Ohio Adult-Use Dispensary Licenses to be Issued by Sept. 7

Ohioans are a little more than six months away from being able to purchase adult-use cannabis at licensed dispensaries, according to the state’s Division of Cannabis Control (DCC), which is tasked with issuing licenses by Sept. 7.

Currently, those 21 and older in the Buckeye State can already possess up to 2 1/2 ounces of cannabis or 15 grams of extract and home grow up to six plants per person or 12 plants per household, but they have nowhere to legally buy it without travelling out of state.

Under Issue 2, the adult-use ballot measure Ohio voters passed with a 57.2% majority in November, DCC regulators are responsible for making initial applications available by June 7, 2024, for existing medical operators wishing to expand to the adult-use marketplace. This includes current medical cannabis cultivators, processors, testing laboratories and dispensaries.

The DCC is then required to issue provisional licenses to successful applicants by Sept. 7.

Although Ohio’s General Assembly can amend the voter-approved statutory measure—which Gov. Mike DeWine and Senate leaders have pushed to do—resistance from Ohio House Speaker Jason Stephens in making changes means this timeline for licensure will likely remain intact.

DCC Superintendent Jim Canepa confirmed the Sept. 7 date for issuing adult-use licenses last week with WBNS, a Columbus-based CBS affiliate. Notably, Canepa indicated that he expects Ohio cannabis consumers to begin shifting from unregulated products to licensed dispensary sales from the onset of the state’s market launch.

“If there are customers who have the choice between getting products that are not tested for pesticides and heavy metals and molds and bacteria, E. coli, and a product that is legal and tested and safe and sold by somebody with a permit who is required to follow the law versus some underground exchange in an alley, I think the choice is pretty clear,” Canepa told the news outlet.

Issue 2 places a 10% excise tax on dispensary sales, which is in addition to the Ohio’s 5.75% sales tax and up to a 2.25% local tax, depending on the municipality. However, Senate Republicans have proposed amending this statute to include a 15% excise tax at retail. Ohio lawmakers can make this change, and others, at any point in time since Issue 2 wasn’t a constitutional measure.

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Although DCC regulators plan to issue adult-use dispensary licenses to existing medical cannabis operators by Sept. 7, these operators cannot begin sales until their retail facilities are certified by the state and meet local zoning requirements.

Under the DCC’s proposed rules, adult-use dispensary sites cannot be located within 1 mile of an existing dispensary or the proposed site of another applicant nor within 500 feet of a church, public library, public playground, public park or school.

Notably, medical cannabis retail operators who choose to pursue a “dual-use” cannabis dispensary license at their current locations must ensure that their facilities equally serve and accommodate medical patients, caregivers and adult-use consumers alike, and that ongoing inventory is sufficient to adequately supply the demand from the patient and caregiver population, according to the DCC rules.

In addition, dual-use dispensaries must dedicate medical-only hours for patients and caregivers, expanded options for medical cannabis delivery and online ordering, and point-of-sale accommodations that service patients and caregivers before adult-use consumers.

Medical cannabis cultivators, processors and testing labs are also eligible to receive dual-use licensure for their respective operations.

There is no application fee for existing medical cannabis licensees to convert their facilities to dual-use licenses, according to DCC. But there is a $5,000 nonrefundable application fee for licensure of new sites.

There are 23 Level I medical cultivators in Ohio who could apply for up to three adult-use dispensary licenses, and 14 Level II cultivators who could apply for one adult-use dispensary license each, according to DCC. However, many of these cultivators are already vertically integrated with retail sites.

Each medical cannabis dispensary that is not commonly owned or controlled by a cultivator or processor can apply for an adult-use dispensary license. There are 120 certified medical cannabis dispensaries and 12 provisional retail licensees in Ohio, but, again, many of these are operated by existing cultivation licensees.

Beyond the existing medical cannabis operators, Issue 2 provides for a future licensing round for an additional 40 cultivators and 50 dispensaries. These licenses will be issued to applicants with a preference to participants of a forthcoming Cannabis Social Equity and Jobs Program that the Department of Development is required to establish.

Additional licenses could be awarded 24 months later based on market conditions.