Tony Lange | Cannabis Business Times
The Ohio Division of Cannabis Control (DCC) is just about wrapped up with its licensing process to allow existing cultivators, processors and testing laboratories to participate in the state’s adult-use marketplace after issuing 32 more permits July 31.
To date, the DCC has issued dual-use certificates of operation—allowing businesses to serve both the medical and adult-use cannabis markets—to 66 of 86 licensees that applied for permits in these three licensing categories:
- 6 approved testing laboratories (of 7 that applied for dual-use licensure)
- 29 approved cultivators (of 37 that applied for dual-use licensure)
- 31 approved processors (of 42 that applied for dual-use licensure)
Meanwhile, 134 dispensaries remain in the provisional licensing queue for adult-use operations. This means they turned in their paperwork after the application period opened June 7 and are now awaiting final approval from the state.
While the voter-approved statutory deadline for the DCC to begin issuing dual-use certificates of operation to dispensaries is Sept. 7, state officials said at the start of the process that they planned to prioritize licensing cultivators, processors and testing laboratories to help ensure the entire supply chain is functional before giving dispensaries the go-ahead to launch adult-use sales.
That prioritization is nearly complete, with 77% of cultivators, processors and testing labs having the green light as of July 31. Included in the most recent licensing batch were some of Ohio’s larger Level I cultivators, such as New York-based The Cannabist Co., and Ohio-based Standard Wellness and Buckeye Relief.
These Level I cultivators were allowed to grow up to 25,000 square feet of canopy under Ohio’s medical cannabis program but can now expand to 100,000 square feet under the state’s adult-use regulations approved by voters in the November 2023 election. Level II cultivators can expand from 3,000 to 15,000 square feet. In addition, the state plans to issue 40 Level III cultivation licenses to social equity operators who can grow up to 5,000 square feet.
Located just east of Cleveland, Buckeye Relief’s cultivation and processing facility began preparations to expand its operations in recent months, CEO and co-founder Andy Rayburn previously told Cannabis Business Times. These preparations include increasing staff by roughly 30% at the cultivation facility and 50% at the company’s three retail facilities and tripling inventory.
RELATED: Ohio’s Adult-Use Cannabis Sales Launch: What to Know
But one central question he and other Ohio cannabis operators continue to receive is: When will adult-use sales start?
In addition to cultivation and processing, Buckeye Relief operates three Amplify stores in Cleveland Heights, Columbus and Bedford (Northeast Ohio). Like many other Ohio medical cannabis business owners, Rayburn has worked closely with state officials to help establish the adult-use program, he told Sounds of Ideas Host Jenny Hamel on July 31 during NPR’s Ideastream Public Media broadcast in Cleveland.
“They’ve actually been really working night and day to try and get this program started properly,” he said. “We expect it to be started any day now, but the detail and the number of licenses involved is fairly overwhelming. So, they’re getting there as quickly as they can. … We literally expect the nonmedical, adult-use market any day now.”
“Any day now – so imminent?” Hamel asked.
“Very,” Rayburn said. He later added, “We’re all just sitting and waiting.”
The waiting game for dispensaries is two-fold: First, state regulators must finish prioritizing other license types. Second, they must review dispensaries’ operating procedures to ensure specific requirements are met, such as updated point-of-sales systems that can handle both medical patients and adult-use customers, who are taxed differently and whose purchases are priced and tracked differently.
Once the DCC shifts its licensing priorities and begins issuing dual-use certificates of operation to dispensaries, these retail facilities will be able to launch adult-use cannabis sales to those 21 and older swiftly. State regulators have not established a singular day for an adult-use sales launch but rather are leaving it up to dispensaries to determine if they’re adequately staffed and supplied upon receiving their final licensure.
While adequate supply is often a concern when a state’s medical cannabis market transitions to adult-use sales, several Ohio operators have told CBT their dispensaries are stocked at total capacity and inventory at their cultivation facilities have doubled or tripled.
And double or triple is a good indicator in states that have already made the jump to adult-use markets as far as sales numbers go. For example, Michigan’s market grew from $272 million in medical-only sales in 2019 to $985 million in combined adult-use and medical sales in 2020.
More recently, Maryland, which launched adult-use sales in July 2023, reported $1.1 billion in combined adult-use and medical sales during the first 12 months of its expanded program, more than doubling the $486 million in medical-only sales during the preceding 12 months.
While Ohio has nearly double the population of Maryland, its medical market is similar in that Ohio’s dispensaries sold $484.5 million in medical cannabis in 2023. In addition, Maryland launched its adult-use program with roughly 100 existing medical dispensaries.
After Ohio’s adult-use sales rollout with the 134 dispensaries that applied for dual-use licensure, the DCC plans to issue another roughly 170 dispensary licenses to medical cannabis companies and 50 dispensary licenses to social equity applicants.
State regulators will reassess market conditions after 24 months to determine if more licenses are needed.
