free hotline
The bill requires that the Board of Pharmacy establish a toll-free telephone line to
do all of the following:(1) Respond to inquiries from patients, caregivers, and health professionals
regarding adverse reactions to medical marijuana;(2) Provide information about available services and assistance. 122
The bill also authorizes the Board of Pharmacy to contract with a separate entity
to establish and maintain the telephone line.

Legislative intent
Reclassification of marijuana
The bill specifies that the General Assembly declares its intent to recommendthat the United States Congress, the Attorney General of the United States, and theUnited States Drug Enforcement Agency take actions as necessary to reclassify
marijuana in an effort to ease the regulatory burdens associated with research on thepotential medical benefits of marijuana.123

HISTORY
ACTIONDATE

Introduced
Reported, H. Select Committee on Medical Marijuana
Passed House (71-26)
Reported, S. Government Oversight & Reform

04-14-16
05-09-16
05-10-16---

H0523-RS-131.docx/emir

122 R.C. 3796.17.
123 Section 4.

Legislative Service Commission-41Sub. H.B. 523
As Reported by S. Government Oversight & Reform