Canna Carpetbaggers? Ohio Explores Residency Requirements

Marijuana Cannabis Now Magazine

When states go legal who gets rich? Some people in Ohio are worried that out-of-state “carpetbaggers” are poised to cash in on Ohioans’ hard work to decriminalize cannabis. But regulations being explored by the state’s department of commerce could stop them in their tracks.


Ohio: America’s original frontier and one of the newest — perhaps one of the juiciest — opportunities for would-be marijuana entrepreneurs.

The state plans to issue just 24 grow licenses to serve a medical-marijuana market with a projected net-worth between $200 million and $400 million, according to an estimate from Marijuana Business Daily. Even on the low end, that’s several millions per cultivator.

The question now is who will cash in? Will Ohio allows itself to become a new wild west for worldwide weed money, or will is pass the pot version of a protective tariff?

Businessman, Chad Zaki, was away from his home in Arizona last Monday — speaking to a city council in suburban Cleveland. Zaki is an investor with an Arizona-based medical-marijuana company, and was in Parma, Ohio, to tell the city council to quickly write and approve a law allowing cannabis grows, before other towns beat them to the punch.

Meanwhile, other entrepreneurs — ones from Ohio — are leaning on state officials to make sure carpetbaggers like Zaki have to stay away, at least for a while.

As the Cleveland Plain Dealer reported, when the Ohio Department of Commerce rolls out its final rules for cultivation operations on May 6, native Ohioans — like Kelly Mottola, owner of an Ohio-based hydroponics company — want to make sure they have first dibs on cultivation licenses.

“We’re the ones who fought for this,” Mottola said  “Allowing people from outside the state is not benefiting Ohio or Ohioans or our unemployment.”

There is some precedent for protectionism in cannabis. For a time, Colorado required license applicants to live in the state for two years before they could grow cannabis, before ultimately cutting that waiting period down to a year.

But what happens when a local Ohioan partners with an out-of-state investor, who also brings in cannabis know-how honed out of state? According to the Dealer, most of the proposals for cultivation centers seen around the state are coming from Ohio residents backed by a team of out-of-towners.

Or what about a native Ohioan who left town to work in cannabis in California, but is coming home to Winesburg to make a local fortune?

Wherever rules are laid, they will be gamed — believe that.

And investment will surely be needed: to build a grow facility of no more than 25,000 square feet will require fees of $200,000 up front, plus a “demonstration” of at least $500,000 and enough collateral for a surety bond of $750,000.

If out-of-town businessmen like Zaki aren’t allowed to own an Ohio company, it’s a safe bet a few hundred thousand from elsewhere outside the Ohio River valley will float one.

TELL US, do you believe in protectionism for regional growers?

Chris Roberts has written about medical cannabis, drug policy, and legalization ever since spending a few months in Humboldt County in 2009, with bylines for the San Francisco Chronicle, San Francisco Examiner, and SF Weekly. Follow him on Twitter and Instagram @cbloggy.

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