On December 7, 2023, Ohio passed its adult-use cannabis statute, making it legal for adults ages 21 and older to buy and possess up to 2.5 ounces of cannabis for recreational use. With the passage of this statute, legal adult-use sales are projected to exceed $1 billion annually. In addition to cannabis possession, the statute also regulates the cultivation, processing, sale, purchase, and home growth of cannabis.
Because Ohio has already had a medical cannabis market for several years, the new adult-use statute creates opportunities for new growers, processors, and retail dispensaries to join the Ohio marketplace. The Ohio Division of Cannabis Control (“DCC”) is promulgating new rules regarding adult-use cannabis license applications. The DCC recently published its proposed rules, which provide for two application rounds for adult-use licenses for existing medical marijuana growers, processors, and dispensaries. The rules provide for a first application round which would simply convert an existing facility to a “dual license” facility. This type of “dual license” conversion allows the licensee to participate in both the recreational and medical cannabis markets. Currently, the dual license application for this round has no application fee.
The rules then set out the process for a second round of competitive applications for the other type of license, which is designated a 10(B) license. Although this type of license also requires that the applicant be a currently licensed Level I or II medical marijuana cultivator, the advantage of the 10(B) license is the right to open additional retail dispensaries (which is the distinction between this class and the “dual use” license). Applications for a 10(B) license carry a $5,000 application fee. Licensed Level I cultivators are eligible for up to three 10(B) dispensary licenses. Level II cultivators and standalone medical dispensaries can obtain one 10(B) license. All 10(B) applicants who are determined eligible will be entered into a ranked drawing conducted by a third-party operator, which will be separated into two phases. Once a dispensary has a provisional license, it then must obtain a certificate of operation within 12 months.
Applications for both of these types of licenses will be available by June 7, 2024. On September 7, 2024, the DCC will begin granting provisional recreational licenses to these types of facilities. The DCC has also indicated that for applicants who do not currently hold a medical marijuana license, it will hold a round of applications for up to 40 Level III adult-use cultivator licenses, and 50 adult-use dispensary licenses at a future time, with deadlines to be established later.
Should you have any questions about this legislation, please contact one of the co-chairs of Reminger’s Cannabis and Hemp Law Liability Practice Group, Mark Bush and Nathan Lennon.
