How to Get a Cannabis License in Ohio

The first step is to research the cannabis license you’re interested in and prepare for the application accordingly. Find out the specific details, application costs, compliance laws, and other paperwork, like proof of residence, and start to prepare all the documents well before time.

Another important aspect is to conduct a market survey to understand what works in Ohio’s cannabis industry.

Cannabis Market Landscape in Ohio

According to an analysis by the cannabis industry market intelligence organization, BDSA, Ohio’s newly legal medical cannabis market is projected to reach $520 million in 2023.

BDSA projects that by 2025, this market will grow to an estimated amount of $820 million, with a further growth up to $1.65 Billion in 2027.

When you apply to the Board of Pharmacy, you may be required to provide facility designs, specifications, and other business plans. 

Having a business plan on hand offers you a better understanding of everything that will need to happen after your license is issued. 

The Ohio Board of Pharmacy has divided the state into 31 dispensary districts in September 2021, allowing it to map the locations of its 56 licensed dispensaries.

Your business plan should include a basic overview of how the company will operate, such as:

• Details regarding the intended location
• Plans for the physical storefront, including security and surveillance information
• A financial summary, including a suggested budget and how you expect to finance the firm.
• Applicants must have at least liquid assets of $250,000 to cover all costs and expenses of the first year.
• Plans to ensure regulatory compliance
• Inventory information, including prospective sources for medical cannabis products

Provide a checklist of the required documentation specific to Ohio, including but not limited to 

• Complete application and proof of fee payment
• Documentation proving compliance with Ohio tax laws and in any jurisdiction where the applicant has operated in the last three years.
• A financial plan, including financial statements, evidence of committed funds from owners or board members, and proof of sufficient funds (at least $250,000).
• Your business’ organizational structure.
• Background checks for each owner, officer, or board member.
• Documentation of the dispensary’s size and capacity to meet patient and caregiver needs, including building and construction plans.
• Plans for the care, quality, and safekeeping of medical marijuana.
• A proposal showing how the dispensary will meet patient and caregiver needs.
• Description of services or products offered.
• Documentation of any programs to assist veterans or the indigent in obtaining medical marijuana.
• A criminal records check report to demonstrate no disqualifying offenses or that such offenses occurred over five years prior to the application.
• Assurance that the applicant has no investment or ownership interests in a licensed marijuana laboratory or an applicant for laboratory testing licensure.
• Confirmation that the applicant does not share corporate officers or employees with a licensed marijuana laboratory or laboratory testing license applicant.
• Certification that the dispensary location is not within 500 feet of a school, church, public library, public playground, or public park.

Once you’ve gathered all the documents, you must submit your application. It goes without saying that you must ensure it’s complete, accurate, and compliant with state laws.

It’s best to review your application before submitting it or have it reviewed by independent attorneys and insurers for your peace of mind.

The winning applications are chosen by a “drawing” procedure in which each district’s submissions are sorted randomly.

This technique would limit the number of dispensaries in the state to 130, but may now need to increase it. The new distribution method aims to have roughly 1,200 registered patients in each dispensary area in the state. Per capita, Ohio would have more dispensaries than neighboring Pennsylvania.

Only the chosen applications will be evaluated to ensure they match the state’s criteria. If they succeed, they will be granted temporary dispensary licenses and will be able to begin building the facility.

Payment and Fees

Once your application is selected, licensing will cost as follows:

The annual cost for the testing lab is $20,000 for the dispensary, and a biannual fee of $80,000 is charged. 

Meanwhile, a processor license is charged a biannual fee of $90,000. Medical marijuana cultivators (Level 1) will pay a $180,000 biannual fee, and Level 2 will have to pay an $18,000 biannual fee.

Annual renewal fees are in addition to the application and license fees. The Ohio Board of Pharmacy also requires licensees to maintain escrow accounts with minimum levels to gain and retain licensing.

The bill to legalize recreational marijuana was approved on 7th November 2023; the timeline for recreational cannabis license in Ohio is as follows:

• The measure becomes effective 30 days after it is passed.
• All cannabis business applications will be accessible within six months from the passing date.
• Licenses will be granted to existing medical businesses within nine months from the date the law takes effect.

Compliance inspection typically follows within 90 days after the application is approved or selected. So, it’s best to start preparing for it beforehand. For more information, you can read the 2023 Ohio cannabis legalization summary.

Here’s how you can ensure compliance:

Understanding Regulatory Bodies: 

In Ohio, the Medical Marijuana Control Program (MMCP) is overseen by the Division of Marijuana Control (DMC) within the Department of Commerce, and the Division of Cannabis Control (DCC) regulates adult-use cannabis. 

Compliance involves regular interaction with these entities, so ensure that your team closely works along the local Marijuana control laws and co-operates with them whenever there’s an inspection due.

Adapting to Regulatory Changes: 

Businesses must stay informed about changes to laws and regulations, such as transitioning responsibilities from the Board of Pharmacy (BOP) and Commerce to DMC for medical marijuana​​.

Common Compliance Requirements in Ohio

Some basic compliance requirements throughout the United States are:

• Record-Keeping: Businesses should always maintain accurate records of all transactions, inventories, and activities. This includes patient and caregiver registrations and details of all product movements.
• Security Measures: You must implement robust security protocols to prevent unauthorized access to cannabis products and facilities. This also involves informing the regulatory authority about any security system installment or any breaches that have led to vandalism or theft.
• Product Testing and Labeling: Ensure all products meet Ohio’s standards for safety and quality, with appropriate testing and accurate labeling that complies with DMC and DCC regulations​​​​.
• Adherence to Licensing Conditions: Respect the conditions of your license, such as limits on the quantity and type of product that can be sold or cultivated and complying with zoning regulations.

Establish Robust Compliance Protocols

Businesses can ensure they are compliant by taking measures such as 

• Compliance Team: Establish a dedicated compliance team to oversee all regulatory aspects and ensure adherence to state laws and guidelines. If you don’t have enough financial support, consider getting an attorney or credible insurance company to inform you about the latest changes in the regulations.
• Regular Training and Updates: Regularly update and train staff on compliance protocols and state regulations, ensuring everyone is informed about their responsibilities and the latest regulatory changes.
• Audit and Review: Conduct monthly or periodic internal audits to ensure ongoing compliance and address any issues proactively. You may also consider getting external audits to understand your company’s compliance record better.

Stay Ahead With Insurance

Maintaining communication with the DMC to stay updated on any regulation changes or updates isn’t everything. Insurance plays a crucial role in ensuring compliance for businesses operating in the cannabis industry in Ohio, as insurers can help you navigate the regulatory landscape better. 

Key points include:

1. Risk Mitigation: Insurance policies help mitigate various risks, including property damage, product liability, and employee-related risks, which are inherent in the cannabis industry.
2. Regulatory Compliance: Ohio may require certain types of insurance as part of the licensing requirements for cannabis businesses. This can include general liability, product liability, and workers’ compensation insurance.
3. Financial Security: Insurance provides financial security against unforeseen events, ensuring a business can recover and continue operations without major losses.
4. Investor and Stakeholder Confidence: Having appropriate insurance can increase confidence among investors and stakeholders, demonstrating a commitment to responsible and sustainable business practices.
5. Legal Protection: Insurance can offer protection in legal disputes, covering legal fees and settlements that could otherwise be financially debilitating for a business.

By rigorously adhering to these protocols, staying informed about regulatory updates, and getting adequate insurance coverage, businesses can ensure compliance with Ohio’s medical and recreational cannabis regulations, thus maintaining their licenses and avoiding potential legal complications.