Ohio’s medical cannabis sales are off to a healthy start, garnering $1.85 million in under two months, but high prices and limited access to dispensaries have restricted patient participation.
Since sales began Jan. 16, the state’s medical marijuana dispensaries have averaged $248,000 in weekly sales – a strong launch to a market estimated to net $300 million to $500 million annually when mature – but only 28% of registered patients have visited a dispensary.
Of the 19,395 who have signed up since the registry opened Dec. 3, only 5,465 unique patients have made a medical marijuana purchase.
This may be related to sales starting with only four dispensaries. Although nine dispensaries are now open, limited geographic distribution persists.
Another well-cited factor keeping patients away: high prices.
The average price in Ohio has hovered at $480 per ounce – substantially higher than per-ounce medical prices in bordering Michigan.
A Marijuana Business Daily analysis of pretax pricing found medical marijuana flower averaged $320 per ounce in Michigan dispensaries near the Ohio border during the first week of March 2019.
The considerably lower prices and the state’s reciprocity program are driving the trend of Ohio patients traveling across the border to purchase medical cannabis in Michigan despite the legal risks involved.
Current high costs stem, in part, from supply constraints, common in new and developing markets as cultivators come online. Prices in Ohio are likely to come down as the market matures.
Pennsylvania – a developing market entering its second year of medical sales – averages $480 per ounce while the mature medical markets in Massachusetts ($350 per ounce) and Illinois ($375 an ounce) are much lower.
Medical flower prices in Oregon – which faces downward pressure from oversupply and competition from a thriving adult-use program – are in the same price range as Ohio’s illicit market.
Here’s what else you need to know about the situation:
- Initial sales in Ohio were restricted to flower for vaping as the state did not issue a certificate of operation to a processor until early March. The Ohio Medical Marijuana Control Program (OMMCP) now reports 38 processors have been issued provisional licenses and are awaiting certificates of operation.
- As of March 7, the OMMCP had issued certificates of operation to 16 cultivators, nine dispensaries and three testing labs.
- Physician buy-in has been robust, with 413 registered physicians providing 22,276 medical marijuana recommendations by March 7.
Maggie Cowee can be reached at maggiec@mjbizdaily.com
