This Thursday is the application deadline for 73 new medical cannabis dispensary licenses in Ohio, an opportunity for new operators to get a foothold in the state, as well as a chance for existing cannabis companies to expand their holdings to state caps. But bigger companies already have a head start in Ohio, as multi-state operators own over 53% of Ohio’s 57 existing medical dispensary licenses, with five multistate operators reaching the state’s five dispensary license cap threshold.
Five multi-state operators – Acreage Holdings, Verano Holdings, Green Thumb Industries, Columbia Care, and Cresco Labs – have reached that dispensary cap in Ohio. Those companies and four others – Ascend Wellness Holdings, Curaleaf, Jushi, and PharmaCann – reached the cultivation facility limit of one in Ohio.
Multi-state operators own a quarter of all cultivation facilities in Ohio. Level 1 cultivators can operate an area of up to 25,000 square feet and level 2 cultivators can manage 3,000 square feet, according to the Ohio Medical Marijuana Control Program.
Herb Washington, majority owner of medical dispensary Quest Wellness Ohio, is concerned about the role MSOs are playing in the state.
“When legislators and the people of Ohio think about marijuana and the ownership, they envisioned that Ohioan ownerships would be a large part of that,” he said. “Ohio wanted to build a gold standard for how things were to be done. And I think in this particular case, there is still work that needs to be done. I understand there have been 44 total licenses to change hands since the first license was awarded. Forty-two have gone to MSOs.”
Acreage Holdings has five dispensaries in Ohio: five Greenleaf Apothecaries in Wickliffe, Akron, Columbus, Canton, and Cleveland. Acreage Holdings co-owns level 1 cultivator license holder Terradiol Ohio in Canton.
Cultivation site and dispensary names are determined in operating agreements and may be different from the site or store name listed in a state license application. These names reflect that on government documents.
“Our mission is to champion and provide access to cannabis’ beneficial properties by creating the highest quality medical and adult-use products and consumer experiences,” Acreage wrote in an SEC Form 10-K. “Our operational strategy to deliver on our vision and mission revolves around four primary areas of focus: (1) cultivation; (2) retail; (3) processing/manufacturing and (4) wholesale. While we focus on these four areas, we have determined that we have just one reportable business segment: the production and sale of cannabis products.”
In October, Acreage announced Robert Daino, chief operating officer, is set to step down in March 2022. He owns a cultivator license in Ohio with Pamela Daino and others.
Verano owns five medical dispensaries under multiple names: Glass City Alternatives in Bowling Green; GreenRx in Cincinnati; Mad River Remedies in Riverside; Mother Knows Best in Canton; and Ohio Grown Therapies in Newark. It also owns a level 2 cultivation facility in Canton.
“The Company is an early-stage growth company and acquisitions of cannabis businesses and related licenses and assets is an important part of the Company’s growth strategy. In 2021, the Company and its subsidiaries entered into a number of strategic transactions, thereby expanding its footprint across the United States,” Verano wrote in a SEC document.
Green Thumb Industries also owns five dispensaries and one cultivation facility in Ohio. The cultivation facility’s owners are a trade secret, according to the company’s heavily-redacted cultivation application.
“All of the medical-only markets that the [Green Thumb Industries] does business in (Connecticut, Florida, Maryland, New Jersey until February 22, 2021, New York, Ohio and Pennsylvania) have written regulations that impose our limitations on the number of cannabis business licenses that can be awarded. In each of these markets, we have a proven track record of: (i) entering the market through state-granted awards based on the merit of its application and business plans; and/or (ii) expanding market reach through accretive mergers, acquisitions, and partnership ventures,” Green Thumb Industries wrote in a SEC Form 10-K.
Fifty medical dispensary owners, or 42% of the total, listed their mailing address as Ohio. Forty, or 33%, listed Illinois. Massachusetts had a dozen owners, and New York and Florida trailed behind but also had a presence in the state.
Unlike in Connecticut, where the coming adult use market will award 50% of licenses in each category to social equity applicants, in Ohio, there is no social equity program. This Thursday, applications are due for 73 new dispensary licenses in Ohio.
“Those who have money can afford to put more balls in. They are going to have more real estate. An MSO with a pocketful of money can tie up 20 properties. The average minority might only be able to tie up two properties and only have two balls in the lottery,”said Washington, who is Black. “It makes it very difficult. The state doesn’t really recognize social equity. There is nothing this time around that helps to level the playing field.”
Washington is concerned that the lottery, without a social equity component, might leave out minorities.
“If you look at Columbus, Cincinnati, and Cleveland – the three C’s of Ohio – and look at their population base, they’re close to at least 50% or more minority or Black. But yet, when you look at something like this, we are at the bottom,” Washington said. “It just makes you ask yourself, why is that? Why are we still having to answer these kinds of questions in 2021?”
Update: Due to a state data error, a previous version of this article used the wrong license name for a cultivation site owned by Verano Holdings.