Ohio Real Estate & Cannabis Regulations

Cannabis Status: Open

Dual-Use Applications Available by June 7, 2024

As of now, Ohio’s cannabis market is exclusively open for medical marijuana sales, reflecting the state’s initial foray into cannabis regulation. However, a significant shift is on the horizon, as Ohioans voted on November 7, 2023, to pass a statutory initiative legalizing the purchase and recreational use of marijuana for adults aged 21 and older. This transformative move, officially known as “An Act to Control and Regulate Adult Use Cannabis,” took effect on December 7, 2023.

While the state currently caters to medical marijuana patients, the impending commencement of adult-use sales signals a dynamic evolution in Ohio’s cannabis landscape. The new legislation will usher in a regulated framework for adult-use cultivation, processing, testing, and dispensary operations, reflecting a broader acceptance and legalization of cannabis for recreational purposes in the state.

Name: Ohio
Population: 11.78 Million
Median Income: 66,990
Cannabis Uses: Cultivator, Processor, Testing Lab
State Cannabis Overview: The state is set to begin accepting applications from existing medical operators for dual-use licenses.

To facilitate the application process, the state has set clear timelines. Application materials for Dual-Use authorized applicants will be published by June 7, 2024, with provisional licenses expected to be issued by September 7th of the same year. The application window for social equity applicants has yet to be announced.

Ohio Cannabis & Commercial Real Estate Research

The legalization of adult-use cannabis in Ohio marks a significant milestone, and the state has crafted a comprehensive licensing framework that prioritizes existing medical marijuana operators while also introducing provisions for social equity. Notably, each current medical marijuana cultivator, processor, and testing laboratory is granted a non-medical cannabis license for cultivation, processing, and testing, respectively, at their current operating location. This seamless transition ensures that established entities can extend their operations to the adult-use market.

Further, existing medical marijuana level I cultivators are granted three additional dispensary licenses, while level II cultivators receive one dispensary license. Current medical marijuana dispensaries are eligible for a non-medical cannabis dispensary license, and those not commonly owned or controlled by cultivators or processors can secure an extra non-medical cannabis dispensary license for new locations through the application process.

Ohio is prohibiting retailers from setting up shop within a 1-mile radius of each other, constituting one of the most extensive buffers in any U.S. recreational market. Given this considerable setback between dispensaries, the state has devised a method to determine the order new adult-use licenses are awarded existing operators through a lottery system . Applicants looking to establish dispensaries must adhere to this regulation and pay a $5,000 application fee during the application process, underscoring the state’s commitment to a controlled and equitable expansion of the adult-use cannabis market.

Additionally, 40 level III cultivator licenses and 50 dispensary licenses will be made available to new applicants with a preference to participants in the state’s Cannabis Social Equity and Jobs Program. This program, slated to be established by the Department of Development, aims to promote inclusivity and economic opportunities in the cannabis industry.

To facilitate the application process, the state has set clear timelines. Application materials for Dual-Use authorized applicants will be published by June 7, 2024, with provisional licenses expected to be issued by September 7th of the same year. The application window for social equity applicants has yet to be announced.

Looking ahead, the legislation mandates a biannual review of the number of cannabis operator licenses by the Division of Cannabis Control after twenty-four months from the first adult-use license issuance. This provision allows for adaptability, with the possibility of additional application periods being authorized based on the evolving needs and dynamics of the cannabis industry in Ohio. The state’s approach reflects a balance between facilitating business growth and addressing social equity concerns, setting a precedent for responsible and inclusive cannabis regulation.

Uses: Retail, Delivery, Cultivation, Distribution, Testing Lab

Distance Requirements:

Retail Dispensaries are required to be at least 1 mile apart.

No adult use cannabis operator or adult use testing laboratory shall be located within five hundred feet of the end boundaries of a parcel of real estate having situated on it a prohibited facility.

“Prohibited facility” means any church, public library, public playground, public park, or school

License Types and Caps:

Cultivation: Cultivation license types are classified into two categories based on the initial size of operations. A level I license permits an operating facility to have up to 25,000 square feet designated for growing space. A level II license permits an operating facility to have up to 3,000 square feet designated for growing space upon initial licensure.

Processors: The Ohio Department of Commerce licenses and regulates processors, which manufacture medical marijuana products. There are three different types of processors – standalone, vertically integrated facilities, and cultivators who file plant-only processor registrations.

Dispensary: The Ohio Department of Commerce licenses and regulates marijuana dispensaries, which obtain marijuana products from licensed processors to dispense and sell

Testing Labs: By sampling from every batch of medical marijuana product before it may be sold to a dispensary, testing laboratories ensure medical marijuana products are free of contaminants that could potentially have negative effects on the health of patients.

Licenses to be given out:

Each current medical marijuana cultivator, processor, and testing laboratory will receive a non-medical cannabis cultivation, processing, and testing license, respectively. Those licenses are for the same location at which they are currently operating.

Additionally, each current medical marijuana level I cultivator will receive three dispensary licenses, while current medical marijuana level II cultivators will receive one dispensary license. Each current medical marijuana dispensary will receive a non-medical cannabis dispensary license, and each medical marijuana dispensary that is not commonly owned or controlled by a cultivator or processor will receive an additional non-medical cannabis dispensary license at new locations selected during the application process.

Finally, 40 level III cultivator licenses and 50 dispensary licenses will be issued to applicants with a preference to participants of the Cannabis Social Equity and Jobs Program, which the statute prescribes to be established by the Department of Development.

Tax Rate: 10% excise tax on non-medical cannabis purchases.

Columbus
Cleveland
Cincinnati
Toledo
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