How to Get a Cannabis License in Nevada

By Eric Schneider, a seasoned cannabis industry expert. He’s a sought-after speaker at industry seminars and a regular writer for respected cannabis journals such as the American Bar Association.

The change in Ohio’s legal landscape has created huge opportunities for entrepreneurs and the marijuana business community, but the process of getting a cannabis license is still complicated. 

Here’s a straightforward and comprehensive guide on how to get a cannabis license in Ohio. 

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Historical Context

Ohio was one of the first US states to decriminalize cannabis. In 2019, Ohio State announced that it would be giving licenses for medical marijuana dispensaries under the Medical Marijuana Control Programme.

Earlier in November 2023, the majority of Ohio voters approved the legalization of cannabis for adult-use, creating the need for a new system for licensing, taxation, and regulation of adult-use marijuana businesses.

Three state government agencies oversee the implementation of the Medical Marijuana Control Programme (MMCP) in Ohio marijuana dispensaries:

Patients who want to use marijuana for therapeutic purposes must be at least 18 years old, a resident of Ohio, and have a qualifying ailment for Ohio medical marijuana card, such as AIDS/HIV, Alzheimer’s disease, epilepsy, or cancer. Huntington’s disease, terminal illness, and spasticity were added to the list on June 9th, 2021.

Since the program’s inception in 2019, Ohio has registered 377,384 patients for medicinal marijuana as of June 30, 2023. There are 22,342 veterans, 23,405 indigents, and 1,346 patients with a terminal diagnosis.

Apart from that, Ohio became the 24th state to legalize adult-use cannabis on November 7, 2023, when 57% of voters approved Issue 2, also known as An Act to Control and Regulate Adult Use Cannabis.

Types of Cannabis Licenses in Ohio

In Ohio, four types of cannabis company licenses are issued: 

As of July 31, 2023, there were 23 level I cultivation licenses, 14 level II cultivator licenses, 92 medical cannabis dispensary licenses with Certificates of Operation, 41 current provisional medical marijuana dispensary licenses, 46 provisional processor licenses, and 10 provisional testing licenses. 

With a medical cannabis dispensary license, retailers may get medicinal marijuana from processors and dispense or sell medical marijuana to patients.

Note: The process for legalizing recreational marijuana is ongoing, and it will take some time until we reach any conclusions. Keep visiting Ohio’s Governmental website to stay updated.

How to Obtain a Cannabis License in Ohio

Here’s a step-by-step guide to navigating through the Ohio dispensary license or medical marijuana processors license application:

Research and Preparation

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.

Develop a Solid Business Plan

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

Assemble the Necessary Documentation

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.

Submitting the Application

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.

Application Review and Compliance Inspection

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.

Types of Cannabis Licenses in Ohio

There are two types of cultivator’s licenses. Level I (up to 25,000 sq ft cultivation area) and Level II (up to 3,000 sq ft cultivation area).

1. Cultivation Licenses

There are two types of cultivator’s licenses. Level I (up to 25,000 sq ft cultivation area) and Level II (up to 3,000 sq ft cultivation area).

Note: Cultivators must not hold or invest in cannabis laboratory testing licenses.

Requirements:

  • Applicants must be at least 21 years old.
  • Consent to criminal background checks.
  • Non-refundable application fee ($20,000 for Level I; $2,000 for Level II).
  • Documentation of sufficient funds ($500,000 for Level I; $50,000 for Level II).
  • All other documents mentioned above.

Costs:

  • Certificate of operation fee ($180,000 for Level I; $18,000 for Level II).
  • Annual renewal fees ($200,000 for Level I; $20,000 for Level II).
  • Additional fees for plant-only processor licenses.

2. Processor Licenses

These businesses are allowed to obtain medical cannabis from licensed cultivators, process it into a dispensable form, and deliver or sell it to licensed retail dispensaries.

Three types of processing facilities licenses are available in Ohio: standalone, plant-only, and vertically integrated processors.

The requirements and costs are similar to those for cultivator’s licenses. You can check the updated costs on the State’s official website.

3. Dispensary Licenses

Those with dispensary licenses can obtain medical cannabis from licensed processors and dispense or sell it to qualified patients.

Requirements:

  • All documents mentioned above.

Note that the application selection process involves a lottery system, so ensure your documentation is complete to qualify for the lottery system.

Costs:

4. Laboratory Testing Licenses

Once you get the laboratory testing license, your business can test the products and raw materials from cultivators and processors before they’re sold to dispensaries.

Requirements:

  • Mandatory testing of medical marijuana and infused products before sale.
  • ISO/IEC 17025 accreditation for testing facilities.
  • Compliance with various testing standards and procedures.
  • All documents mentioned above.

Costs:

  • Application fee: $2,000.
  • Certificate of operation fee: $18,000.
  • Annual renewal fee: $20,000.
  • Employee ID cards: $100 every two years.

Risk and Compliance Factors From AlphaRoot

The cannabis industry, while burgeoning with opportunities, is not without its complexities and inherent risks. Understanding and mitigating these risks is crucial for long-term success. AlphaRoot, a prominent insurance and risk management firm specializing conduct business in the cannabis sector, sheds light on the key risk and compliance factors

1. Regulatory and Legal Risks

Labyrinthine Regulations: The cannabis industry is highly regulated, and compliance with state and local laws is paramount for cannabis establishments. Navigating the intricate web of regulations, which can vary significantly from one jurisdiction to another, poses a substantial challenge for cannabis establishments. Failure to comply can result in fines, license revocation, or legal consequences.

