Is Ohio’s Medical Market Ready for the Flip to Adult-Use Cannabis Sales?

A fourth wave of adult-use legalization is upon us. Broad public support for cannabis remains high, and, despite a few recent losses at the polls in states like Arkansas and Oklahoma, there’s reason to believe that multiple states will flip from medical to adult-use markets this year. Already, we’ve seen Delaware make the jump.

The rise in public support comes as Ohio’s medical cannabis industry seeks its own avenues for growth. State lawmakers are currently considering a bill that would expand a medical cannabis program currently enrolling only about 2% of the population. Additionally, plans are in the works for an adult-use legalization initiative to land on the ballot in November.

The Buckeye State has 130 licensed medical cannabis dispensaries today. The Ohio Board of Pharmacy, the government organization in charge of medical cannabis licensure, originally limited the number of retailers in the state to 57. That changed in April 2021 when licensing was made available for an additional 73 locations.

Progress on the dispensary side still does not match the overall need for one of the most heavily populated Midwest states, says Lenny Berry, founder of the Ohio Cannabis Health and Business Summit, a resource hub for the rapidly developing medical cannabis and hemp industries.

As of April 2023, Ohio has 355,368 registered marijuana patients out of a population of 11.8 million. Medical cannabis is allowed for 22 conditions including AIDS, cancer, Crohn’s disease and epilepsy. Autism spectrum disorder is not an approved condition, an omission that has received criticism from frustrated parents.

Limitations on consumer consumption also constrict which products are available in the marketplace, says Berry, who also owns Organic Plus Brands, a licensed hemp company that sells edibles like gummies along with hemp-derived tinctures and lip balms.

“There’s only so many different types of gummies you can sell,” Berry says. “There’s nothing in Ohio to excite the patient because we are still a medical market only. People are going to Michigan (and other recreational use states) to buy an array of products like capsules and popcorn—products that people here would be excited about.”

‘That Giant Sucking Sound’

By the end of 2023, Ohio’s General Assembly could pass a bill that would permit medical cannabis use for any condition “that the patient’s symptoms may reasonably be expected to be relieved from medical marijuana.” It’s a broad proposal—and one that could rapidly expand the medical patient base in the state.

Approval of Senate Bill 9, sponsored by state Sens. Steve Huffman and Kirk Schuring, would add autism, arthritis and migraines as qualifying conditions for medical cannabis use, while also expanding permissible forms to include capsules, lotions and topical strips.

It would also create a Division of Marijuana Control overseen by a 13-member commission within the Ohio Department of Commerce. In addition, the bill would give smaller Level II cultivators an opportunity at a dispensary license.

 

Verde Compliance Partners Executive Director Harry Bernstein, whose Cleveland-based firm works with growers and processors on the registration of their businesses, views S.B. 9 as a net-positive. Yet, the bill does nothing to push recreational use in Ohio, and may be used by legislators as a salve for true change within the state, he says.

“It’s a good bill that will help people, but it’s not what voters want," Bernstein says. "They want to be treated as adults and be able to walk into a store and reasonably consume the product. That giant sucking sound is the money leaving Ohio and going into neighboring states.”

Engaging a Conversation

Meanwhile, the Coalition to Regulate Marijuana Like Alcohol—a group of cannabis business owners focused on legalization—reached a settlement in May 2022 in their lawsuit against Republican lawmakers to put the proposal on the November 2023 ballot. Backers must collect 130,000 signatures over an eight-week period (leading up to a July 5 deadline) to qualify for the ballot.

Whether or not this happens, Bernstein is readying growers and processors for the inevitability of federal regulation. Verde works with clients on the registration of their businesses, offering full-service consultation, pre-qualification analysis and ongoing support for owners readying their foray into a soon-to-be legitimate marketplace. 

As a former general counsel in the beer and wine wholesale space, Bernstein would like cannabis to be treated like alcohol. In practice, this means more reasonable tax rates along with  dispensary licenses distributed by population, as is the case with alcohol licenses.

“Otherwise, the illegal market will continue to live, and that’s not good for anyone,” says Bernstein.

Ohio can increase the number of dispensaries without oversaturating the market, says Emile Ramach, vice president of business development with Columbus-based cannabis processor Beneleaves.

“More dispensaries, especially in rural locations, can provide better patient access and help to spread continued awareness of our medical cannabis program,” Ramach said in an email. “An adult-use market could also break the stigma that currently surrounds our industry. In addition, this will help combat the opiate crisis our state currently faces.”

Education will be key in setting up wins for the months and years ahead, says Berry. Considering President Joe Biden’s decision to pardon people convicted of cannabis possession charges at the federal level, state lawmakers and the community at large still have much to learn about an industry that continues to evolve. 

“We need town hall meetings to let license owners voice their opinions—to at least hear them out,” Berry says. “There needs to be more conversation, and that conversation can help with consumers, too.”