Ohio’s Medical Marijuana Market – Where Is It Now?

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It’s been a bumpy start to Ohio’s medical marijuana program, but those days seem so long ago. With the early restrictions now being relaxed, the market seems more lucrative than ever, but there is still some regulatory complexity.

Borders are gone!

Initially, the Ohio market was plagued by a shortage of supply, resulting in high prices and angry patients. The number of companies to be certified was limited.

In addition, the breeders in particular had to struggle with size restrictions as part of a two-stage cultivation permit process. A Level II license has a grow area limit of 3,000 square feet, while a Level I license has a limit of 25,000 square feet. This inequality led several Level II cultivators to seek permission to expand because they were struggling to meet increasing demand.

The regulators, which had never officially drawn up requests for enlargement, simply followed the requests. The cultivators filed a lawsuit and eventually went to the Supreme Court. The court ruled in favor of the farmers and instructed the supervisory authorities to examine the enlargement requests.

Without this judgment, expansion may still be off the table. But while it’s a welcome win for the market, adding additional tiers can be the real solution.

In addition to cultivation limits, there were pharmacy limits. Initially, regulators planned to license a maximum of 60 pharmacies, with a single company allowed to own up to five fully certified pharmacies.

After an explosion in patient numbers, regulators decided to more than double the cap on the total number of pharmacies to 130. Hoping to meet the needs of all patients across the state, regulators remain optimistic about avoiding the spectrum of lawsuits and other logistical setbacks that may arise while on a new application deadline.

The attraction of limit values ​​and regulatory requirements

Despite the early market’s difficulty in meeting demand, these very limits may have attracted businesses. Since there are rules that limit when and how ownership of a certified pharmacy can be transferred, getting started early is important.

By 2021, the state’s pharmacy market will already be dominated by half a dozen companies exhausting their licenses. For some, it will later be helpful to acquire almost 10% of the licensed pharmacies at the beginning.

In addition, Ohio regulators strive to ensure that the “right” companies have ownership obligations. The fervor of licensing and management agreements that make it easier for companies to get their brands available across the country has complicated things for some.

Factors such as profit sharing and the day-to-day running of the business are also assessed by regulators in determining the true owner or the fact that there has been a change of ownership.

Therefore, companies should consider not only the timing of a transfer, but also the true nature of the business being conducted when attempting to enter this market through licenses. So, while some companies try to avoid the harsh realities of the Ohio market, they can still ultimately answer to regulators.

Is the recreational use imminent?

In the area, marijuana is either approved for recreational use or soon will be. The Michigan market is in full swing and generating record revenues. New York will also begin its leisure market, which is also expected to generate tens of millions at the beginning. Pennsylvania, while apparently in its infancy, appears to have legislation more familiar with the recreational market.

Ohio, despite an active medical market, is still fiddling with the prospect of legalizing a recreational market. Failed votes and political opposition have hampered legalization efforts. However, many hope that the state will soon be able to join the ranks of its neighbors.

The Ohio Attorney General recently approved the language in a coalition-proposed bill to regulate marijuana like alcohol. However, this is the first hurdle of many as the coalition must now collect 133,000 signatures to force lawmakers to look again.

If all of this sounds familiar, it’s because it is. Efforts to legalize recreational marijuana have come close, but failed shortly before the finish line, for example when voters turned down a measure a few years ago.

diploma

Ohio has certainly turned out to be a more interesting market than one would expect. Lessons can be drawn from its rules and the litigation and controversy that have generated them. A tight leisure market could certainly attract bigger players from Michigan and New York, but much of that will depend on the political will and appetite of voters over the next few years.