Federal Ambiguity: Cannabis remains illegal at the federal level in the United States, despite state-level legalization of recreational marijuana. This dichotomy creates uncertainties and exposes businesses that sell recreational marijuana here to potential federal enforcement actions.

2. Financial Risks

Cash-Intensive Operations: Due to federal banking restrictions, many cannabis businesses operate primarily in cash. This not only presents security risks but also complicates financial management and taxation.

Taxation Challenges: Cannabis businesses face unique tax challenges, including limitations on deductions and potential audits. Understanding and complying with tax regulations is essential to avoid financial penalties.

3. Security Risks

Theft and Robbery: Cannabis businesses are susceptible to theft and robbery due to the high value of their products. Implementing robust security measures at a marijuana cultivation facility, including surveillance systems and secure storage, is vital to mitigate these risks.

Cybersecurity: As with any industry, cannabis businesses are vulnerable to cyberattacks. Protecting sensitive customer data and business information is critical.

4. Product Liability and Quality Control

Product Liability Claims: Ensuring the safety and quality of cannabis products is crucial to prevent product liability claims. Contaminated or mislabeled products can lead to legal and financial repercussions.

Testing and Quality Assurance: Collaborating with reputable independent testing laboratory and facilities, as required by regulations, is essential to verify the safety and potency of cannabis products. Consistent quality control is essential to maintain consumer trust.

5. Market Competition and Volatility

Saturated Markets in regions with a high concentration of cannabis businesses, competition can be fierce. Navigating market saturation requires effective differentiation and marketing strategies.

Price Volatility: The price of cannabis products can fluctuate significantly, impacting profitability. Businesses must adapt to market dynamics and price changes.

6. Environmental and Sustainability Concerns

Resource Intensity: Cannabis cultivation and processing can be resource-intensive, including water and energy consumption. Businesses need to address sustainability concerns and adhere to environmental regulations.

Waste Management: Proper waste disposal and recycling practices are essential to minimize environmental impact and meet regulatory requirements.

7. Talent and Workforce Challenges

Talent Shortages: The cannabis industry often faces challenges in recruiting and retaining qualified personnel due to its specialized nature. Employee turnover can disrupt operations.

Training and Compliance: Businesses must invest to ensure employees are well-informed about compliance and safety protocols.

Expert Insights

Isaac Bock, a well-known figure in the cannabis sector, emphasizes that success in Ohio’s cannabis industry hinges on keeping cannabis establishment of regulations, maintaining ongoing community involvement, and upholding the highest standards of product quality.

FAQ Section

1. How Do I Renew My Ohio Cannabis Establishment License?

You can simply visit the Board of Pharmacy’s website, which oversees the licensing for medical cannabis businesses, to know about the renewal application process. You have to pay the necessary application fee for your license type. The board will review your application and renew your license if you’re compliant with Ohio laws.

2. What Are the Tax Rates for Cannabis in Ohio?

Medical marijuana is subject to a state sales tax of 5.75% by the Ohio Department of Taxation, and local authorities, such as municipalities, can impose additional cannabis sales taxes ranging from 0.25% to 2.25%.

Cultivators and processors may also need to pay tax based on the market value of the cannabis plant cultivated on a property.

3. What Are the Advertising Guidelines for Cannabis in Ohio?

Any ads that are likely to reach persons under 18 are banned. Cannabis ads should not suggest non-medical or recreational marijuana use or imply the legality or health benefits of such use.

All advertisements must be submitted to the Ohio Department of Commerce or the Ohio State Board of Pharmacy with applicable fees beforehand. They must not be misleading, include certain images or statements, or suggest non-qualifying conditions for use.

There are also specific prohibitions on where ads can be placed (e.g., within 500 feet of prohibited facilities, on billboards, public transit, etc.).

4. How Can I Work in the Cannabis Industry in Ohio?

You can reach out to the dispensary, processor, or testing laboratory business you want to work for and get familiar with the exact job requirements. Generally, it’s important to have specific know-how of the cannabis industry, support academic qualifications, be of legal age, and have no criminal record if you’re looking to work in the Ohio cannabis industry.

Additional Resources

Visit the official websites of regulatory authorities and learn of the ever-evolving marijuana landscape in Ohio.

Conclusion

In terms of business and revenue, starting a cannabis dispensary in Ohio is a lucrative idea, given that you have the correct drive and access to the essential resources. However, it is crucial to realize that this procedure takes time, even when you have the resources.

The industry is still a growing one and is still adapting to changes. While the business has great potential and has the ability to generate huge numbers in terms of tax revenue for states, the decision to legalize marijuana in the US, on a national level, will still require more time and effort. 

Remember that the cannabis sector is extremely regulated and hard to get into. Be sure to watch for announcements regarding new marijuana licenses, have all required documents ready, and have adequate finances and a comprehensive business plan to increase your chances of getting that license.

If you need professional cannabis help, reach out today at Alpharoot for a consultation.