Cleveland — Dispensary shelves are fuller, prices are declining, and sales are increasing one year into Ohio’s recreational marijuana market, but uncertainty still hangs over many in the sector.
The implementation of Ohio’s adult-use program has been mostly effective, according to industry experts. Up to $1 billion in recreational marijuana sales revenue could be available to the state by the end of the year, money that would have otherwise gone to the black market or the purses of Michigan dispensary owners.
As of early this month, around 110,000 pounds of marijuana flower had been sold since legal sales started in August of previous year. An additional 11.8 million produced goods, from individual vape cartridges to gummy packages, had been sold.
A 10% tax on recreational sales had brought in about $62.4 million for the state as of July.
However, growing pains continue behind the scenes. As the industry begins its second year, entrepreneurs continue to face challenges from uncontrolled hemp products, state rules that are still being implemented, and stringent advertising laws.
According to Tom Haren, a partner of Frantz Ward LLP and the chair of the Cannabis Law Practice Group, “I believe the program launch has been successful overall.” However, there are still clear obstacles to overcome. After all, Rome wasn’t created overnight.
How we got here
Voters adopted the citizen-driven initiative statute in 2023, which led to the legalization of marijuana for recreational use. In Ohio, adults over 21 are now permitted to possess up to 15 grams of concentrate and 2.5 ounces of cannabis. Additionally, they are permitted to grow a maximum of six plants per individual and a maximum of 12 plants per household. The state levies a 10% tax on marijuana sales for recreational use.
The initial statute’s adoption also created a regulatory framework that expanded on the Ohio Department of Commerce’s Division of Cannabis Control’s already-existing medical marijuana program. Sales started last August, and the implementation took around nine months.
However, as the program moves into its second year, the implementation of those restrictions is also still being completed.
Haren, who actively participated in the Issue 2 campaign that legalized adult-use marijuana in the state, stated that although the adult use program has been in place for a year, not all of the administrative procedures pertaining to it have been established.
Until recently, this included guidelines for the selling of pre-rolls, or joints, which were not allowed to be on the dispensaries’ shelves due to unfinished regulations. Sales have been a little slower than some had anticipated, in part because of the difficulty to offer these products in the first year.
Sales may soon begin, though, since the Division of Cannabis Control of the Ohio Department of Commerce recently issued guidelines for shops selling joints or pre-rolls.
Strict advertising rules
Ohio’s tight advertising regulations pose difficulties, according to business owners.
Dispensaries and other authorized operators are severely restricted in their ability to advertise their products under the state’s present rules, which were carried over from the medical marijuana program.
Since marijuana was legalized for recreational use, shops that formerly catered only to medical users have seen an increase in their clientele and are now facing competition from nearby recreational states like Michigan. Strict advertising regulations, however, have made it challenging for companies to inform customers about what is lawfully accessible in their areas, particularly as new dispensaries keep popping up and product lines grow.
There are 159 authorized dispensaries in the state that cater to both medical and recreational users.
According to some articles, Michigan is producing three times as much cannabis as its own residents use. According to Pete Nischt, vice president of Klutch Cannabis, which operates dispensaries around the state, “all of that cannabis has to go somewhere, and a lot of it ends up in Ohio.” Dispensaries in Michigan are allowed to advertise for recreational use. They can offer samples, run various deals and discounts, and do a lot of other things that we can’t.
After decades of prohibition, some Ohioans are still reluctant to embrace the recently authorized recreational marijuana market, according to industry experts.
I am aware that it will take time for people to accept this on a cultural level and for our industry to earn their trust. “After nearly a century of extremely strict prohibition, we’re just at the tip of the spear,” he added.
There are currently 37 farmers in the state, comprising 14 smaller growers with up to 3,000 feet of growing space and 23 larger producers with up to 25,000 square feet of product production capacity.
In order to produce gummies, vape cartridges, and other goods for both recreational and medical consumers, 46 processors are permitted to extract oils from marijuana plants. Six labs throughout Ohio test products for both medical and recreational consumers.
Intoxicating hemp industry
The relatively unregulated intoxication hemp market is another issue that experts are still facing in the second year of the sector. Because they include THC derived from hemp rather than marijuana, these products—which are frequently offered for sale at smoke shops, petrol stations, and online—are exempt from the regulations that apply to firms that hold a license to sell cannabis.
Industry supporters claim that this discrepancy is resulting in an unfair playing field.
According to Haren, the regulated marijuana industry has suffered because of the intoxicated hemp sector. The retail sale of intoxicated hemp products is essentially unregulated. It’s night and day when you contrast it with the regulations governing licensed dispensaries.
Legislative Challenges
Ohio’s cannabis sector has had to deal with legislative objections to the voter-approved law in addition to the program’s continuous rollout.
The General Assembly has the power to change the law by passing new legislation, even though the statute went into effect with the support of voters.
In February, the Ohio Senate passed state Senate Bill 56, which would significantly alter the initial legalization framework. These changes include limiting the number of active dispensaries to 400, banning smoking in the majority of public areas, and lowering the THC levels in adult-use marijuana extracts from a maximum of 90% to 70%. There is still uncertainty about the legislation in the House Judiciary Committee.
Looking Ahead
Haren is still hopeful.
As the year draws to a conclusion and 2026 approaches, I anticipate seeing a significant increase in the number of dispensaries operating. As a result, consumers will have more access, which is beneficial. According to Haren, it should also result in additional price reductions for dispensaries on average.
You know, I believe that other kinds of items will also be put on the market, such as pre-rolls, which aren’t or weren’t offered under the medical program, he added.
