Ohio Marijuana Law Update: cultivator applications, processor rule changes, proposed THC limits, and the ever-shifting federal landscape

Has it really been more than a month since my last post? Holy cow, we’ve got a lot to cover. Here’s what you need to know about what’s been happening in Ohio’s medical marijuana industry.

Cultivator applications due in June

The biggest news is that the Department of Commerce has finally given us all an indication of when we can expect medical marijuana cultivator applications to be due:

  • The applications will be released in mid-late April;
  • Level II applications will be due in early-mid June;
  • Level I applications will be due in mid-late June.

The Department has scheduled two separate deadlines for applications because it does not know how many applications to expect, and does not want to be overwhelmed at the outset. We should have a much better idea of the hard deadlines once the applications themselves are released.

Interestingly, following the release of the applications later this month, the Department will hold a webinar explaining the applications, followed by two 1-week periods in which the public can submit questions for clarification on the application. The webinar, as well as answers to any questions, will all be posted on the Medical Marijuana Control Program website.

We do not know much about the substance of the application yet, except that it will contain two main sections:

  • Section 1: Applicants will be identifiable and will address mandatory requirements (presumably the required liquidity, compliance with tax laws, background checks, etc.). This Section will be scored on a pass/fail basis.
  • Section 2: Applicants will be anonymous and will address the remaining portions of the application. This Section will be scored based on the rubric prepared by the Department. This Section will be scored by three teams, each identifying specific parts of the application:
    • Operations & Quality Assurance Plans;
    • Financial & Business Plans; and
    • Security Plans.

Also, the Department of Commerce has totally eliminated the designated territories referenced in the last post, so it will judge all of the cultivator applicants in each Level against one another statewide. This is a welcome change, in my opinion. You can view the latest medical marijuana cultivator rules by clicking here.

The financial requirements for processors have been amended

The Department also has provided some information regarding updates to the rules for medical marijuana processors. To begin, the designated territories have been removed (as was the case for cultivators), although the total number of medical marijuana processors to be licensed in Ohio remains at 40.

There have also been changes to the financial requirements for processors:

  • The liquid capital requirement for processors is $250,000, although if the applicant already holds a cultiavator provisional license and will be located within the same facility as the cultivator, then the liquidity requirement is $100,000;
  • The escrow/surety bond requirements have been reduced from $500,000 to $250,000.

Various other changes have been made to the processor rules, including changes to non-solvent extraction methods, the ability to acquire expired medical marijuana from dispensaries, and packaging/labeling requirements. This updated draft will now be submitted to the Common Sense Initiative and, accordingly, there will be further opportunity for public comment. The updated rules for processors have not yet been posted publicly, but when they are they can be viewed by clicking here.

The Board of Pharmacy will limit medical marijuana possession based on THC content

The State Board of Pharmacy has taken an unusual step of limiting the statutorily-mandated 90-day supply based on THC content. Here are the limits of medical marijuana that may be possessed by Ohio patients in each 90-day period as initially proposed by the Board:

Note: for medical marijuana products the supply is limited based THC content, not the overall weight of the product. You can review the Board’s reasoning by clicking here. Read the full draft of form and method rules by clicking here.

Congress signals a willingness to consider marijuana reform while the Trump administration signals a willingness to engage in stricter enforcement

We are all watching Attorney General Jeff Sessions, Press Secretary Sean Spicer, and everyone else in the Trump administration to try to figure out how they will approach state-legal marijuana markets throughout the country. Initially, Sean Spicer warned that we might see stepped-up enforcement, although he also indicated that the administration may take different approaches for adult-use and medical marijuana markets.

Jeff Sessions has also said that the 2013 Cole Memo was “valid,” and recognized that the Department of Justice may not have the resources to start prosecuting state-legal operators. That being said, he’s kept up his drug warrior rhetoric in public.

Most recently, a DOJ task force has been formed to address crime reduction and public safety. Part of their job will be to review policies relating to “charging, sentencing, and marijuana” to “ensure consistency with the Department’s overall strategy on reducing violent crime and with Administration goals and priorities.”

Here’s some unsolicited advice for Attorney General Sessions and his Task Force: if you want to reduce violent crime, then leave states alone to regulate marijuana to eliminate the black market, increase transparency and safety, and take money away from dangerous cartels.

Meanwhile, over in Congress there have been several bills introduced in both the House and the Senate — by both Republicans and Democrats — that would reform federal marijuana laws in various ways.  Marijuana Business Daily provides a good summary of some of the proposed legislation that has been introduced, and their would-be impact on marijuana businesses:

  • H.R. 331: States’ Medical Marijuana Property Rights Act;
  • H.R. 714: Legitimate Use of Medicinal Marijuana Act;
  • H.R. 715: Compassionate Access Act;
  • H.R. 975: Respect State Marijuana Laws Act;
  • H.R. 1227: Ending Federal Marijuana Prohibition Act;
  • S.776: Marijuana Revenue and Regulation Act;
  • S. 777: Small Business Tax Equity Act;
  • S. 780: Responsibly Addressing the Marijuana Policy Gap Act;
  • H.R. 1810: Small Business Tax Equity Act;
  • H.R. 1820: Veterans Equal Access Act;
  • H.R. 1823: Marijuana Revenue and Regulation Act;
  • H.R. 1824: Responsibly Addressing the Marijuana Policy Gap Act; and
  • H.R. 1841: Regulate Marijuana Like Alcohol Act.

While passage of these bills may be a pipe dream, this could signal an increasing likelihood of reform on the federal level sometime in the next few years.

Join me at the Marijuana Business Conference & Expo in Washington D.C.

Last but not least, come out to the Spring Marijuana Business Conference & Expo sponsored by Marijuana Business Daily! The conference will take place from May 16-19 in Washington, D.C., and takes place during the same time as the National Cannabis Industry Association Lobby Days. The Conference will feature over 60 presenters, 275 exhibitors, and attendance is expected to top 3,500 cannabis industry professionals. Believe me when I tell you that this is a terrific conference that you do not want to miss.

I will be speaking about Ohio’s market on the Friday of the Conference, so you know there will be some information directly applicable to prospective Ohio medical marijuana cultivators, processors, and dispensary owners. Message me if you would like a discount code to get an additional $50 off of your admission!

As always, if you are interested in becoming involved in Ohio’s medical marijuana industry, don’t hesitate to give me a call at (216) 566-8200. 

Leave a Reply

Your email address will not be published. Required fields are marked *