How to Open a Dispensary in Ohio

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How to Open a Dispensary in Ohio in 2024

Businesses planning to open cannabis dispensaries in Ohio must get dispensary licenses from the Ohio Board of Pharmacy in order to operate legally in the state. Dispensary license applications must include business plans, site and facility plans, and operations plans. The Ohio Board of Pharmacy issues an initial provisional license and, afterwards, a certificate of operation to each successful applicant.

Why Open a Dispensary in Ohio?

While recreational marijuana remains illegal in Ohio, the state generates a high demand for medical cannabis products. To meet rapidly rising demand for medical marijuana, the Ohio Board of Pharmacy raised the number of cannabis licenses from 57 to 130 in 2021. This created room for new entrants in the state’s cannabis industry.

According to data from a cannabis program update released by the Ohio Medical Marijuana Control Program, the state had generated a cumulative total of $1.48 billion in cannabis sales between 2019, when the first cannabis dispensaries began operation, and September 2023. There are over 369,000 registered medical marijuana patients in Ohio. The number of licensed cannabis dispensaries currently operating in the state is 104.

Types of Dispensary Licenses in Ohio

Ohio issues only one type of dispensary license. The state’s Board of Pharmacy issues a Certificate of Operation to successful dispensary applicants.

How to Get an Ohio Dispensary License

Individuals or business entities interested in obtaining dispensary licenses in Ohio must submit their applications by electronic means when the Ohio Board of Pharmacy announces the opening window on its website. The following steps must be taken:

• Pay the license application fee
• Submit the electronic application form (available during the application window)

All individuals with an ownership stake or who can exercise operational influence with the dispensary must be listed as "Prospective Associated Key Employees" on the application. The Ohio Board of Pharmacy is the state agency responsible for issuing dispensary licenses in the state. The last application window for new dispensary licenses closed in November 2022. State law sets a limit of 130 dispensary licenses; there are currently 104 licensed marijuana dispensaries in the state.

Information and Documents Required for a Dispensary License in Ohio

• Applicant's state-issued ID, phone number, email address, and legal address
• The legal address of the proposed cannabis retail store
• A notarized statement from the owner of a proposed dispensary facility, giving consent to its use as a cannabis dispensary
• Copy of business incorporation/registration documents
• Bank statements dated no earlier than 30 days prior to application filing
• Tax authorization form
• Organizational structure of the proposed dispensary
• Zoning compliance forms
• Release and Attestation form
• Trade secret form
• Ohio Secretary of State registration
• Local ordinance compliance documents
• Dispensary construction/renovation plan

What Plans Do You Need to Dispensary in Ohio?

It is vital for a prospective dispensary owner to prepare a business plan that will outline their strategy for take-off and growth. Under Ohio rules, cannabis dispensary applicants must submit business plans outlining the following:

• Applicant's business record and experience
• Details of the proposed dispensary location
• Details of the product inventory
• Sources of business funding and financial projections
• Proof of adherence to state and municipal regulations

Ohio dispensary license applicants are also required to submit site and facility plans. Site plans are expected to show the following:

• Construction and renovation plans for the cannabis dispensary
• Evidence of compliance with municipal zoning ordinances
• A map showing that the dispensary is sited at least 500 feet away from schools, churches, public parks, public libraries, playgrounds, and other prohibited premises
• Storage areas for marijuana products and other restricted areas
• Parking area
• Dispensary area
• Patient consultation area

An operations plan is also required from a dispensary license applicant. It should contain specific details about the following:

• Security measures and surveillance systems
• Cannabis inventory management
• Employee training and education
• Anti-diversion plan for cannabis products
• Recordkeeping methods
• Employee job descriptions

Are There Municipal Requirements for Opening a Dispensary in Ohio?

Yes. Per House Bill 523, municipalities in Ohio are allowed to refuse the operation of cannabis dispensaries in their localities. Not all municipalities in the state have agreed to allow cannabis-related businesses to establish marijuana facilities. It is vital for prospective cannabis dispensary owners to confirm beforehand which Ohio municipalities have opted to permit cannabis businesses, including marijuana dispensaries, in their locality.

