How to Open a Dispensary in Ohio

The cannabis industry is constantly reinventing itself. As new markets emerge throughout the nation, public opinion on cannabis is slowly changing. With these evolutions, traditionally conservative parts of the country, such as Ohio, are beginning to embrace cannabis.

As of August 2021, Ohio shows great promise for those entrepreneurs interested in opening cannabis dispensaries. Not only does Ohio have a functional and expanding medical cannabis market, but politicians recently introduced legislation to legalize adult-use cannabis. 

While talk of an adult-use market is doubtlessly exciting, all eyes are currently on the Ohio medical cannabis space. To this end, the state is in the process of doubling the number of its medical marijuana dispensaries. While it will be challenging to get a license for a new dispensary, a new "lottery system" for the application process might give “underdogs” a higher chance to win.

Read on to learn how to open a cannabis dispensary in Ohio.

The Ohio Statehouse in Columbus

Ohio Cannabis Industry Overview

Like neighboring Pennsylvania, the Ohio industry came online with a strict focus on medical cannabis. The people of Ohio voted to legalize medical marijuana in 2016, but the first dispensaries didn't open until 2019. Within this timeframe, the cannabis dispensary application process took place during 2018. 

At the industry's inception, dispensary license totals were carefully correlated with estimated patient counts within Ohio. These patient counts, in turn, have been dictated strongly by what Ohio deems "qualifying conditions" for medical marijuana.

Qualifying Conditions in Ohio

In 2018, Ohio approved 22 qualifying conditions for medical cannabis. These conditions include severe disorders like AIDS, cancer, Parkinson's disease, multiple sclerosis, and hepatitis C. The state voted to add "Huntington's disease, terminal illness, and spasticity" in 2021, bringing the total to 25 qualifying conditions.

Patient Counts

Patient counts in the Ohio medical marijuana industry have continued to grow. When the industry first launched in 2019, there were about 93,000 medical cannabis cards issued. Today, the Buckeye State has about 120,000 registered medical marijuana patients.

Operational Dispensaries in Ohio

Ohio awarded 57 cannabis dispensary licenses in 2018. Certain companies like Green Thumb Industries (GTI) and Verdant Creations received multiple dispensary licenses within this total. Today, five of these licenses remain unused, although reasons for this remain unclear.

The Ohio Medical Marijuana Control Program

The Ohio Medical Marijuana Control Program oversees all activity in the Ohio cannabis industry. This program was designed and is currently governed by the Ohio Board of Pharmacy. These entities work in conjunction with one another to manage all cannabis dispensary licensing procedures in Ohio.

Dispensary License Opportunities in Ohio

As the Ohio medical cannabis industry approaches its 4th year, some attractive new opportunities are on the horizon. 

In April 2019, the Ohio Board of Pharmacy voted to add 73 medical cannabis dispensaries. With these new licenses, Ohio will have a total of 130 dispensaries throughout the state. 

The Ohio Board of Pharmacy increased dispensary totals due to lopsided patient counts in certain regions. According to the News 5 Cleveland website, the new measures seek to ensure there are "about 1,200 registered patients per dispensary in each dispensary district of the state." In essence, they seek to give patients better access to cannabis while also leveling business opportunities in the state

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2021 Application Window

While there is much anticipation for new medical dispensary licenses in Ohio, we are still waiting on the exact details for the application window. Initially, the Ohio Medical Marijuana Control Program indicated that the application window would be in summer 2021. 

As we near the end of the summer, it's apparent that the new medical cannabis dispensary application window is delayed. It is difficult to say why things are delayed, but it could very well be due to complications related to the COVID-19 pandemic. If you are interested in applying, Most Consulting recommends you keep a close eye on the Ohio Medical Marijuana Control Program website for updates.

New Legislation for Adult-Use Legalization

In July 2021, lawmakers in Ohio introduced a bill that proposes the legalization of adult-use cannabis in the Buckeye State. While the bill is expected to fail, it offers a glimmer of hope for Ohio's future recreational cannabis market. At this point, we recommend you keep an eye on developments but wait on more clarity before enacting a business plan for an adult-use dispensary in Ohio.

Essential Criteria for Medical Dispensary License Applications in Ohio

When Ohio opens the application window for new medical cannabis dispensary licenses, some essential points are to remember. Most importantly, the application process will be a blend between the traditional point system and a new lottery system.

Point System

The point system is the traditional method for awarding dispensary licenses. This system helps agencies like the Ohio Board of Pharmacy understand which applicants best meet the criteria for running a compliant and successful cannabis business. 

Whether in Illinois or New Jersey, the point system requirements are relatively similar in most cannabis markets. Critical criteria to consider for the point system in Ohio include: 

  • Ownership Interest
  • Marketing 
  • Compliance
  • Security 
  • Employee Training
  • Location  
  • Technology and Systems

Lottery System

When Ohio conducted its cannabis business license application process in 2018, it did not occur without controversy. As seen in many new cannabis markets, applicants not awarded licenses quickly followed with lawsuits against the state. The Ohio Board of Pharmacy hopes to avoid such controversy by enacting a lottery system with the new round of dispensary licenses. 

With the new process, applications will be scored according to the point system. However, instead of awarding the 73 new licenses to the highest-scoring applicants, Ohio will place the highest scoring applications into a lottery. While we are still unsure how many applications will be entered into the lottery, we know that winners will be picked at random. It's also possible that each district will have its lottery picks commensurate to resident patient counts. 

The Ohio lottery system is likely a good thing for new players in the market. While small operators might not have the resources to outscore large multi-state operators like GTI in the old point system, the addition of the lottery might be enough to get them a chance with new licenses.

Ohio Dispensary Application Support

As a leading cannabis consulting company, MOST is constantly paying attention to industry news and developments. With up-to-date knowledge on such a volatile business, we can give the appropriate guidance in established and emerging markets.

Contact us today for questions about opening a cannabis dispensary.