Ohio has become the 24th state to give the green light to an adult-use cannabis market. As the whole country gets closer to making cannabis legal in many states, Ohio is now working on establishing the rules for this new industry. If you’re thinking about starting a business in this market, it’s important to know Ohio’s cannabis laws and license timelines to get your business started the right way.
In this post, we’ll discuss the regulatory guidelines for cannabis businesses in Ohio and explore the timelines associated with obtaining licenses.
Ohio’s Cannabis License Timeline:
According to the new guidelines, the state’s adult-use cannabis rule will be starting on December 7, 2023, the Division of Cannabis Control (DCC) will provide rules covering categories like labeling, tracking, testing, advertising, security, inventory, and delivery standards. DCC will also be establishing a process for license applications which is set to be released by June 7, 2024. License issuance will start on September 7, 2024. The DCC will handle applications and permit licenses for four types of licenses: adult-use cultivator, processor, dispensary, and testing laboratories.
What Type of Cannabis Business Licenses Available in Ohio?
Ohio offers four distinct types of cannabis business licenses; processor, cultivator, retail dispensary, and testing laboratories.
Processor License:
- A licensed processor has the authority to acquire marijuana from licensed cultivators, processors, or retail dispensaries.
- A processor license is authorized to deliver or sell cannabis and cannabis products to other licensed retail facilities.
- Processor licenses can process cannabis-obtained products from licensed growers.
Cultivator License:
- A cultivator license holder can cultivate marijuana and obtain seeds or clones for cultivation.
- A licensed cultivator is permitted to deliver/sell cannabis (and cannabis-related products) to licensed processors or retail store owners.
Location Regulatory Requirements:
- Level I cultivators can expand their cultivation area up to one hundred thousand square feet.
- Level II cultivators can expand their cultivation area up to fifteen thousand square feet.
Note: The Division of Cannabis Control will issue up to forty (40) level III adult-use cultivator licenses, giving preference to applicants certified as cannabis social equity and jobs program participants.
Retail Dispensary License:
- A licensed retail dispensary can acquire marijuana from cultivators, processors, or other retail dispensaries with common ownership.
- Retail dispensary license holders are allowed to dispense/sell cannabis and cannabis related products as per division guidelines.
- Starting two hundred forty days after this amendment’s effective date, dispense or sell cannabis and cannabis related products to adult consumers.
- Deliver cannabis and cannabis related products to registered patients and adult consumers.
Note: The Division of Cannabis Control will issue up to fifty (50) additional adult-use dispensary licenses, with preference given to applicants certified under the cannabis social equity and jobs program.
Testing Laboratory License:
- A licensed laboratory is authorized to test cannabis for potency, homogeneity, and contamination.
- A licensed laboratory is permitted to prepare a report and submit test results.
What is the Adult-Use Cannabis Law in Ohio?
Ohio’s new adult-use cannabis law is still in progress, here are some key elements:
The Department of Commerce will issue adult-use licenses to existing medical marijuana licensees and grant additional licenses to cultivators and independent dispensaries.
Issue 2 maintains current policies for Ohio employers regarding marijuana use and allows zero-tolerance drug policies.
Localities have the option to “opt out” of permitting adult-use dispensaries, with provisions for residents to challenge this decision through local referendums.
Issue 2 introduces a 10% tax, in addition to local sales taxes, on adult-use marijuana sales. The generated revenue will be allocated as follows:
- 36% will contribute to the Host Community Cannabis Fund, benefiting local governments with adult-use dispensaries.
- Another 36% will be directed to the Social Equity and Jobs Fund.
- 25% will support the Substance Abuse and Addiction Fund.
- The remaining 3% will go to the Department to cover general administrative and enforcement costs.
What is Ohio’s Social Equity & Jobs Program and its Licensing Preferences?
Ohio recently approved Issue 2, the adult-use marijuana legalization proposal, and introduced the Social Equity and Jobs Program (SEJP) to address the disproportionate impact of marijuana-related law enforcement. This initiative aims to provide financial assistance and support for license applications to individuals most adversely affected by such enforcement and promoting an equitable cannabis industry.
Funded by 36% of new tax revenue generated by adult-use marijuana sales, the SEJP will be administered by the Ohio Department of Development. To participate, applicants must provide both social and economic disadvantage proofs.
Social disadvantage involves factors like membership in minority groups or personal disadvantages due to color, ethnicity, gender, disability, or residence in high-unemployment areas.
What is the New License Allocation for SEJP Participants?
Issue 2 will introduce 50 new adult-use dispensary licenses and 40 “Level III” cultivation licenses, with a preference for SEJP participants. The allocation of preferences will be based on substantiated evidence to address the SEJP’s goals, ensuring its viability under legal scrutiny.
What are the Cannabis License Application Requirements?
Preparing a license application is just like managing a substantial project which demands tons of paperwork, the collection of numerous documents, and diligent effort. Despite the hard work, there’s no certainty of approval. Hence, to improve your chances of obtaining a license, follow the below-mentioned application requirements.
- All applicants undergo a criminal background check.
- Applicants should not have ownership or compensation ties with other license holders or applicants and should not share corporate offices with them.
- Proposed facilities must be located at least 500 feet away from prohibited locations like churches, public libraries, public playgrounds, public parks, or schools.
- Applicants must demonstrate compliance with tax laws.
- Additional eligibility conditions set by the DCC must also be met.
Required Documents:
- Provide evidence of a minimum two-year state residency for the majority owner of each proposed dispensary and production facility.
- Submit documentation showcasing the applicant’s expertise in controlled environment agriculture, encompassing cannabis cultivation, processing, product development, quality control, and inventory management.
- Provide the possession of ample liquid and non-liquid assets to sustain operations for a period of two years.
- Provide the names, addresses, and dates of birth of any individual holding more than 5% ownership in a dispensary or production facility to be operated under the license.
How to Prepare Your Cannabis License Application in Ohio?
To win a cannabis business license in Ohio on the first attempt, your application must cover various plans to score extra ranking. Here are the vital plans you need to include when preparing your application.
- Security and business plan
- Training and staffing plan
- Environmental impact plan
- Community benefit plan
- Financial plan
- Business operations/continuity plan
- Quality control and assurance plan
- Cultivation and manufacturing plan
- Labor compliance plan
- Dispensing plan
Conclusion:
As Ohio emerges as a key player in the cannabis industry, entrepreneurs are likely to encounter challenges in securing licenses and setting up dispensaries. To ensure success, staying informed about evolving regulatory changes is important. Hence, If the workload seems like a lot, think about hiring an expert to make your journey easy and smooth.
For further assistance, contact our experts here.
Happy Journey!
