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. This number went up to about $8 million in May and $11.5 million in June 2019. In July that year, sales figures grew by over 45% to $16.7 million. Cannabis sales increased further to $21.9 million, $29.7 million, 35.2 million, $45.2 million, and $56 million in August, September, October, November, and December 2019, respectively.

Medical cannabis demand in 2020 showed a similar upward trend. In January, the state recorded $65.6 million in marijuana sales. This amount increased by 15.5% in February to $75.8 million. Sales figures increased further to $91.7 million, $106 million, $121 million, and $142 million in March, April, May, and June, respectively. In the second half of 2020, sales grew by 71.8%, from $161.3 million in July to $277.2 million in December. The year 2021 was no different, as sales increased from $307.7 million in January to $331.8 million in February. Furthermore, Ohio made $360.3 million from cannabis sales in March 2021 and over $389.5 million in April. The state recorded further growth in marijuana sales from $426.8 million in May to $455.8 million in June. As of July 12, 2021, Ohio had marijuana sales of over $471.1 million (from 3,449,381 sales transactions), the highest since medical marijuana legalization.

According to medical marijuana sales data by the Ohio Department of Commerce, the number of cannabis-sale transactions has increased steadily since 2019. The report showed that there were 36,700 sales receipts from cannabis transactions in April 2019. This number increased by over 11 times to 434,000 sales transactions in December 2019. The demand for cannabis was higher the following year as the number of sales receipts rose to over 2 million by December 2020. In 2021, cannabis sales transactions increased from about 2.2 million in January to 2.4 million in February and 2.6 million in March. There were over 2.8 million cannabis sales receipts in April 2021 and more than 3.1 million and 3.3 million in May and June, respectively.

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 0.75% 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 Ohio Department of Taxation?

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.