Ohio Issues 1st Batch of Adult-Use Cannabis Certificates, Igniting the Market

Editor’s note: This article was updated July 19 to include comments from Pure Ohio Wellness, one of the companies to receive dual-use licensure for both its cultivation and processing operations.

Ohio’s adult-use cannabis market is officially up and running—well, at least for four cultivators and six processors.

The state’s Division of Cannabis Control (DCC) issued the first batch of dual-use certificates of operation to these businesses on July 19, providing them the green light to start supplying the state’s commercial adult-use marketplace.

Another 31 cultivators, 36 processors, seven testing laboratories and 133 dispensaries in the provisional licensing queue remain next in line for certificates. Before issuing final licensure, the DCC must determine whether these businesses meet final requirements—from security/surveillance systems to employee badging to point-of-sale systems.

While it will take a little longer for the Buckeye State to start firing on all cylinders across the supply chain, the first batch of certificates issued Friday marks a crucial step toward the program becoming fully functional. The DCC has clarified that it intends to convert cultivators, processors and testing labs to dual-use licensure—to operate in both the medical and adult-use programs—before dispensaries. 

RELATED: Ohio’s Adult-Use Cannabis Sales Launch: What to Know

The first batch of dual-use certificates included Youngstown, Ohio-based Riviera Creek Holdings, which began operating in the state’s medical market in January 2019.

Riviera Creek’s 75,000-square-foot cultivation and processing facility has nearly 20,000 square feet of canopy. Approximately 5,000 square feet of that canopy was added on after Ohio voters approved the state’s adult-use initiative in November, CEO Daniel Kessler told Cannabis Business Times.

“We have approximately 5,000 [square feet] more currently under construction, which will be operational during 2024,” he said. “We have additional expansion plans for 2025 and 2026 to fill the remainder of the building. We have added about 20 full-time positions since the initiative passed. That trend will continue as the additional capacity is added.”

The company received notification this week that the DCC approved its application for a dual-use certificate of operation to enter the adult-use market.

“Riviera Creek is thrilled to earn a dual-use license and looks forward to providing its top-tier products to adults across the state of Ohio,” Kessler said.

The DCC also approved dual-use certificates of operation for Pure Ohio Wellness, which operates a 53,000-square-foot cultivation and processing facility in Springfield, just outside of Dayton. The facility includes 25,000 square feet of canopy.

The company, which has operated in Ohio’s medical market since November 2018, also has licensed dispensaries in Dayton and London.

“It means a lot to us,” Pure Ohio Wellness Chief Operating Officer Tracey McMillin told CBT about being among Ohio’s first cultivators and processors to receive dual-use licensure. “We have been ready for a few months to start providing our products to the medical and recreational customers in Ohio, and this brings us one step closer.”

In anticipation of the adult-use marketplace, Pure Ohio Wellness increased its flower production by building out its current flower, vegetative and mother rooms with vertical grow racks, McMillin said, doubling the company’s production capacity.

“We have been approved for a total of 100,000 square feet of canopy and are currently in the pre-construction phase of the first step of our expansion plan, which is a 30,000-square-foot facility that will house nine more flower rooms with fertigation, another propagation area as well as a new packaging and quality control area, shipping and some storage space,” she said. “This will allow us to utilize some of the packaging space in our current facility to allow for growth in our processing lab as well as more than double our flower production.”

Following is a list of the 10 cultivators and processors included in the DCC’s first dual-use certificates of operation batch:

What Does This Mean?

Dual-use businesses must continue to comply with all packaging and labeling requirements under the state’s medical cannabis rules for cultivators and processors, as well as general advertising rules and marketing and signage rules, until final rules are adopted under the adult-use program, according to the DCC.

Once cultivators or processors are issued a dual-use certificate of operation, they must begin using their new dual-use license number and affix the DCC seal on any new packaging and labeling printed after the issuance of the dual-use license. The seal must be on the front of the packaging, a minimum of 1/4 inch by 1/4 inch and printed in color, according to the DCC.

“This seal benefits entities licensed by the Division of Cannabis Control by distinguishing licensee products from other unlicensed, unregulated products, and helps protect patients and consumers who can know by seeing this seal on packaging that the product is tested and regulated,” according to DCC guidance.

Since many cultivators and processors often prepare and package products before those packages are transferred to a dispensary, the division is allowing these business types with dual-use licensure to continue transferring products with their medical cannabis license numbers until Oct. 14.

Moreover, dispensaries can continue selling any products labeled with a medical license number. However, after Oct. 14, they cannot accept new products with medical cannabis license numbers from dual-use cultivators or processors.

While Ohio’s voter-approved adult-use legalization statute requires the DCC to begin issuing dual-use licensure to dispensaries by Sept. 7, the division plans to start issuing these licenses after prioritizing cultivators, processors and testing labs. Once DCC officials issue their first batch of dual-use licenses to dispensaries, those dispensaries can begin serving adult-use customers at their discretion—there’s no singular launch date.

“It will be up to the retailer based on staffing, stock and other considerations as to which day they will begin sales,” Jamie Crawford, public information officer with the Ohio Department of Commerce, previously told Cannabis Business Times.

For dispensaries to receive dual-use certificates of operation, the following additional conditions must be met:

• Licensees must ensure the confidentiality of all patients, caregivers and adult-use consumers. No one is permitted to photograph or record patients or other dispensary visitors without their consent.
• Anyone accessing a secured limited-access area must sign-in on the visitor log, wear a visitor badge at all times, and be escorted and monitored by a dispensary employee.
• No one is permitted to take photos or recordings of a secured limited-access area unless the division has approved them in writing.

In anticipation of Ohio’s adult-use sales launch, the DCC issued guidance on July 18 for permissible activities on a dispensary’s “opening day.”

Specifically, with prior division approval, dispensaries are allowed to have non-live music inside their stores, offer complimentary nonalcoholic beverages inside their stores, and have approved signage, celebratory décor and ribbon cuttings inside their stores.

The following activities are prohibited:

• No consumption of cannabis
• No samples—infused or uninfused
• No music outside the dispensary
• No food trucks/other food offered for sale or complimentary
• No product displays outside the dispensary
• No celebratory décor/unapproved signage outside the dispensary
• No ribbon cuttings outside the dispensary

These restrictions extend to a dispensary’s premises, parking lots and any property over which the dispensary has control, according to the DCC.

Prior to issuing dual-use certificates of operation, the DCC will provide each retailer with vinyl stick-on dispensary logo seals that must be affixed to the public entrance of stores to help the public distinguish the licensed facility from unlicensed and unregulated entities. 

Roughly 130 existing dispensaries will be the first to serve Ohio’s adult-use customers. The state’s medical cannabis companies are eligible to open approximately 170 additional adult-use dispensaries. The DCC will also issue another 50 dispensary licenses and 40 cultivation licenses to social equity applicants.

Once Ohio launches adult-use sales, it will be the 21st state in the nation to do so, beating Delaware and Minnesota—which also legalized last year—to the punch. Bordering states Pennsylvania, Indiana, Kentucky and West Virginia have not legalized adult-use cannabis, but their residents who are 21 and older will be able purchase products at Ohio’s adult-use dispensaries. 

With nearly 12 million residents, Ohio will be the fourth most populated state to launch adult-use sales after California, New York and Illinois.