Ohio Marijuana Business

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What is the Demand for Marijuana in Ohio?

The demand for marijuana in Ohio has increased substantially since the legalization of medical cannabis. In April 2019, the state recorded about $5.2 million worth of marijuana sales. Cumulative medical marijuana sales total at the end of December 2019 was $56 million. Medical cannabis demand in 2020 continued to grow and in January, the state recorded $65.6 million in total historic medical marijuana sales. By December 2020, the cumulative total for medical marijuana sales had grown to $277.2 million. At the end of December 2021, Ohio had sold $658 million worth of cannabis at its medical dispensaries.

According to the medical marijuana sales data provided by the Ohio Department of Commerce, the state hit $1 billion in cannabis sales in September 2022, 41 months after legal medical marijuana sales commenced there. By the middle of May 2023, Ohio’s total revenue from medical marijuana sales stood at $1.3 billion. Overall, the state generated $32.9 million in taxes from medical marijuana sales in 2022. At the end of 2022, Ohio had generated $79.8 million in taxes from cannabis sales since the beginning of its medical marijuana program.

A published Ohio medical marijuana program update indicates that there are 355,368 registered patients and 34,629 caregivers at the end of March 2023.

How is Marijuana Taxed in Ohio?

Medical marijuana in Ohio is subject to a 5.75% sales tax. Local authorities are also permitted to collect cannabis sales tax. Local cannabis tax rates range between 0.25% to 2.25%. According to the provisions of HB 523, cannabis cultivation taxes apply in Ohio. The cultivation tax is based on the market value of the cannabis plant cultivated on a property. House Bill 523 does not state how Ohio will spend the tax revenues generated from marijuana sales. However, a proposed amendment to HB 523 suggests a 15% taxation of revenues generated at each stage of the medical marijuana supply chain. Per the amendment, the State Treasury will be credited with all cannabis-generated tax revenue that would be disbursed as follows:

  • 55% to a Municipal and Township Government Stabilization Fund for infrastructure development like bridge and road repair. It would also support public health and safety projects like medical services, fire, and police. This fund will be distributed to Ohio counties based on the amounts of revenue they generate.

  • 30% to a Strong County Fund for infrastructure upgrade, economic development, public health, and safety. Ohio municipalities would obtain this fund depending on their amount of marijuana tax revenue generation.

  • 15% to a Compassionate Care Fund for financing the Ohio Marijuana Control Commission's activities. The Commission's operations it would support include non-profit medical cannabis dispensaries, marijuana research, drug addiction prevention, and treatment.

What is the Agency Taxing Marijuana Businesses in Ohio?

The Ohio Department of Taxation is the state agency that enforces and administers local and state taxes, including cannabis sales and cultivation taxes. House Bill 523 authorizes the Department of Taxation to provide the Department of Commerce with tax information about any cannabis license applicant when required. The Department of Taxation is only open to visitors with pre-booked appointments. Taxpayers can book appointments with the Department of Taxation by calling 1 (800) 3211-304 between 8:00 a.m. and 5:00 p.m. on weekdays. Residents with pre-scheduled appointments can visit the Department at the following physical address:

Department of Taxation

30E Broad Street, 22nd Floor

Columbus, OH 43215

Residents can also make general tax-related inquiries with the Department of Taxation by calling 1 (800) 1780-282.

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Ohio Marijuana Business