Ohio’s adult-use marijuana sales launch gets off to ‘really special’ start

Dozens of medical cannabis dispensaries in Ohio on Tuesday began selling adult-use marijuana products, ushering in a new era for the state and another potential billion-dollar market in the Midwest.

The final green light for recreational marijuana sales was given to 98 stores earlier in the day when the Ohio Department of Commerce Division of Cannabis Control issued dual-use certificates of operation to those businesses.

Most of those retailers, including Akron-based Klutch Cannabis, started selling adult-use products Tuesday morning, with other licensees expected to commence recreational sales by week’s end, industry sources told MJBizDaily.

“It feels really special to us because this is our backyard. This is our neighborhood,” said Pete Nischt, vice president of compliance and communications at Klutch Cannabis, a vertically integrated company with The Citizen stores in Canton and Lorain.

Market watch

Other retail entrants in the expanded but limited-license market include several multistate operators, including Ayr Wellness and Verano Holdings Corp., as well as some locally grown operators such at Klutch and Queen City Cannabis.

The first-movers will compete in a market with sales projected to eclipse $1 billion in 2025 and hit $1.5 billion-$2 billion by the end of 2027, according to updated MJBizDaily forecasts.

Ohio is the 24th U.S. market to start adult-use sales, following Maryland’s launch in July 2023 and Missouri’s debut in February 2023.

And similar to Maryland and Missouri, Ohio’s recreational market debuted without a social equity program.

The nearly one-year gap between adult-use market launches is believed to be the marijuana industry’s longest drought since the first wave of consumer access more than a decade ago.

Long lines

Klutch began sales at 10 a.m. ET Tuesday, with customers lining up outside both locations.

Its sales floors and lobbies were packed for hours, Nischt said, and preorders were also plentiful.

The retailer handled the rush with added staff and checkout terminals, turning customers quickly while still offering shoppers time and space to peruse products and consult with budtenders, he added.

“Pretty incredible for a Tuesday morning/afternoon,” Nischt said within hours of The Citizen stores opening their doors.

“I expect this to continue into the evening, especially after people get out of work.”

Runway to ramp-up

In some ways, Ohio’s cannabis growers, processors and retailers have been readying operations for the influx of hundreds of thousands of new customers since the state’s voters overwhelmingly approved the cultivation and sale of recreational marijuana last November.

With nearly 12 million residents, Ohio is the seventh-most-populous state in the country, and nearly three-quarters of the state’s residents are older than 21.

Ayr Wellness, for example, said it has been prepping its retail stores for months for the start of adult-use sales.

The Miami-based MSO added staff and checkout kiosks to enhance the shopping experience for existing medical marijuana patients and new consumers at its locations in Dayton, Goshen and Woodmere.

Its wholesale operation is also expected to get a business boost, according to Julie Winter, a senior vice president at Ayr and market general manager for Ohio.

“This launch marks a significant growth opportunity … and we are committed to supporting our partners and serving the Ohio community across retail and wholesale,” she told MJBizDaily via email.

New York-headquartered MSO Curaleaf Holdings expanded its cultivation capacity and boosted staffing in advance of the Ohio launch.

“Additionally, we’ve introduced dedicated point-of-service (POS) systems and lines for our medical patients to ensure they receive the specialized care they deserve,” Paul Chialdikas, senior vice president and Central Regional leader for Curaleaf, told MJBizDaily via email.

Border business

Retail sales along border states is a key revenue driver in the U.S. marijuana sector.

Chicago-based Verano Holdings Corp., which is participating in its eighth market expansion, began serving adult-use consumers at four of its stores, including one in Cincinnati near the Kentucky state line.

Kentucky is in line to launch medical marijuana sales – but not until next year.

“We’re definitely looking for a big bump,” Verano President Darren Weiss told MJBizDaily in a phone interview.

“The nice part about Ohio is that you are connected to a number of these prohibition states, and some, we don’t expect to be adult use anytime soon.”

Ohio borders five states, but only Michigan has a regulated adult-use market.

Medical marijuana rules apply for now

In one of several ways Ohio’s launch deviates from other state rollouts, operators must abide by existing MMJ regulations until final rules are approved for adult-use retail.

That’s expected to happen sometime before Sept. 7, when all dual-use licenses must be issued to recreational businesses. That was a requirement in the voter referendum.

Temporary restrictions in Ohio include:

• A ban on pre-rolls, one of the most popular marijuana products nationwide.
• A 70% THC potency cap on concentrates.
• A unique requirement to sell flower only in 1/10 of an ounce increments.

The state’s limited product rollout might actually help ease inventory demand, sources told MJBizDaily.

It’s fairly common for new adult-use markets to experience inventory and production shortages, as the expanded customer base is typically at least twice as large as the MMJ market.

“I have no long-term concerns about the infrastructure in the state. There’s adequate supply to bring to market,” Verano’s Weiss said.

“It’s really about who can deliver consistency, quality and good customer service across the market.”

Chris Casacchia can be reached at chris.casacchia@mjbizdaily.com.