How to Open a Dispensary in Ohio: An Expert Guide
By Thomas Howard. He has over 10 years of experience in corporate and cannabis laws nationwide.
Ohio’s cannabis industry offers significant opportunities for entrepreneurs and investors. Understanding the licensing process is crucial for navigating this evolving market successfully. This guide provides a comprehensive overview of obtaining a cannabis license in Ohio, tailored to meet the needs of prospective licensees. Ohio is a very lucrative market for cannabis
Historical Context
In an effort to legalize recreational marijuana for adults aged 21 and over in Ohio, the Coalition to Regulate Marijuana Like Alcohol (CTRMLA) filed an initiative, officially known as An Act to Control and Regulate Adult Use Cannabis, on July 27th, 2021. The campaign had until January 14th, 2022, to collect the required number of signatures, but they initially fell short by 13,062 signatures. However, through additional efforts, enough signatures were obtained by January 28th, 2022, allowing the issue to be formally considered by the state legislature.
In April 2021, the Ohio Board of Pharmacy recognized the growing demand for medical cannabis and approved an increase in the number of licensed dispensaries from 57 to 130. This decision was driven by several factors, including the rise in the patient population, the distance some patients had to travel to reach dispensaries, and the desire to introduce greater competition to lower prices. To fulfill this expansion, the Ohio Board of Pharmacy and Medical Marijuana Control Program issued a request for dispensary applications on September 19, 2021, with the potential to grant up to 73 new licenses. The application period for provisional licenses to operate medical dispensaries closed on November 18, 2022.
In November 2023, Issue 2 was passed, making the recreational marijuana legal in Ohio. This significant development introduces a new licensing category for businesses interested in the cultivation, manufacturing, testing, and sale of recreational marijuana. In December 7, 2023, the Committee Approved a revised bill changing some of the laws and regulations that are initially proposed in Issue 2, a Proposed Law, To Commercialize, regulate, legalize and Tax the Adult use Of Cannabis in Ohio
Current Status of Recreational Marijuana Legalization in Ohio
In a surprising turn of events on December 7, 2023, Ohio’s GOP-controlled Senate committee approved a revised bill that expands the voter-approved marijuana legalization law. The full Senate then approved the legislation in a vote of 28-2.
The bill allows adults to start buying cannabis from existing medical dispensaries in as soon as 90 days. Home cultivation rights are maintained, with adults allowed to grow up to six plants per person (household limit of six plants). The bill also provides for automatic expungements of prior marijuana convictions. This is a significant departure from an earlier proposal that would have effectively re-criminalized possession of marijuana and eliminated home grow.
Key aspects of recreational marijuana legalization
If passed by the full General Assembly and signed into law by DeWine, the bill would:
- Adults are now allowed to cultivate up to 6 cannabis plant.
- Possession Limits: 2.5 Ounces of Cannabis Flower and 15 Grams of Cannabis Extracts.
- Role of the Division of Cannabis Control within the Ohio Department of Commerce in regulating the industry.
- Timeline for the Department of Commerce to finalize rules and issue licenses.
- Integration with Ohio’s existing medical marijuana program.
- Opportunities for existing medical marijuana licensees to obtain recreational licenses.
- Enable existing medical-use cannabis dispensaries to transition into selling both medical and recreational products.
- Eligibility and application process for businesses and individuals aged 21 and up.
- Limit marijuana retailers license to 350.
- Regulations for cultivation, manufacturing, testing, and sale of recreational marijuana.
- A 15% sales tax on recreational marijuana transactions. (up from 10% in the recent bill).
- House bill would impose a 10 percent tax on cultivators’ gross receipts.
This new legal landscape offers expanded opportunities for entrepreneurs and businesses in Ohio’s cannabis market, alongside the existing medical marijuana program.
Medical Marijuana Dispensary License Application
This license allows for the retail sale of medical marijuana to qualified patients and caregivers. It involves stringent compliance with Ohio’s medical marijuana control program, including security measures, product handling, and patient education. Applicants must demonstrate a comprehensive understanding of the medical marijuana market, patient needs, and adherence to health and safety regulations.
Key aspects include:
- Eligibility criteria and application process.
- Operational guidelines and compliance requirements.
- Financial considerations, including fees and operational costs.
- Market analysis and patient demographics in Ohio.
The total cost to open a retail dispensary in Ohio includes an application fee of $5,000, a licensure fee of $80,000, and a renewal fee of $80,000. For more information about Ohio marijuana dispensaries, please visit this link.
Step-by-Step Guide: How to Open a Cannabis Dispensary in Ohio
Obtaining a cannabis license in Ohio involves several steps, as the process is regulated by the state to ensure compliance with legal and safety standards. Here’s a general step-by-step guide to help you understand the process:
Understand the Regulations
- Research Ohio’s Cannabis Laws to familiarize yourself with Ohio’s cannabis laws, including the Ohio Medical Marijuana Control Program (OMMCP).
- Cost and requirements for a medical marijuana dispensary license Application.
Hiring a Cannabis Lawyer
Working with a Cannabis Lawyer who specialize in corporate cannabis law can be a game-changer when applying for a Ohio cannabis license. These lawyers know the ins and outs of state regulations and can ensure that your application is thorough, complete, and in compliance with all legal requirements. Remember, cannabis industry both medical and recreational is a very regulated space. Secure your success by contacting us!
Business Planning
A Solid Business Plan: A detailed plan outlining the business model, market analysis, operational strategy, and financial projections detailing a successful medical marijuana dispensary business.
- Decide on the legal structure of your business for the marijuana business (e.g., LLC, corporation).
