1. Understand regulatory and legal requirements. Do market research.

Ohio Cannabis Legalization

Ohio Governor John Kasich signed legislation legalizing medical cannabis in June 2016, making the state the 26th to join the legal cannabis market, and in November 2023, Ohio voters approved a measure to legalize recreational cannabis, making it the 24th state to do so. The initiated statute became effective December 7, 2023.

Ohio Cannabis Market

Initial applications for dual-use licenses (which allow existing medical cannabis dispensaries to operate in both the medical and recreational cannabis market) became available on June 7, 2024. Recreational cannabis sales began on August 6, 2024, after the Division of Cannabis Control (DCC) issued certificates of operation to 98 medical cannabis dispensaries.

In December 2024, the DCC issued proposed rules (Rule Package 6) for the state’s adult-use cannabis program. So far, some of the rules in Rule Package 6 have been approved and can be found in OAC 1301:18 which is now in effect.

2. Decide the type of cannabis business. Choose a location. Check local zoning regulations.

Ohio Cannabis Licenses

The following Ohio medical cannabis business licenses are available to apply for:

“Provisional license” means a temporary license issued to a medical cannabis entity that establishes the conditions that must be met by the medical cannabis entity before the entity is issued a certificate of operation.

“Certificate of operation” means a license authorizing a medical cannabis entity to begin operating.

Ohio Cannabis Delivery

Delivery of medical or recreational cannabis is not allowed in Ohio.

Cannabis Delivery Service by State

3. Develop a solid cannabis business plan. Secure financing.

4. Submit an application. Pay fees.

(A) Submit an application form to the Department of Commerce (the Department) with all the required information.

(B) A provisional license will be issued to selected applicants. Until a Certificate of Operation is issued to the provisional licensee, they cannot perform any cultivation, processing, dispensing or testing activities involving medical cannabis.

The application must include the following:

• A cannabis business plan.
• A financial plan with evidence of sufficient liquid capital (no less than $250,000 for dispensaries)..
• An operational plan.
• A quality assurance plan.
• A security plan and valid zoning determination letter with verification that the proposed facility is not located within 500 feet from a prohibited facility as defined in section 3796.30 of the Revised Code.
• Documentation sufficient to show that the applicant is in compliance with the relevant tax laws of the state and any jurisdiction where the applicant operates.
• Writing certifying that at the time of application the owner or other person who may significantly influence or control the activities of the processor has not been convicted of a disqualifying offense.
• Other information that the Department of Commerce requests from prospective licensees during the application.

For a medical cannabis dispensary provisional license application, additional information to be provided is not limited to:

• A tax authorization form on behalf of the business.
• The physical address of the proposed location for the dispensary.
• Confirmation of registration with the Ohio Secretary of State as the applicable type of business.
• A list of all owners, officers and board members of the provisional dispensary applicant.
• Site-specific plans showing the interior and exterior of the proposed medical cannabis dispensary facilities.
• Site-specific construction or renovation budget and schedule prepared by the contractor or architect which show when the applicant plans to begin operating.
• A budget for the dispensary with projected staff, equipment and other operating costs covering the time period from:
  • The award of the provisional license to issuance of the Certificate of Operation and,
  • Issuance of the Certificate of Operation until at least 4 months after receipt of the certificate.

In addition to this, the Department may also consider the following when deciding whether to issue a provisional license to the applicant:

• Principal place of business.
• Environmental plan.
• Employment practices.
• Research plan.

A medical cannabis dispensary provisional licensee must submit a written report to the Board of Pharmacy every month until the receipt of a Certificate of Operation to detail the progress towards becoming operational.

5. Obtain the required Certificate of Operation. Pay fees.

(C) Obtain the required Certificate of Operation.

(D) A non-refundable fee must be paid at the time the Certificate of Operation is issued.

For a provisional dispensary, the following steps must be followed to obtain a Certificate of Operation:

1. A provisional dispensary licensee must:

• Name a designated representative and submit fingerprints for a criminal background check.
• Comply with the representations made in the application submitted by the provisional dispensary licensee.

2. Notify the Board of Pharmacy that the dispensary is ready to begin operating.
3. Within 30 days from the notification, the final inspection of the facilities will take place.
4. If the final inspection is satisfactory, the dispensary must submit the fee for the Certificate of Operation.

The dispensary can begin operating on the date that the Certificate of Operation is issued.

Dual-Use and Adult-Use Licensing

Like the medical cannabis program, Ohio’s recreational cannabis program offers four different licenses: cultivator, processor, retail and testing. Initially, only licensed medical cannabis facilities and those who qualify under the Cannabis Social Equity & Jobs Program will be able to apply for licenses. Two years after the program launches, the division will begin making a biennial decision on whether to issue additional licenses.

