Ohio Division of Cannabis Control Proposes Deadline and Other Rules for Adult Use Dispensary Licenses

The newly established Ohio Division of Cannabis Control (DCC) has proposed rules on adult use marijuana for operators. Stakeholders and interested parties are encouraged to submit comments to the DCC by February 9, 2024.

Overall, we see some clear winners and losers resulting from the proposed regulations. Current medical marijuana dispensary license holders have the opportunity to sell adult use marijuana using the dual license with no application fee. Another beneficiary of the proposed rules are the processors, whose licensing fees will be cut in half will benefit from the regulations. On the other side, current Level I and Level II cultivation facilities will have an unclear path to where their future dispensary can operate. If applicants get a low ranking from the lottery in phase one of the application process, they might not be able to use the real estate readily available to them. Also, in this scenario, the potential social equity applicants, who will have to wait for a future application date, will also fail to benefit from proposed regulations.

There are many what-ifs surrounding these applications. I believe parts of the proposed rules will be disputed by industry leaders during the comment period. Patient count as reported by the DCCfor November and December showed for the first time in that program’s history a decline in referrals, meaning fewer people are receiving and retaining their registration cards in anticipation of adult use. Given that data, I believe the DCC will enforce September 7 deadline for applying for provisional licenses.¹

Here are some additional key takeaways:

• Current licensed medical marijuana dispensaries can apply for dual licensure with applications due by June 7, 2024. The DCC will begin granting provisional licenses on September 7, 2024. As of now, there is no application fee, nor is there a draft of an application. The DCC has made mention of the basic parameters for the application, but nothing too specific or extraordinary.
• Level I cultivators can apply for up to three dispensaries and Level II cultivators can apply for one dispensary, both due by the June 7 deadline. A fee of $5,000 must accompany each application.
• There are two phases to the application process, phase one involving a lottery drawing for dispensary site selections and ranking applicants at random. For more information on the process, contact me at HBK Cannabis Solutions, by phone at (330) 758-8613, or by email at egrischow@hbkcpa.com
• The DCC will address rules for Social Equity license applications at a later date.The DCC is authorized to roll out additional application periods 24 months after the first Adult Use operator license is granted.
• Annual processor license fees will be decreased from $100,000 to $50,000.
• Medical Marijuana patient registration fees will be waived.

To read more about the proposed rules you can visit the Ohio Division of Cannabis Control (DCC) website and read the Proposed Rules – Early Stakeholder Outreach.

^1-Note: This section is strictly the opinions of Eric T. Grischow and do not necessarily reflect the opinions of the Cannabis Solutions group, nor HBK.