Ohio Legalizes Adult-Use Cannabis
Welcome to the Cannabis Industry, Ohio!
Elections can always be a stressful time for us as we wait for a state, a county, or a municipality to pass new and progressive legislation on cannabis or elect candidates who support pro-cannabis measures. We were over the moon on November 7th with Ohio’s approval of Issue 2 which legalizes adult-use (recreational) cannabis.
A warm welcome to Ohio for becoming the 24th state to fully legalize cannabis! We may not be at that 25-state mark just yet for adult-use, but Ohio’s legalization did help us reach a significant milestone—now over half of all Americans live in an adult-use market.
So, what happens now? And what did Issue 2 say in detail? Besides the jobs and tax revenue it will create, let’s break down what we can expect from the Buckeye State.
An Overview of Ohio Cannabis Ballot Issue 2
The language on the ballot that went before the 2023 Ohio voters was fairly substantial (though we know there is plenty more to do!). The Ohio Revised Code will enact Chapter 3780 and authorizes the Division of Cannabis Control within the state’s Department of Commerce to “regulate, investigate, and penalize adult-use cannabis operators, adult use testing laboratories, and individuals required to be licensed.” This will legalize and regulate adult-use cannabis possession, commercial cultivation, processing, retail sales, home grow, and use of cannabis for those 21-years of age or older.
This above is the most pertinent information and offers a lot of insight into what the state of cannabis will be like when Ohio’s adult-use program is fully rolled out. We also know the state will have additional protections for individuals who engage in permitted adult-use conduct, the establishment of a social equity and jobs program, and detail local approvals and taxes which may or may not be levied on cannabis and cannabis products.
Social Equity License Applicants Will Once Again Have Priority
Issue 2 details that there will be a social equity and jobs program and that the Department of Development will certify applicants into this program based on social and economic disadvantages. Those who qualify as “social disadvantage” include “membership in a racial or ethnic minority group, disability status, gender, or long-term residence in an area of high unemployment.” Individuals who qualify for the social equity and jobs program will be provided preferential treatment in the licensing process, specifically for cultivator and dispensary licenses.
Timeline For Cannabis Licensure is Shorter Than Most
There are two main dates to pay attention to with this passage:
- December 7, 2023 – This is when the legalization of possession of up to 2.5 ounces of cannabis and home cultivation of up to six cannabis plants (or 12 if two or more of age adults live in the same home) will become effective.
- August 7, 2024 (TBD) – Currently, operating medical cannabis business will have a head start in the new adult-use market as state regulators will need to begin issuing licenses to operate in the adult-use space to medical operations within nine months of the election. So, this August date is a bit of a guess, as it is the farthest out date that the issuance of these licenses could take place for medical operators.
Local Logistics, Taxes, and Cannabis Funds
Under Issue 2, local governments cannot limit specific research, levy taxes, or change an adult operation. They can opt-out of allowing new cannabis operations but cannot block current medical ones if they want to add a co-located adult-use business. A landlord or an employer can prohibit the adult use of cannabis under “certain circumstances” and prohibit the operation of a motor vehicle while using or under the influence of cannabis.
There will also be a 10% tax on the sale of cannabis and cannabis products by dispensaries in addition to usual sales taxes. Cannabis taxes will go towards multiple funds:
- Cannabis social and economic equity fund (36% of the taxes)
- Host community cannabis facilities fund (36%)
- Substance abuse and addiction fund (25%)
- Division of cannabis control and tax commission fund (3%)
How Do I Submit the Best License Application?
Applications are Canna Advisors’ specialty, and this is where Canna can offer a tremendous amount of help to people interested in opening their business in Ohio. There will be a competitive license program “with a preference to applications who are participants under the cannabis social equity and jobs program.” The Division will issue 40 recreational cultivator licenses and 50 retail licenses with additional licenses for the adult-use market two years after the first operator is approved.
Get Started on Your Ohio Cannabis Business with Our Consulting Experts
With Ohio aiming to have the first adult-use licenses issued to medical operators in the next nine months, we do anticipate others will have the opportunity to begin their own license pursuits sooner rather than later. This is the perfect time to begin the early preparations for such and we would be more than happy to assist with all your Ohio needs.
Contact Canna Advisors to start your business planning and financial modeling or book an hourly consultation to get all your questions answered now.