Since its inception, Ohio’s medical cannabis program has been managed by two agencies, the Department of Commerce and the Board of Pharmacy, which split the responsibilities of overseeing the state’s cultivators, dispensaries, processors, patients and testing laboratories.
This may soon change.
Ohio Gov. Mike DeWine’s 2024-2025 fiscal year budget proposal, released Jan. 31, recommends that the Department of Commerce exclusively manage the Ohio Medical Marijuana Control Program starting in FY 2024.
The Ohio Department of Commerce is currently responsible for monitoring, licensing, and enforcing and developing regulations for medical cannabis cultivators, processors and testing laboratories, according to ohio.gov.
While the Board of Pharmacy, which consists of nine members, eight pharmacists and 100 employees, oversees the licensing and regulations for medical cannabis dispensaries, caregivers and qualifying patients, according to the budget.
In the proposed budget, the Ohio Department of Commerce’s budget would jump from more than $3.7 million in 2022 to nearly $8 million in 2024 and more than $9 million by 2025, while the Board of Pharmacy’s operating expenses for the cannabis program would decrease, dropping to $0 by FY 2025.
Senate Bill 9
There is also an Ohio Senate Bill–Senate Bill 9–that complements the changes in the proposed budget. Senate Bill 9 would create a 13-member Medical Marijuana Oversight Commission that would oversee the Division of Marijuana Control, which would fall under the Ohio Department of Commerce.
Senate Bill 9 mirrors similar legislation introduced in the general assembly last year–Senate Bill 261—which failed in the House. Like Senate Bill 261, Senate Bill 9 aims to update Ohio’s medical cannabis legalization law, House Bill 523, which passed in 2016, says Geoff Korff, CEO and founder of Galenas, a Level II cultivator in Ohio’s medical cannabis program.
“[Senate Bill 261] was resurrected in Senate Bill 9, but the language is a bit different,” he says. “Senate bill 9 differs from Senate Bill 261 in that it creates this commission that oversees the industry here in Ohio, and it’s not the same as some of the committees or medical board or anything currently in place. One thing that is the same is that the Board of Pharmacy is taken out of the program, and the whole program is merged underneath the Department of Commerce.”
Korff says that moving the medical cannabis program under the Department of Commerce could help create less regulatory conflicts and streamline processes for operators.
He says there have been situations where the Department of Commerce and the Board of Pharmacy have differing views on packaging, strain names or other program rules, which creates a hassle for businesses.
“Sometimes Commerce will approve some packaging, but Pharmacy also has to approve it if it’s going to be sold in the dispensary, … and sometimes they disagree,” he says. “So there have been numerous instances where companies have had stranded packaging where it’s gotten one level of approval, and it hasn’t gotten the second level approval, or the approval is revoked at some point, which is even worse.
“So by eliminating this two-step approval process, it will absolutely make it easier for businesses and make it much more streamlined for the patient population as well because products will come to market in a more timely way and expectations will be a lot more clear. … Once everyone is operating with the same fundamental assumptions because it’s all under one regulatory body, I think it’s going to make things a lot easier for everybody, patients included.”
Limited License State
Korff says another significant change in Senate Bill 9 is the opportunity for Level II cultivators to get a dispensary license. The measure permits the Division of Marijuana Control to issue one provisional retail dispensary to each Level II cultivator, according to the bill text.
“There’s a lot of leverage that comes from having access to the end user,” he says. “And if you’re not vertically integrated in the cannabis industry, you’re really beholden to the groups that are or the groups that have a big retail footprint. In a state like Ohio, where it is very limited in terms of the number of licenses …. there are only so many retail outlets that Level II’s can potentially sell to. When you don’t have the leverage … of having your own retail operation, you are at a pretty significant disadvantage.”
In line with the limited retail licenses in Ohio is patient accessibility.
Theresa Daniello, patient advocate and president at The Endocannabinoid System Think Tank and Wellness Company (TDCANN Institute), says she thinks moving all industry oversight under the Ohio Department of Commerce will benefit Ohio medical cannabis patients and increase accessibility.
“Speaking from a patient’s perspective, … and recognizing that the Department of Commerce is responsible for many businesses all over the state of Ohio and making sure that they’re being run most efficiently for our citizens, I believe it’s going to help the patients,” she says.
Daniello is hopeful the Department of Commerce will reevaluate the number of retail licenses and their locations.
For example, as of Feb. 7, there were 64 active retail licenses and 330,280 registered patients in Ohio–that’s about 5,161 patients per dispensary. The number of patients per dispensary is on the higher end compared to other medical-only markets. For example, as of Feb. 10, there were 788,633 registered patients and 528 dispensaries in Florida–that’s roughly 1,494 patients per dispensary.
“So, the way that we have worked in the past with licensing or accessibility is … by patient population; that’s how they’re doing dispensaries in Ohio,” she says. “Perhaps that’s not in the industry’s best interest; perhaps we should be looking at the population in general rather than the patient population because there are patients that can’t participate in the industry because they have to drive so far to a store.”
Regarding patient accessibility, Senate Bill 9 would also add new qualifying conditions and allow medical cannabis use “for other conditions that physicians, in their discretion and medical opinion, determine are debilitating to a patient,” Cleveland.com reported.
Korff says that expanding the qualifying condition list and allowing physicians to diagnose patients at their discretion will help the patient population reach a more representative level, which the Department of Commerce will respond to.
“I think that the way the law is written, it will allow for the development of the medical market,” he says. “I get what the legislature is doing by not just opening [licensing] up to the general population. … So, I certainly think this is a compromise, … without getting too far ahead of themselves.”
Daniello also argues that patient affordability is another nuance in Ohio’s medical market that she hopes to see change under the Department of Commerce.
For example, in a patient survey conducted by Ohio State University’s Drug Enforcement Policy Center and an advocacy group called Harm Reduction Ohio in September 2019, patients said “cost is the greatest obstacle to purchasing products in the state, followed by the distance to the nearest dispensary,” CBT reported.
In a more recent patient satisfaction survey conducted by The Ohio State University’s Drug Enforcement and Policy Center and the OMMCP in late 2022, patients expressed higher satisfaction with the program for the first time in four years; however, more than 50% of patients still said they agreed that the cost of cannabis in dispensaries is too high, CBT reported.
Looking ahead, the budget proposal is now under review, and a final version must be signed by Gov. DeWine by June 30 for the appropriations to take effect July 1.
As for Senate Bill 9, the legislature has until May 3 to pass the law, and if the General Assembly takes no action, the Coalition to Regulate Marijuana Like Alcohol can collect signatures to place the measure before voters, Cleveland.com reported.
“I’m definitely more optimistic about Senate Bill 9, than I was about 261 in the last General Assembly,” Korff says. “I think the fact that this bill was introduced as one of the top 10 bills in the Senate is very meaningful. Typically, those bills get passed, but you never know what’s going to happen. … I think there’s enough good that is in this bill that everyone is going to recognize it is really kind of needed by our industry. … If I had a bet, I guess I would say it’s more likely than not that this bill passes in some form.”
