Ohio regulators have released proposed rules for the state’s pending recreational marijuana program.
The 11-page document includes proposed fees for various business licenses, details on how the application process would work and information on how medical cannabis businesses could transition to a dual license to also serve adult-use consumers.
Ohio Adult-Use Cannabis Program Overview
The state of Ohio legalized adult-use cannabis through ballot initiative, Issue 2, allowing for controlled and regulated sales and use of adult-use cannabis. The law provides a regulatory framework for cultivating, producing, and selling adult-use marijuana. Within nine months of the effective date of the law, if the license applicant is in compliance with the regulations, medical licenses will have the opportunity to convert to dual-use.
Ohio Adult-Use Cannabis License Information
Marijuana Business Types
Cultivator License – A licensed cultivator may cultivate marijuana, including the acquisition of seeds or clones necessary to begin cultivation of a particular cultivar or strain of marijuana, and deliver or sell marijuana to one or more licensed processors or retail dispensaries. There are three types of cultivation licenses:
- Level I cultivators shall be permitted to expand to a marijuana cultivation area of up to one hundred thousand square feet;
- Level II cultivators shall be permitted to expand to a marijuana cultivation area of up to fifteen thousand square feet.
- Level III cultivators may have up to five thousand square feet in cultivation area.
The division of cannabis control shall issue up to forty (40) level III adult use cultivator licenses, with preference provided to applicants who have been certified as cannabis social equity and jobs program participants.
Processor License – A licensed processor may do any of the following:
- Obtain marijuana from one or more licensed cultivators, processors, or retail dispensaries
- Process marijuana obtained from one or more licensed cultivators
- Deliver or sell processed marijuana to one or more licensed retail dispensaries.
Retail Dispensary License – A licensed retail dispensary may do any of the following:
- Obtain marijuana from one or more cultivators, processors, or other retail dispensaries, if the retail dispensaries have common ownership;
- Dispense or sell marijuana and paraphernalia in accordance with division
- Beginning two hundred forty days after the effective date of this amendment, dispense or sell marijuana and paraphernalia to adult consumers
- Deliver marijuana, marijuana, paraphernalia, and accessories specified in the rules adopted to registered patients and adult consumers.
The division of cannabis control shall issue up to fifty (50) additional adult-use dispensary licenses with preference provided to applicants who have been certified as cannabis social equity and jobs program participants.
Testing Laboratory License – A licensed laboratory may do both of the following:
- Test the marijuana for potency, homogeneity, and contamination;
- Prepare a report of the test results.
The state board of pharmacy department of commerce are to issue a sufficient number of testing laboratory licenses to ensure cultivators and processors are able to receive reliable and timely testing results.
Following twenty-four (24) months from the first date of issuance of an adult use operator license, the division of cannabis control shall review the number of adult-use cannabis operator licenses on a biannual basis and may authorize additional licenses.
In the interest of remedying the harms resulting from the disproportionate enforcement of marijuana-related laws, a cannabis social equity and jobs program shall provide financial assistance and license application support to individuals most directly and adversely impacted by the enforcement of marijuana-related laws who are interested in starting or working in cannabis business entities. Individuals who have been arrested or incarcerated due to drug laws suffer long-lasting negative consequences, including impacts on employment, business ownership, housing, health, and long-term financial well-being.
- A system of certifying cannabis social equity and job program applicants will be established based on a requirement that the business owner or owners show both social and economic disadvantage based on the following, as determined to be sufficient by the department of development:
- Wealth of the business seeking certification as well as the personal wealth of the owner or owners of the business.
- Social disadvantage based on any of the following:
- The business owner or owners demonstrate membership in a racial minority group or show personal disadvantage due to color, ethnic origin, gender, physical disability, or long-term residence in an area of high unemployment;
- The owner or owners, or their spouse, child, or parent, have been arrested for, convicted of, or adjudicated delinquent for a marijuana related offense as determined by rule by the department of development prior to the effective date of this section.
- Economic disadvantage based on economic and business size thresholds and eligibility criteria designed to stimulate economic development through license awards to businesses located in qualified census tracts.
Medical Marijuana Program Overview
The state of Ohio passed House Bill 523, effective on September 8, 2016, legalizing medical marijuana in Ohio. The Ohio Medical Marijuana Control Program (OMMCP) will allow people with certain medical conditions, upon the recommendation of an Ohio-licensed physician certified by the State Medical Board, to purchase and use medical marijuana. Access to medical cannabis is through state-licensed businesses that are allowed to grow, manufacture and sell medical cannabis.
Medical Marijuana License Information
Marijuana Business Types
Ohio Medical Cannabis Cultivator:
- Allowed to grow medical marijuana and deliver or sell it to one or more processors
- Level I cultivators are permitted to operate an initial marijuana cultivation area up to 25,000 square feet.
- The state issued 23 Level I cultivators’ provisional licenses, and 21 have been issued Certificates of operation.
- Level II cultivators are permitted to operate an initial marijuana cultivation area of 3,000 square feet. Licensees may submit an expansion request pursuant to the cultivators’ rules.
- The state issued 14 Level II cultivators’ provisional licenses and 13 have been issued Certificates of operation.
- The current application period for cultivators is closed.
Ohio Medical Cannabis Processor:
- A processor manufactures medical marijuana products. There are three types of processors
- Vertically integrated facilities
- Plant-only processor (cultivator who distributes plant material directly to dispensaries)
- The holder of a processor license may do any of the following:
- Obtain medical marijuana from one or more licensed cultivators.
- Process medical marijuana obtained from a cultivator into a form that may be dispensed.
- Deliver or sell processed medical marijuana to one or more licensed retail dispensary.
- When processing medical marijuana, a licensed processor must package it according to federal child-resistant effectiveness standards in effect in the bill’s effective date.
- A processor must also label the packaging with the product’s tetrahydrocannabinol and cannabidiol content and comply with any packaging or labeling requirements established in rules adopted by the Department of Commerce.
- The state issued 46 Processor provisional licenses and 44 have been issued Certificates of operation.
- The current application period for processors is closed.
Ohio Medical Cannabis Testing Labs:
- Allowed to obtain medical marijuana from licensed cultivators, processors, and retail dispensaries and may conduct testing on the marijuana.
- When testing, a licensed laboratory must test for potency, homogeneity, and contamination and prepare a report of test results.
- There is no limit to the number of testing lab licenses that may be awarded by the department.
- Testing laboratories include both universities and private labs
Ohio Medical Cannabis Dispensary:
- Allowed to obtain medical marijuana from one or more processors and may dispense or sell it to patients.
- The state issued 134 Dispensary licenses.
- The current application period for medical dispensaries is closed.