Nearly three months after Ohio voters approved Issue 2 in November 2023, effectively legalizing adult-use cannabis in the state, cannabis regulators released a small set of proposed rules for Ohio’s adult-use market, focusing on requirements for certain applicants seeking to become licensed retailers. These proposed rules, which are the first in what is expected to be multiple batches of rules for Ohio’s new adult-use cannabis program, contain proposed fees for various business licenses, details on how the application process would work, and information on how medical cannabis businesses could transition to a dual license to serve both medical and adult-use consumers. The rules must be finalized before the state’s adult-use market can officially launch, as legal sales of adult-use cannabis cannot occur until licenses are issued.
Ohio’s Division of Cannabis Control (the “DCC”) was requesting stakeholder feedback on the recently released proposed rules until February 9th. In accordance with Chapter 119 of the Ohio Revised Code, the DCC will review and consider the comments received prior to submitting the proposed rules to the Common Sense Initiative and the Joint Committee on Agency Rule Review. Both of these processes will give stakeholders further opportunity to comment on the proposed rules. The timeline for legal sales is likely one of the topics that will receive the most commentary, especially because Governor Mike DeWine has criticized the “goofy situation” Ohio is in, where adults 21 and older are able to legally possess and grow marijuana, but there are no legal avenues available to purchase adult-use marijuana in the state.
Notably, the proposed rules may need to be amended, as Governor DeWine and a number of state legislators have been pushing for a series of changes to the ballot measure Ohio voters passed, including a possible expedited timeline to allow existing medical cannabis dispensaries to begin serving adult-use consumers within months, instead of waiting until September for the first potential licensing approvals. The problem in Ohio is that because Issue 2 was an initiated statute ballot measure approved by voters, the statute may be amended by the state legislature; and the Ohio Legislature is indeed actively considering updates to the statute. Any amendments to the statute would likely then impact the timeline for the rulemaking and the applications and licensing processes. As such, as far as the Ohio adult-use cannabis industry goes, everything is still up in the air.
For the time being, though, the proposed rules would require regulators to begin accepting applications from medical cannabis operators seeking a dual license by June 7th; and the DCC would need to begin issuing provisional licenses to eligible entities by September 7th. The proposed rules also describe how the DCC would need to post notice of an exclusive application window for prospective licensees who participate in a social equity and jobs program that is being developed.