How Long Does It Take to Get an Ohio Dispensary License?

Applicants who satisfy the initial requirements for a dispensary license in Ohio are issued provisional licenses. After six months, the Ohio Board of Pharmacy will determine if the licensee has adhered fully to the regulations and then issue a final Certificate of Operation.

Where Can You Locate a Cannabis Dispensary in Ohio?

Cannabis dispensaries in Ohio can only be located on the premises approved by the Ohio Board of Pharmacy and municipal authorities. Per Ohio cannabis law, no dispensary shall be located within 500 feet of the following establishments:

• A public park or playground
• A school
• A public library
• A community addiction services facility
• A church or other religious worship center

Can Licensees Have More Than One Dispensary Location in Ohio?

Yes. Ohio cannabis dispensary licensees are allowed to operate multiple dispensary locations. However, according to HB 523, each dispensary location must have its own Certificate of Operation.

How Much Does It Cost to Open a Marijuana Dispensary in Ohio?

A prospective dispensary owner in Ohio will incur costs related to the following expenses when starting operations:

• License Application Fee: $5,000
• License Fee: $80,000
• Contingency Funds: $250,000
• Employee Registration Fee: Ranging between $100 and $500 for each employee
• Major Modification or Renovation Fee: $5,000
• Relocation Fee: $5,000
• Employee Salaries: The average wage for a cannabis dispensary employee in Ohio is $18 per hour
• Construction Costs: It will cost between $350,000 to $1 million to build a cannabis dispensary from scratch, depending on the size of the structure
• Inventory: It costs upwards of $100,000 monthly to stock up on cannabis products

Do You Need an Insurance Policy for a Cannabis Dispensary in Ohio?

No, Ohio does not require cannabis dispensaries to maintain insurance policies. However, having certain insurance policies is beneficial in the long term for dispensary owners. The following are some of the insurance options open to cannabis dispensaries in Ohio:

• Product Liability Insurance: This will provide coverage for a dispensary if claims of physical injury or damage are brought by customers who have consumed marijuana products purchased from the dispensary
• General Liability Insurance: This type of policy will cover legal and medical costs associated with any property damage or bodily harm incurred by dispensary customers and visitors
• Cyber Liability Insurance: This policy provides coverage if a dispensary falls prey to a cyber attack or data breach. Cyber liability insurance will help offset costs associated with financial losses and criminal investigations
• D & O Insurance: Directors and Officers Insurance provides coverage if a dispensary's investors or shareholders file lawsuits against the dispensary owners
• Commercial Property Insurance: This policy provides compensation in the event of damage to a dispensary property or a loss of its inventory as a result of fire or other covered risks. Compensation will cover the costs of renovation and repairs

How to Get a Grant to Open a Dispensary in Ohio

Establishing a cannabis dispensary in Ohio is capital-intensive because of the state's steep license fees and other funding requirements. Prospective dispensary owners in the state can consider some of the following options to raise funds while opening their dispensaries:

• Self Financing: Individuals with adequate personal savings can finance the start-up costs of their dispensaries
• Family and Friends: It is also possible to raise funding for a cannabis dispensary by asking for loans from family and friends
• Lines of Credit: This funding method allows dispensaries to access capital up to an agreed limit. Lines of credit differ from conventional loans because the dispensary business can raise funds repeatedly over a certain period
• Cannabis Business Loans: Prospective dispensary owners can approach cannabis-specific lenders for capital to finance their dispensary businesses. Such capital can come in the form of working capital loans or bridge loans

Does Ohio Have a Social Equity Program for Cannabis Dispensaries?

No, Ohio does not run a social equity program for cannabis dispensaries or any other cannabis businesses.

Does Ohio Tax Marijuana Dispensaries?

Yes, cannabis dispensaries in Ohio are mandated to charge a 5.75% sales tax on customers’ marijuana purchases and remit it to the Ohio Department of Commerce. Municipal authorities are also permitted under Iowa law to charge a sales tax to dispensaries located within their boundaries. Municipal sales tax rates range between 0.25% to 2.25%.