The Results Are in For Ohio’s First Two Weeks of Adult-Use Legalization

Ohio’s debut of non-prescription adult-use cannabis sales is significant, although not necessarily record-setting. Dispensaries have sold more than 1,200 lbs of cannabis within the first week of adult-use sales becoming legal in the state. The Ohio Division of Cannabis Control released new data showing that consumers spent more than $11.5M on cannabis statewide in the first five days. Dispensaries were allowed to begin selling adult-use cannabis on Tuesday, August 6th.

Ohio still needs to disclose its precise tax revenue figure. Adult use of cannabis is subject to a 10 percent tax, which dispensaries must pay each month, in addition to the nearly six percent Ohio sales tax. This tax, estimated to generate millions of dollars in revenue, is a significant source of income for the state. 

In the nearly two weeks since Ohio legalized cannabis for adult-use, dispensaries sold 1,285 pounds of cannabis, while medical marijuana sales generated an additional $8.3 million. According to the Division, the average price of an ounce of flower was $266 last week.

The Adult-Use Use Vs. Unregulated Market

“Ohio sits in a prime location to service not only adult Ohioans but also residents of Pennsylvania, West Virginia, Indiana, Kentucky, and more non-adult-use states,” said Ohioan Tim Johnson, a consultant and advisor at Cannabis Safety First. “With the population of cannabis consumers in the Midwest, Ohio is posed to relish in the billions in yearly adult sales rather quickly.” 

Johnson puts the current unregulated market cap at four to five billion dollars. 

Such a prolific unregulated market share raises concerns about how the legal Ohio cannabis industry will tap into it. The unregulated market cap represents a significant opportunity for the legal cannabis industry but also underscores the need for effective regulation and oversight, according to Johnson. 

“Let’s hope they will start with inclusivity, concerning the personal cultivation community, with fair pricing, with top shelf products, and with stopping the fear-mongering comments on unsafe products in the illicit community,” he continued. 

All of these variables will play a vital part in ascertaining whether Ohio can quickly become a cannabis leader that other states can follow as a best practice rule, despite several other states having a head start on adult-use legalization. Adult-use cannabis was legalized in Ohio in November after voters passed Issue 2 by a 57 to 42 percent margin.

Ohio currently has 120 dual-use dispensaries, meaning they can sell both adult-use cannabis and medical marijuana, according to the Division. When adult-use sales began, Ohio had 98 dual-use dispensaries. 

According to Ohio State University’s Moritz College of Law, the local opposition’s NIMBYs (Not in My Backyard) have placed moratoriums prohibiting adult-use cannabis businesses in more than 70 Ohio cities. 

As for how the state of Ohio plans to spend its cannabis tax revenue, it’s a carefully planned distribution. Three percent goes to the Division of Cannabis Control (DCC) and Tax Commissioner Fund, which supports its operations and covers the tax administration costs. Thirty-six percent goes to the Cannabis Social Equity and Jobs Fund, which promotes social equity and job initiatives. Another thirty-six percent goes to the Host Community Cannabis Fund, which benefits municipal corporations or townships with adult-use dispensaries. The remaining twenty-five percent goes to the Substance Abuse and Addiction Fund, which supports transitioning people with substance abuse disorder off addictive substances.

Time will tell if Ohio’s nascent, legal adult-use market remains robust.