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Cannabis Licensing Requirements in Ohio: State-Specific Regulations and Laws

As of Summer 2021, Ohio is preparing to open the gates to a truly exciting opportunity in the state’s booming cannabis industry: As part of the Ohio’s cannabis licensing requirement, a call for applications for some 73 medical dispensary licenses, to join the Buckeye State’s current total of 60 (only 57 of which are provisionally licensed as of this moment). If all these licenses are issued, it will more than double the state’s total of dispensaries, up to 130. But there’s more to cannabis licensing requirements in Ohio.

Competition for these licenses is expected to be fierce, and we urge anyone interested in entering the cannabis industry there to familiarize themselves with the current license application process and specifics for medical cannabis dispensaries. If you’re looking to enter the Ohio cannabis industry, we want to help. We’re a team of seasoned cannabis industry veterans, with decades of combined experience and a proven approach to cannabis business licensing. With that in mind, here’s an overview of cannabis licensing requirements in Ohio.

Cannabis Licensing Requirements in Ohio: The Dispensary Application Process

Following the lead of other states such as Connecticut, Ohio is instituting a lottery process with this round of dispensary licenses. For applicants, this means that—once they’ve demonstrated their suitability on the strength of their application—they’ll be entered into a lottery within their respective districts. The goal is to provide a more transparent, streamlined and fair process. And it means that in addition to paying extra-careful attention to all the details in their application, potential licensees will need to have a firm grasp on the state’s current and proposed geographic distribution of dispensaries.

All told, Ohio has 31 medical marijuana districts, with the Ohio Board of Pharmacy dictating how many dispensary slots will be made available per district. The Board’s calculations will depend upon such factors as: 

  • Total population of the state
  • The number of patients seeking access to medical marijuana
  • The geographic distribution of current dispensary sites

The goal of the forthcoming request for applicants is to increase the number of dispensaries in several districts. For instance, the number of Hamilton Country dispensaries will rise from 3 to 11; Franklin County dispensaries going from 6 to 15, and Cuyahoga dispensaries going from 5 to 12. 

While potential licensees may submit applications in any number of districts, no more than 66% of licenses in any one district will be awarded to a single applicant. And regardless of which district (or districts) you plan to apply for a license in, it’s important to understand that such applications are scored on the basis and strength of their business plan, their operations plan, and their patient care plan. What follows is by necessity an overview; we urge you to familiarize yourself with the specifics in the state’s Dispensary Application Instructions.

  • Business Plan: In addition to being a requirement for a dispensary license application, a well-crafted business plan is a vital roadmap for you and your team. From the licensing board’s point of view, it’s your single best opportunity to demonstrate your organizational and entrepreneurial knowledge, your grasp of the commercial and regulatory playing field, and the ways your business will positively impact the community you serve. Over and above this, having an airtight and realistic cannabis business plan is a major factor in your ability to attract investors, partners, and other key players. 
  • Operations Plan: How will you ensure that your facility is in compliance with the state’s security, diversion, public safety, and other requirements? All this information and more should be included in your operations plan. Think of it as your guidebook for all your daily, weekly, monthly, and yearly operations, an “operators manual” for running a successful, compliant, and profitable cannabis business.
  • Patient Plan: Ohio’s requirement for a patient plan includes three sections: Staff education and training; patient care and education; and patient care facilities. The state expects applicants to describe the educational content given to employees during their training, as well as the duration, source, and frequency with which they’re updated. What’s more, the state requires specific information on the nature, layout, and size of all areas devoted to patient care. As with all aspects of the application, it’s a highly granular list of requirements demanding close attention to detail and planning.

Cannabis Licensing Requirements in Ohio: The Regulatory Framework

Of course, dispensaries aren’t the only types of cannabis business license opportunities. Ohio’s medical cannabis program, administered through the Ohio Medical Marijuana Control Program (OMMCP), currently allows for four types of cannabis business license:

  • Cultivation: In Ohio, cannabis cultivation is licensed and regulated by the Department of Commerce (ODC). Its guidelines specify two types of licenses—Level I and Level II—and it’s important to note that at present, applicants may only apply for or hold one of the two types:
  • A Level I Cultivator License permits a cultivator to operate up to 25,000 square footage of space designated as a cannabis cultivation area. The ODC may issue up to 12 Level I Cultivator Licenses. The application fee is twenty thousand dollars ($20,000). In addition, it’s an Ohio cannabis licensing requirement that licensees must establish and maintain an escrow account in an in-state chartered financial institution in the amount of at least $750,000.
  • A Level II Cultivator License permits a cultivator to operate up to 3,000 square footage of space designated as a cannabis cultivation area. As with Level I licenses, the ODC may issue up to 12 Level II Cultivator Licenses. The application fee is $2,000; as with Level I licenses, licensees must establish and maintain an escrow account in an in-state chartered financial institution, but in this case, the minimum amount is $75,000.
  • Processing: Also regulated by the Department of Commerce, these licenses regulate processors of medical marijuana. These businesses can take several forms, including: Standalone facilities; vertically integrated facilities; and plant-only processors which distribute plant material directly to licensed dispensaries.

Regardless of the type, license holders are allowed to obtain medical marijuana from one or more licensed cultivators and process cannabis into a form as described in the state’s laws and regulations, as well as sell and/or deliver processed cannabis to one or more licensed retail dispensaries. The ODC may issue up to 40 processor licenses; the application fee for such licenses is $10,000.

  • Testing: The Department of Commerce regulates these licenses, which are granted to both universities and privately operated laboratories. There is no limit to the number of testing lab licenses that may be awarded by the Department.
  • Medical Dispensaries: In Ohio, medical cannabis dispensaries are regulated by the Board of Pharmacy (BOP). The number of dispensary licenses awarded is calculated based on population density, geographic area, and other factors. For instance, a dispensary may not be less than 500 feet from a school, church, public library, public playground, or public park. What’s more, local municipalities may impose their own zoning laws; you can find a complete list of guidelines and requirements in the state’s laws and regulations.

The application fee for a dispensary license is $5,000. What’s more, applicants must provide proof they have adequate liquid assets to cover all expenses and costs of the first year, currently defined by the state as a minimum of $250,000.

In Conclusion

If you’re serious about entering the Ohio cannabis industry, we’d like to help. As a partnership of highly skilled and seasoned cannabis industry consultants and guides, Bridge West is ready to help new and emerging cannabis companies find financial and banking solutions, connect with potential stakeholders, understand the Ohio cannabis licensing requirement, and chart a course for success in this exciting—but challenging—new landscape. Feel free to reach out to us anytime to schedule a consultation.