Ohio and Kentucky Openings Mean 51% of Americans Now Live in Adult-Use States and 70% Will Have Medical Access Soon

With the August 6 launch of adult-use sales in Ohio, the legalization movement marked a major milestone: More than half of Americans (51%) now live in states with operating legal dispensaries. When Kentucky launches medical-only sales in January 2025, 70% of Americans will have medical access. The latter equals the 70% approving full legalization in the latest November 2023 survey by Gallup, an all-time high in an annual poll that measured 12% approval when it started in 1969.

With enormous potential – and many uncertainties – facing these launches in two Ohio Valley states with 16.2 million residents, Zuber Lawler and Global Go will present Kentucky and Ohio editions of the OHO Cannabis Connect gatherings September 11 and 12 in Louisville and Cincinnati.

“In Kentucky, we’re really up and moving and positioning ourselves to be the doorway to the south,” Lauren Bratcher, deputy director of Kentucky NORML and speaker at the Louisville event, told us in a pre-event discussion. Although there will only be 28 licensed shops on day one (just 6 locations per million in population), Bratcher sees enormous potential in the fact that jurisdictions that opted out of allowing retail dispensaries were “only some tiny townships in counties that opted in.”

On top of a small number of stores, supplies are likely to be lean too, at least initially. OHO Speaker Michael Adair, co-founder of cultivation applicant Kentucky Farmed, notes that the state is initially only licensing 115,000 square feet of canopy, or about 2.6 acres of greenhouse space. At about 3,700 plants per acre and a half pound yield per plant, Kentucky growers would be able to produce 4,810 pounds, say 3-6 months after starts are planted, maybe 2.5x that over the course of the first year.

But medical cards are only going to cost $25 in Kentucky, which could allow the patient percentage of the 4.5-million population to grow to 2% in year one. Twelve thousand pounds would work out to 5,500 kilos, just 1.2 grams/week for each of 90,000 patients. If Kentucky has the kind of explosive patient-count growth Oklahoma saw (6% of the population in year 2) there might be a lot of empty shelves in licensed stores. But Adair gives Kentucky’s regulators credit for “wanting people to succeed. They will expand supply when they see that we need more grow capacity.”

The supply crunch could be even more severe in Ohio, as it usually is with adult-use transitions. Geoff Korff of Galenas has been straddling the northern state line with grow operations in Ohio and Michigan since 2019. That puts him in a great position to watch the contrasting ebb and flow of supply and demand. “Michigan stores in ’22 and ’23 probably had a bigger piece of the Ohio consumer market than Ohio stores had,” he said. Cross-border competition helped make Ohio’s one of the least successful medical markets in the country, flattening out at just 150,000 patients (1.2% of the population). “Now, in the five weeks since the start of adult-use sales, Ohio retailers are telling us their customer counts have almost doubled,” Korff said.

But a doubling of customer counts comes on a very limited medical-only base of some 160,000 patients, about 1.4% of the population. “We’re still operating under the medical regime essentially,” noted Zach Weprin, president of Certified Cultivators, which has been supplying the market since 2020. The tight regulations in Ohio’s medical era left it with just 134 dispensaries operating for the adult-use launch, just 11 per million in population, the kind of low store penetration that has badly crimped adult-use launches such as those in recent years in New York and New Jersey.

Fellow OHO-Ohio speaker Lucas Gould, CEO and Founder of payment/rewards app-developer Spendr, worries that “we could even see some tightening of marketing restrictions,” noting that regulators have already fined some dispensaries for releasing marketing materials promoting the adult-use launch for “using words that were too recreational.”

TOM ADAMS is the Founder and Principal Analyst of Global Go Analytics. As founder of Adams Media Research and Adams Cannabis Research, as well as former head of Industry Intelligence at BDSA, Tom is the most experienced industry analyst and strategic consultant in legal cannabis. He can be reached at tadams@globalgo.consulting..