Ohio Cannabis Business Licenses
WHAT IS OHIO'S CURRENT CANNABIS MARKET STATUS?
Content Below Last Updated by Point7 04/11/2022
In December 2021, the Coalition to Regulate Marijuana Like Alcohol created a 2022 ballot initiative campaign to legalize cannabis for adult-use in Ohio. The coalition must gather and submit 132,887 signatures from Ohioans in at least 44 counties to the Ohio Secretary of State to meet the requirement for the second phase of the ballot initiative qualification process. The proposal would allow Ohioans aged 21 and older to purchase and possess up to 2.5 ounces of cannabis and 15 grams of concentrate, along with the ability to grow up to six plants individually and no more than 12 in a household with multiple adults.
In 2016 Ohio legalized cannabis for medical use, and since then the state has seen a rapid growth of tax revenue from cannabis sales. Since 2019, there has been nearly $725 million generated from cannabis sales according to the Ohio Department of Commerce Medical Marijuana Control Program. Although this is a huge sum of money for the state, medical cannabis sales actually fell short of initial predictions. This is largely due to bureaucratic issues surrounding regulating the industry and the delays in the licensing processes. However, as sales figures increase, cultivators and manufacturers are turning to automation to further streamline production to ensure a consistent supply chain.
WHAT ARE OHIO'S CANNABIS LAWS?
Cannabis is legal for medical use and illegal for recreational use in Ohio. Medical cannabis was legalized in 2016 when Governor John Kasich officially signed House Bill 523 into law, making Ohio the 25th state to adopt a workable medical cannabis law. HB 523 outlined a rulemaking process to set up a complex and functional cannabis system consisting of cultivation facilities, testing laboratories, patient registration, retail locations, and other crucial operations. While the system was being prepared and regulated by the Ohio Department of Commerce, patients with qualifying conditions, such as AIDS, Parkinsons, PTSD, and other chronic, or terminal illnesses, were allowed to transport medical cannabis from Michigan into Ohio. The first licensed sales of medical cannabis occurred on January 16, 2019.
Currently, medical cannabis is prohibited to be ingested by way of smoking and is only allowed to be consumed in edible, oil, vapor, patch, tincture or other non-smoking forms.
WHAT IS OHIO'S CANNABIS LICENSING TIMELINE & CANNABIS APPLICATION PROCESS?
During the first round of licensing in 2018, the Ohio Board of Pharmacy issued 57 medical cannabis dispensary licenses throughout the state, with a limit of 60 awards to dispensaries. The state is divided into 31 counties, and each county may only have a limited number of dispensaries. Applicants may have a maximum of five licenses, and 66% of the dispensaries in a county. Currently 52 dispensaries are operational in the state of Ohio.
Ohio is not accepting applications for medical cannabis dispensaries, processors or cultivators at this time. However, a private laboratory is able to apply for a testing license through the state. For more information please go to https://medicalmarijuana.ohio.gov/testing
WHAT IS THE HISTORY OF CANNABIS IN OHIO?
Cannabis in Ohio has an arduous history marked with mixed policies. The legalization of medical cannabis has been a lengthy process despite Ohio’s progressive policies toward decriminalization of the possession of cannabis. In 2016 the fight for medical cannabis finally prevailed with the passage of the first medical cannabis bill, and the first dispensary sale in 2019.
Ohio was one of six states to decriminalize cannabis possession up to 100 grams in 1975, labeling the offense as a minor misdemeanor resulting in a $150 fine rather than jail time. After many years of cannabis being illegal yet decriminalized, legalization of cannabis was presented on the state ballot in 2015 under the measure Issue 3. This measure was aimed to legalize the use and sale of cannabis, allow commercial cultivation of cannabis, allow possession of cannabis up to one ounce of commercial cannabis, and allow home-cultivation of cannabis up to four plants. This measure ultimately failed because it was criticized for establishing a monopoly on cannabis producers, and did not receive the endorsement of the Drug Policy Alliance and Marijuana Policy Project — two critical organizations in the drug policy reform field.
In 2016 medical cannabis was legalized through the passage of House Bill 523, which developed guidelines for a cannabis system in Ohio. The system was established by September 2018, and in the interim period qualifying patients were allowed to travel to Michigan to legally obtain medical cannabis and transport back to Ohio.
Medical cannabis was legally sold in Ohio for the first time in 2019. That same year, many Ohio cities took measures to further decriminalize possession of cannabis up to 100 grams. Dayton and Cincinnati eliminated all penalties and fees; Columbus reduced the fine to $10; and Cleveland eliminated penalties for possession up to 200 grams.
On April 19, 2021 the Board of Pharmacy unanimously voted to increase the number of medical marijuana dispensaries in the state to a total of 130 from the current 57 provisional licensed businesses. The Board also voted to change how dispensaries are approved. When regulators first created the program, they looked at each dispensary application, and gave it a numerical score with the highest scoring businesses generally winning licenses. Under the new rules all applications that pass minimum business, security, and legal standards will be entered into a lottery. Winners were chosen from each of the districts where applicants indicated a desire to operate. The licenses were awarded using an application process known as RFA II.
Although Ohio has been slow to participate in the cannabis industry, new laws and legislation show a promising future for the plant in the Buckeye state. In 2022, the Coalition to Regulate Marijuana like Alcohol submitted a final round of signatures for a proposed measure to appear on the November 2022 ballot to allow Ohioans to vote for legalized adult-use cannabis in their state.
DOES OHIO HAVE A HEMP PROGRAM?
Growing, processing, and selling hemp and hemp extracts is legal in Ohio. Ohio’s Hemp Program is administered by the Ohio Department of Agriculture and has been approved by the USDA as of December 27, 2019. Application requirements depend on the license type, but those seeking to sell hemp and hemp extracts do not need a license to perform those activities.
ARE YOU PREPARING FOR THE OHIO CANNABIS MARKET?
Although the application process has closed for cultivators, processors, and dispensaries, we are ready to support your team as you prepare for cannabis licensure in Ohio for testing licenses. Contact Point7 to discuss the fully customizable products and service packages available that have proved successful for operators around the country.