- Plan for compliance with state regulations, including security, product tracking, and patient privacy.
Location
Facility Plans: Detailed schematics of the proposed facility, including security measures, product storage & storage, patient privacy, and processing areas.
- Check local zoning laws to ensure your business location is compliant.
- Secure a location that meets state requirements for your type of cannabis business.
Licensing Application
- Monitor the Ohio Medical Marijuana Control Program website for announcements about application availability.
- Gather required documents, which may include background checks, business plans, proof of financial responsibility, operational plans, and a whole lotta paperwork.
- Review and Submit the needed documents for the initial application of a cannabis dispensary license in Ohio.
- Pay the non-refundable application fee of $5,000.
Compliance and Inspection
Compliance Plan: A document demonstrating understanding and preparedness to adhere to all state cannabis regulations, including safety, security, and product handling protocols.
- Ensure your operation is fully compliant with state laws & regulations. It is recommended for Dispensary Owners to consult with a Cannabis Lawyer/Consultant to ensure that everything is on point.
- Be prepared for a state inspection of your facility to verify compliance.
Operational Readiness
- Hire and train staff, ensuring they understand compliance and operational procedures.
- Medical marijuana Dispensaries should also prepare to educate patients on products, usage, and safety.
License Approval and Operation
- Once approved, you will receive your Ohio Dispensary license.
- Secure Funds
- Start your cannabis business operations in compliance with Ohio laws.
Ongoing Compliance
- Submit required reports and documentation to the state regularly.
- Maintain transparency
- Be prepared for license renewals and potential audits.
Necessary Documentation and Compliance Requirements
Obtaining a medical cannabis dispensary license in Ohio requires a comprehensive set of documents to ensure compliance with state regulations. Applicants must be prepared to submit detailed information to demonstrate their eligibility and operational readiness.
Financial requirements for a Dispensary in Ohio
- Application fee: $5,000
- License fee: $80,000
- Annual renewal: $80,000
- Dispensary certificate of operation fee $70,000
- Biennial renewal for a dispensary license fee $70,000
- Biennial renewal for a dispensary associated key employee card fee $500
- Biennial renewal for a dispensary key employee card fee $250
- Biennial renewal for a dispensary support employee card fee $100
- Reissued dispensary certificate of operation or employee identification card fee $50
- Change in ownership fee $5,000
- Relocation fee $5,000
- Major modification or renovation fee $5,000
Tax and Revenue Allocation for Dispensaries
- Expungements: $15 million in marijuana tax revenue will be dedicated to facilitating automatic expungements for specific cannabis convictions.
- Law Enforcement:
- Department of Public Safety training – 16%
- Attorney General’s Office training fund – 14%
- Drug law enforcement fund – 5%
- Public Health:
- Poison control fund – 2%
- Substance misuse treatment – 9%
- Suicide hotline services – 9%
- Other:
- Jail construction and renovation – 28%
- Safe driver training – 5%
Tax and Revenue Allocation for Cultivators
- A significant portion of the cultivator tax (72%) would be directed towards improving security and infrastructure.
- Jail construction and renovation – 36%
- Supporting county sheriffs – 36%
- Funding law enforcement training – 23%
- Providing assistance to victims of crime – 5%
Conclusion
Opening a dispensary in Ohio is a multifaceted process that requires careful planning, adherence to strict regulations, and a significant financial investment. To successfully establish a dispensary, prospective business owners must navigate the steps that I made for you to learn how to open a dispensary in Ohio and be successful.
Remember: the cannabis industry is heavily regulated and getting help from industry, and business experts is recommendable.
Frequently Asked Questions
How much does it cost to start a dispensary in Ohio?
Opening a dispensary in Ohio can be costly, with an application fee of $5,000, a licensure fee of $80,000, and a renewal fee of $80,000. Real estate and operational costs may also incur additional costs ranging from hundreds of thousands to millions of dollars.
What qualifications do you need to work at a dispensary in Ohio?
You must be a minimum of 21 years old and possess a valid Ohio Medical Marijuana Card. You should also have some level of expertise in the cannabis industry and experience with customer service.
How much do dispensary owners make in Ohio?
Dispensary owners in Ohio can earn anywhere from $250,000 to $500,000 per year with many owners taking home a salary equal to 10% of their dispensary revenue. Employees in the cannabis industry also benefit from competitive wages.
What types of cannabis licenses are available in Ohio?
There are four types of cannabis business licenses available: medical marijuana dispensary, cultivator, processor, and testing laboratory.
What is the application fee for a medical marijuana dispensary license in Ohio?
The application fee for a medical marijuana dispensary license in Ohio is $5,000.
Additional Resources & Websites that’ll help you open a dispensary in Ohio
- License Application Educational Courses by Thomas Howard
- Ohio Marijuana Legalization Initiative
- State of Ohio Board of Pharmacy
- Medical Marijuana Control Program
- Ohio Issue 2, Marijuana Legalization Initiative (2023)
- List of Ohio Medical Marijuana Dispensaries with Certificates of Operation
About the Author
Tom Howard, Cannabis Industry Lawyer and Consultant has practiced commercial law since 2008 when he graduated law school and got his Series 7 & 66 Securities licenses. He pivoted to practicing litigation for financial institutions before helping cannabis teams form, capitalized and get licensed. He has concentrated in cannabis business since Illinois legalized in 2019. He won licenses for clients in Illinois, Connecticut, New Jersey, New Mexico, Massachusetts, Missouri and has gotten into lotteries in Ohio, Maryland and Maine. He became a Certified Ganjier in 2021. He chairs the ISBA’s section council for Cannabis Law in 2023.