1. Dual-use license: allows currently licensed medical cannabis facilities to participate in both the medical and recreational cannabis market.
2. 10(B) license: allows licensed medical cannabis cultivators and dispensaries to operate a recreational cannabis dispensary.
3. Licenses issued under the Cannabis Social Equity & Jobs Program.

No person can possess more than one adult-use cultivator license, more than one adult-use processor license, more than one testing laboratory license, or more than 8 adult-use dispensary licenses. A person in possession of a provisional license or Certificate of Operation for a different cannabis entity, cannot also possess a provisional license or Certificate of Operation for a testing laboratory.

6. Keep track of your ongoing compliance requirements.

Physical security measures, good production practices, packaging, labelling and transport requirements, reporting requirements and more.

7. Renew your Certificate of Operation. Pay fees.

At least 30 days before the expiration date of the Certificate of Operation, the applicant must:

• Submit a complete renewal application, along with a disclosure of ownership, control and financial interest.
• Pay the renewal fee.
• Pass a full inspection.
• Submit evidence of compliance with all applicable tax laws.

For a dispensary, the following must be submitted to the Board of Pharmacy at no earlier than 90 days and no later than 45 days before the expiration date:

• A completed medical cannabis dispensary renewal application.
• A roster with all the dispensary employees’ names and license numbers.
• Documentation sufficient to confirm that the applicant complies with all relevant tax laws of the state.
• The required renewal fee.
• Any additional information requested by the Board of Pharmacy.
• If premises on which the facility is located are leased, then an attestation that the premises have been leased for the following two years must also be provided.

If the renewal application is not submitted before the expiration date, the Certificate of Operation is suspended and the applicant has 30 days to successfully renew the Certificate of Operation. If they do not, then the license will be revoked.

If a dispensary files a renewal application fee less than 45 days before its expiration date, the application will only be considered complete if the required late fee of $10,000 is paid in addition to the application fee. If the renewal application is not filed before the expiration date, the Certificate of Operation will be considered expired.

Ohio Cannabis Taxes

The rate of the adult use tax is 10%. The adult use tax applies and is collectable when the sale is made, regardless of the time when the price is paid, or when the adult use cannabis is delivered.

The adult use tax is in addition to the sales tax levied or collected under Chapter 5739 of the Revised Code on adult use cannabis sales by adult use dispensaries to adult use consumers.

(R.C. § 3780.22)

Ohio conforms to the Internal Revenue Code with the starting point is Federal Adjusted Gross Income. There is no provision that states Section 280E does not apply at state-level since Ohio does not have a corporate income tax.

Cannabis Advertising Regulations in Ohio

(A) No advertisement for cannabis may be placed in any of the following media:
(1) On a medium with a high probability of reaching persons under the age of 18.
(2) Within 500 feet of the end boundaries of a parcel of real estate having situated on it a prohibited facility.
(3) On a billboard.
(4) On a radio or television broadcast or internet programming.
(5) Left on any private property without the consent of the property owner.
(6) On or in a public transit vehicle or public transit shelter.
(7) On or in a stadium or arena.
(8) On or in government-owned or operated property; or
(9) At any scheduled event, which includes conferences, trade shows, or similar events that the licensee plans to attend, participate in, or sponsor, whether educational or otherwise, unless the licensee provides the division with written notice of its intent to attend at least ten business days prior to the event.

(B) A licensee may sell merchandise to persons 18 years of age or older, provided that the licensee warrants that any merchandise sold contains only depictions, representations or branding previously approved by the division.

(С) A licensee may develop a website or otherwise establish a web presence advertising the name, business address, contact information, and services provided by the licensee which requires age affirmation of at least eighteen years of age by the user before gaining access to licensee’s website.

(D) A licensee may use a sign located within the external boundaries of the lot on which the licensee is located.

(E) A medical cannabis dispensary shall not use a name, logo, sign or advertisement unless the name, logo, sign or advertisement has been submitted to the state board of pharmacy and the applicable advertising approval fee has been paid.

(R.C. §3780, §3796)

Main steps in short

• Understand regulatory and legal requirements. Do market research.
• Decide the type of cannabis business. Choose a location. Check local zoning regulations.
• Develop a solid business plan. Secure financing.
• Obtain required state licenses. Pay fees.
• Obtain required certificates of operation. Pay fees.
• Renew your Certificate of Operation. Pay fees.
• Keep track of your ongoing compliance requirements.

Cannabis Retail Business Plan Sample, Ohio

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