Ohio Prepares for Dispensary Application Round

Foley Hoag LLP - Cannabis and the Law
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Foley Hoag LLP - Cannabis and the Law

With much of the cannabis oriented media focusing on the flurry of adult use bills and opportunities, it is easy to overlook that many states are doubling down on their medical marijuana infrastructure. For instance, over just the last few weeks, the Ohio Board of Pharmacy (“Board”) began its efforts at more than doubling its number of medical marijuana dispensaries. Ohio anticipates commencing an application round soliciting up to 73 additional dispensaries at some point in the “spring/summer 2021.”

Ohio has seen tremendous growth in its patient population up to 136,507, but, until recently, faced a cap of 60 total dispensaries (with only 57 provisionally licensed). However, on April 19, 2021, the Board approved increasing the cap by an additional 73 dispensaries, which, if all are issued, would bring the total number of dispensaries to 130. Ohio also has provisionally licensed 34 cultivators (inclusive of Level I and Level II licenses), as well as 48 processing licenses. Sales figures place an average price in the market of $30.46 per 1/10oz and $42.69 per unit of manufactured products.

While the application contents for the upcoming Spring/Summer 2021 application round is anticipated to be similar in content to prior rounds, there is one glaring difference: a lottery. For instance, though applicants will be required to affirmatively demonstrate their qualifications and suitability, once deemed viable, said applicants will then be entered into a lottery system within the respective application districts. The Board’s hope is that this lottery system will “result in a fairer, more streamlined system for awarding dispensary licenses.”

Thus, a large portion of strategy will focus on the current geographic distribution of dispensaries. Overall, Ohio has 31 medical marijuana districts, with the Ohio Board of Pharmacy amending how many dispensaries will be available per district predicated upon: (1) population of the state; (2) number of patients seeking to use medical marijuana; and (3) the geographic distribution of dispensary sites. The goal of the forthcoming request for applicants is to increased dispensary counts in several districts, including, but not limited to, increasing dispensaries from 3 to 11 in Hamilton County, 6 to 15 in Franklin, and 5 to 12 in Cuyahoga.

But make no mistake, Ohio will not be as simple as buying a lottery ticket and hoping you win. For instance, the Board has made clear that  any“[d]ispensary application will [first] be scored to determine who is a qualified applicant.” Beyond that, applicants will have to make a strategic determination on what counties/districts have what number of new dispensaries available and how said applicant will make the determination as to which district to locate in. In short, though injected with one element of chance, there is nevertheless ample strategic considerations to make in anticipation of Ohio’s forthcoming medical dispensary round. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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