Update on Potential Legalization of Adult-Use Marijuana in Ohio: A Look into the Proposed Act and Its Implications

Cannabis Blog Aug 3, 2023 Ohio

Today, the Coalition to Regulate Marijuana Like Alcohol stated that it has collected the necessary signatures to put its adult-use marijuana initiative on Ohio’s November ballot. Thus, it appears that voters in Ohio will have an opportunity to legalize adult-use marijuana in the fall.

If approved by voters, the initiated statute, titled An Act to Control and Regulate Adult Use Cannabis (the “Act”), would legalize and regulate the cultivation, manufacturing, and sale of marijuana in Ohio for adults who are at least 21 years old. Pursuant to the Act, Ohio residents would be permitted to cultivate up to six marijuana plants at their primary residence, with a maximum of twelve plants per residence where two or more persons who are at least 21 reside, and marijuana sales would be subject to a 10% adult-use tax, in addition to the traditional sales tax.

The Act also establishes a Division of Cannabis Control (“DCC”) within the Ohio Department of Commerce. The DCC would be responsible for overseeing the adult-use market with the authority to license, regulate, investigate, and penalize licensees and those required to be licensed under the Act. This centralization is meaningful because currently, under Ohio’s Medical Marijuana Control Program, dispensaries are regulated by the State of Ohio Board of Pharmacy while cultivators, processors, and testing laboratories are regulated by the Ohio Department of Commerce. The establishment of the DCC is expected to alleviate certain headaches resulting from the inter-agency regulatory overlap.

Another important impact of the An Act to Control and Regulate Adult Use Cannabis, and a result of adult-use legalization generally, is that the medical program’s burdensome advertising restrictions are expected to be relieved significantly. As many Ohio licensees are aware, Ohio currently has very restrictive, burdensome, and, at times vague, advertising rules related to medical marijuana that significantly reduce the impact and effectiveness of marketing and advertising. With the legalization of adult-use marijuana, Ohioans can expect to see more creative and targeted advertising through more traditional outlets.

The Act also provides a significant boost to existing industry participants. Licensees who have either a certificate of operation or provisional license as of the effective date of the Act will be grandfathered into the adult-use program as follows:

Dispensary licensees will be issued an adult-use dispensary license for its current location and a second location if the dispensary licensee does not have any common ownership or control with any level I adult-use cultivator, level II adult-use cultivator, or adult-use processor;
Level I cultivators will be issued three adult-use dispensary licenses at locations designated by application and a level I adult-use cultivator license for their current facilities;
Level II cultivators will be issued one adult-use dispensary license at a location designated by application and a level II adult-use cultivator license;
Processors will be issued an adult-use processor license for their current locations; and
Testing laboratories will be issued an adult-use testing laboratory license for their current locations.

Importantly, there will be an opportunity for new operators to enter the Ohio market through a cannabis social equity and jobs program. At the outset, the DCC is to issue 40 recreational cultivator licenses and 50 adult-use dispensary licenses “with a preference” to applicants who are participants under the cannabis social equity and jobs program.

Our cannabis team is excited about the developments and opportunities in the Buckeye State. Be sure to continue to check our blog for updates and reach out to the author (Adam Koscielski, [email protected]) to discuss licensing and opportunities in Ohio.

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Update on Potential Legalization of Adult-Use Marijuana in Ohio: A Look into the Proposed Act and Its Implications

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