Ohio on Verge of Creating One of Largest Medical Marijuana Markets in the U.S.

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Ohio appears poised to become the newest state to approve a medical marijuana program, which could create one of the largest MMJ industries in the nation with patient numbers in the hundreds of thousands and annual sales in the hundreds of millions of dollars.

Correction: An earlier version of this story quoted an Ohio lawmaker as saying that Gov. John Kasich had 30 days from the bill’s passage to sign the measure. That is inaccurate. The governor has 10 days to sign it after receiving it from the legislature; if he does nothing, the bill becomes law automatically. The bill was sent to Kasich on Wednesday, June 8.

A medical marijuana bill approved by lawmakers last week stands a good chance of becoming law and is now the only legalization option left in the state for 2016.

The Marijuana Policy Project-backed campaign that was gathering signatures for a ballot measure this November halted its effort last weekend after Ohio lawmakers passed their measure.

That means the legislature’s bill will be the foundation for a new cannabis industry in Ohio, as long as Gov. John Kasich signs it into law.

State Rep. Stephen Huffman, a Republican, said he has received indications from Kasich aides that the governor is planning on signing House Bill 523.

“I’m confident that he will,” Huffman said Tuesday.

Lawmakers left it up to regulators to work out many details of any program, and some marijuana advocates are disappointed with the measure, saying it’s too restrictive.

But the bill, which clocks in at 126 pages, is a groundbreaking step for yet another midwestern state.

Twenty-one ailments are included in the broad list of qualifying conditions, ranging from chronic pain to cancer to post-traumatic stress disorder to glaucoma. The inclusion of chronic pain is important, as it can help boost patient numbers dramatically.

Aaron Marshall, spokesman for Ohioans for Medical Marijuana – the group that suspended its legalization campaign – estimated that around 200,000 residents would qualify to participate in the MMJ program. Although many would not actually sign up for medical cannabis cards, the patient base could be sizable.

Entrepreneurs looking to get into Ohio’s medical cannabis industry, however, will have to wait for many of the details to be ironed out.

“The business side of things is not really very in focus right now, because they didn’t make a lot of the decisions in the legislation,” Marshall said.

“They more or less just left it up to these various state government entities that are going to control various regulatory aspects of this,” Marshall added. “How many growers are there going to be? How many processors are there going to be? All of those details are going to be left to the boards to sort out and establish through rulemaking.”

Marshall also said firmly that if Kasich vetoes the bill, Ohioans for Medical Marijuana is prepared to restart its campaign to fully legalize MMJ.

As things stand, here’s a synopsis of what’s known and what’s still to be determined for the Ohio MMJ program, according to a legislative analysis of the bill:

  • The Ohio Department of Commerce and the state board of pharmacy would oversee the program, and it would be administered by the board and a medical marijuana advisory committee within the commerce department.
  • Local governments would have the power to ban MMJ businesses.
  • The state would license businesses including dispensaries, growers, processors and testing labs. In particular, the commerce department would license growers, processors and labs, while the board of pharmacy would license retail dispensaries.
  • The rulemaking process – which would determine the number of cannabis business licenses to be issued – must be finished a year after the bill goes into effect, which would be 90 days after the governor signs it.
  • Home grows would be prohibited.
  • Smoking MMJ would remain illegal, but lawmakers wanted to allow patients to use vaporizers, so dispensaries would be allowed to sell flower.
  • MMJ businesses would not be allowed within 500 feet of a school, church, library, playground or park.
  • There wouldn’t be a residency requirement for business ownership, but that could change during the rulemaking process.
  • At least 15% of MMJ business licenses issued would need to go to minority applicants, including African Americans, Native Americans, Hispanics or Asians – unless minority applicants don’t comprise that much of the licensing pool.

Some of the key points for entrepreneurs that would need need to be hammered out include details such as licensing fees, whether there would be a cap on business permits, the size and scope of commercial grow operations, and a host of other questions.

The bottom line at this point, according to Marshall: “If people are interested in getting into the business in Ohio, they need to pay attention to what the lawmakers are going to be doing in the next few months and watch how the process unfolds.”

Huffman, the GOP lawmaker, said the legislature retained the option to revisit the topic and change the rules if it thinks the agencies overseeing the program are being either too narrow or too open with, say, handing out business licenses.

“We tried to craft it in a business-friendly way,” Huffman said. “We did not preference large businesses or small businesses in any way. If they meet the criteria … they should be able to (get a license).”

John Schroyer can be reached at johns@mjbizdaily.com