Cleveland Council Eyes Cannabis Tax Revenue for Local Projects

Cleveland City Council is considering legislation that would allocate a portion of the city's marijuana tax revenue to fund neighborhood-level projects, giving council members direct control over how cannabis dollars benefit their districts.

The proposal comes as Ohio's adult-use cannabis market continues to generate significant tax revenue following voter approval of legalization in November 2023. Cleveland, like other Ohio municipalities, has begun collecting local taxes on cannabis sales—and city leaders are now debating how best to deploy those funds.

"Legalization created opportunity," one council member told Signal Cleveland. "This ordinance ensures that this opportunity is shared, shared fairly, shared transparently and shared with the residents who made it possible."

The Distribution Model

Under the proposed ordinance, individual council members would gain authority to direct cannabis tax dollars toward projects in their respective wards. The approach mirrors community development block grant programs, where elected officials allocate funds based on local needs and priorities.

The legislation aims to ensure cannabis revenue doesn't simply disappear into general city coffers. Instead, it would create a transparent mechanism for residents to see how legalization dollars benefit their neighborhoods directly.

Ohio's adult-use market launched in August 2024, nearly nine months after voters passed Issue 2 with 57% support. The state levies a 10% excise tax on cannabis sales, with municipalities permitted to add local taxes on top of that state levy. Cleveland has taken advantage of this option, though the city hasn't yet disclosed total cannabis tax collections.

Beyond General Revenue

The push for dedicated cannabis tax spending reflects a broader trend among Ohio cities. Several municipalities have earmarked marijuana revenue for specific purposes rather than treating it as unrestricted income.

Cincinnati, for example, has directed a portion of its cannabis tax dollars toward expungement services and community reinvestment programs. Columbus officials have discussed similar approaches, though specific allocation plans remain under development.

Policy experts suggest that transparent allocation mechanisms help build public support for legalization. When residents see tangible benefits—improved parks, youth programs, or infrastructure upgrades—they're more likely to view cannabis policy changes favorably.

The Cleveland proposal also addresses equity concerns that have dogged cannabis legalization nationwide. Communities disproportionately affected by marijuana prohibition often see little direct benefit from legal markets. By giving council members discretion over neighborhood spending, the ordinance attempts to ensure those communities receive resources.

What's Next

The proposal still requires full council review and a vote before taking effect. City officials haven't announced a timeline for consideration, though the ordinance could come up for discussion in coming weeks.

If approved, Cleveland would join a growing number of Ohio cities experimenting with dedicated cannabis revenue streams. The approach differs from states like Colorado and Washington, where marijuana taxes typically flow into statewide education or health programs rather than hyperlocal initiatives.

Council members will likely face questions about oversight and accountability. How much money qualifies for neighborhood allocation? What types of projects are eligible? Who monitors spending to prevent misuse?

Those details remain under discussion as the ordinance moves through the legislative process. But the core principle—that cannabis tax revenue should directly benefit Cleveland neighborhoods—appears to have broad support among city leaders.

Ohio's cannabis market generated $290 million in sales during its first five months, according to state data. As that market matures and tax collections grow, municipalities like Cleveland will have increasing resources to deploy. How they choose to spend those dollars could set precedents for cities across the state.

---

This article is based on original reporting by www.marijuanamoment.net.