Ohio faces unusual political challenges as it considers legalizing adult-use cannabis, passing decriminalization, and a growing underground market that competes with the state’s nascent medical cannabis market.
As the state prepared Thursday to accept applications for 73 more dispensary licenses – on top of 57 existing ones – Grown In conducted a webinar, “The State of Ohio’s Cannabis Market”. Panelists included Bill Williams, CEO of Beneleaves, an independent, Black-owned processor outside Columbus, and Tim Johnson, a security consultant, and an early advocate for legalizing medical cannabis who lobbied for its passage.
According to Johnson, licensing rules have changed from evaluating scores to a pass-fail process where applicants then advance to a lottery, divided up by the district across the state. Ohio will have 130 stores with the additional licenses.
Many larger multi-state operators (MSOs) decided not to take part in this round of licensing, conjectured Johnson, and may be taking a wait and see approach in hopes of purchasing a license from a provisional license winner.
“It’s kind of an open door when you’re doing a lottery system,” he added.
There’s no defined date in the regulations as to when the winning results will be released.
“Let’s get them awarded and give everybody the opportunity to build out and let’s get them open as quick as possible,” Williams said. “The patients are driving farther than you think to get to their medicine.”
Both panelists believe recently proposed legislation from Ohio Senate Republicans’, SB261, would significantly increase the number of people eligible for a medical card.
“By allowing doctors to participate they get more involved in the industry other than just sending an email recommendation. Now they can consult with their patient,” said Johnson.
Sales activity in Ohio’s medical industry could become a $1.5 to $1.6 billion medical market in the next two years, said Williams. Johnson quickly agreed.
“Ohio is definitely a state with a large consumption of cannabis products whether it’s with the cannabis programs we have now or the illicit market,” Johnson said.
Panelists also addressed the use of environmentally friendly packaging.
“Because of the regulations, packaging is an issue in that it’s kind of wasteful,” Williams said. “We have to jump through a lot of hoops to make sure it’s child safe. We do use glass. We should use a lot more. We’re researching it as we speak. The trend is that we’re all trying to get something that will get approved. We’re desperately working to get the patient of Ohio a better selection. If anybody’s got options out there, please let us know about it.
The Underground Market
The underground market in Ohio is still significant according to Williams.
“It’s still the majority of the business quite frankly, 60 to 70 percent of the fall cannabis business,” he said. “We haven’t made a dent in the underground market yet and it’s a shame. Our growers are making fantastic products and we’re making good products. It’s triple tested and you know exactly what you’re getting every single time. It’s worth it to walk into a dispensary and know what you’re getting and exactly what you’re ingesting.”