Does Ohio Require Marijuana Growers to Obtain Cultivation License?
Yes. According to the provisions of House Bill 523, medical marijuana growers must obtain cultivation licenses before they can operate legally in Ohio. House Bill 523 was approved in June 2016 after Governor John Kasich signed it into law. The bill authorizes three state agencies to administer the state’s Medical Marijuana Control Program. The Ohio Department of Commerce issues licenses to medical cannabis cultivators, manufacturers, and testing laboratories.
House Bill 523 prohibits medical marijuana growers from cultivating cannabis on any public land or within 500 feet of a public library, school, daycare center, public park, church, or public playground. Licensed marijuana growers are permitted to grow cannabis and sell or deliver it to processors within the state. However, the provisions of House Bill 523 restrict them from growing cannabis for personal use. In addition, Title 37, Chapter 3796 of the Ohio Revised Code, authorizes the Department of Commerce to issue cannabis cultivation licenses based on the number of qualifying patients applying for marijuana cards. The Department also considers the total Ohio population when issuing cultivator licenses.
What Are the Different Types of Cultivation Licenses in Ohio?
The Ohio Department of Commerce issues two types of cultivation licenses to applicants under the state’s Medical Marijuana Control Program. These are:
- Level I cultivator licenses: Holders of level I cannabis cultivator licenses are authorized to grow marijuana on a maximum cultivation area of 25,000 square feet
- Level II cultivator licenses: Level II marijuana cultivators are authorized to grow cannabis on an initial cultivation area spanning 3,000 square feet
However, both level I and level II cultivators can apply for an expansion (allowing them to grow cannabis on a larger cultivation area) with the Department of Commerce. Medical marijuana cultivation licenses are valid for one year. Hence, licensees must renew their licenses annually.
Who Can Grow Marijuana in Ohio?
Although medical marijuana is legal in Ohio, only licensed cannabis cultivators can grow marijuana plants legally. To qualify for a marijuana cultivation license in Ohio, an applicant must be at least 21 years old. According to Section 4776.04 of the Ohio Revised Code, prospective employees of cannabis farms must consent to criminality checks. They must be at least 21 years old and obtain identification cards from the Department of Commerce before working in a marijuana cultivation facility. Also, per Section 3796.13 of the Ohio Revised Code, convicted felons are prohibited from working on cannabis cultivation facilities in Ohio.
How to Get a Marijuana Cultivation License in Ohio
Prospective medical marijuana growers in Ohio can apply for licenses with the Ohio Department of Commerce. The provisions of Chapter 3796:2-1 of the Ohio Administrative Code authorizes the Department to establish application periods. The Department must notify the public in advance about the times and dates when they will start accepting applications. However, the Ohio Department of Commerce Director reserves the right to amend the application notice before the submission deadline. The Director may also cancel an application notice before the scheduled period begins.
All applications must be in line with the provisions of Chapter 3796 of the Ohio Revised Code. Generally, for both level I and level II cultivator licenses, applicants must submit the following to the Ohio Department of Commerce:
- A non-refundable license application fee as stipulated in Rule 3796:5-1-01 of the Ohio Administrative Code. Level I cultivator license applicants must pay $20,000, while level II applicants pay $2,000 as application fees. They can make payments via either money orders or certified checks payable to the Ohio Treasurer of State.
- A business plan: This is required to provide information on an applicant’s business experience and their ability to manage the proposed cultivation facility. It should state the business entity type, proof of registration with the Ohio Secretary of State, proposed facility location, and personal details about the applicant and other key employees of the facility.
- Operations plan - This section should provide information about the proposed production schedule, product timeline, cultivation method, and an applicant’s experience in agriculture. The operations plan must also show the proposed business’s policies and measures to ensure the safety, security, and sustainability of the medical cannabis cultivation process.
- Quality assurance plan - It should state the proposed facility’s labeling and packaging plans to ensure it complies with Chapter 3796:8-2 of the Ohio Administrative Code. The quality assurance plan should describe the proposed facility’s measures to ensure a safe and uninterrupted supply of medical cannabis. It should include the inventory control plan, packaging plan, and the facility’s recall procedures in the event of product expiration or contamination.
- Security plan - This should describe the applicant’s measures to prevent theft of medical marijuana, diversion of products, and protect facility staff. It must include the facility’s security alarm system, record-keeping plans, transportation plan, and plot plan illustrating the various areas of the establishment and places with restricted access.
- Financial plan - The financial plan should show the licensee’s financial ability to operate the cultivation facility. It should break down the anticipated running costs of the cultivation and funding sources. Also, the plan should prove that the applicant can comply with the financial responsibility requirements as stipulated in Rule 3796:2-1-05 of the Ohio Administrative Code.
- Proof that the prospective licensee either owns or obtained a lease of the property where the business will be situated. The property lease or ownership document must not have any use limitations that may restrict the applicant from running their cannabis cultivation facility.
- A location map of the area around the proposed cannabis cultivation facility, proving that it is at least 500 feet away from public parks, schools, and other public spaces as stipulated in Rule 3796:5-5-01 of the O.A.C. Maps such as satellite images and street maps are acceptable. Also, applicants must clearly label their maps to fulfill this requirement.
- Documentation proving that the applicant has sufficient funds under the proposed establishment’s control for operating the facility. For level I cultivator licenses, the minimum amount required is $500,000, while at least $50,000 is required for level II cultivator licenses. The Ohio Department of Commerce accepts signed statements attesting to the fund's availability from licensed, certified public accountants within the state. Note that the accountant must issue the report within the thirty days preceding the license application date.
- The applicant’s tax payment records three years before the application date. The Department of Commerce may also request the tax payment history of each individual or entity with over 1% ownership in the proposed cultivation facility.
- Proof of criminal background checks of the applicant and each board member of the proposed marijuana cultivation facility in line with the provisions of Section 3796.12 of the Ohio Revised Code. Each person subject to the check must submit a Federal Bureau of Investigation (FBI) and Ohio Bureau of Criminal Identification and Investigation criminal record check.
- Details (if any) of instances where the applicant or any board member of the proposed facility was convicted or penalized in an administrative or judicial hearing
- A copy of a previous license if the applicant holds a current or previous marijuana license in another state. The applicant must also issue a statement permitting the Department of Commerce to contact the former licensing authority to verify such information.
- Any other information that the Department of Commerce requests from prospective licensees during the application
Applicants must hand-deliver all required documentation and application fees either in person or through a representative to the Medical Marijuana Control Program of the Ohio Department of Commerce at:
Ohio Department of Commerce
Vern Riffe Center
77 South High Street, 23rd Floor
Columbus, OH 43215
Once a license application is approved, the applicant will be issued a provisional level I or level II license, depending on their application type. They can obtain their certificate of operation after paying the applicable fee to the Department of Commerce. Marijuana cultivators must obtain plant-only processor licenses before packaging cannabis plants and distributing them directly to state-licensed dispensaries. Usually, the Department announces the application procedures for plant-only processor licenses to all cultivators.
How Much Do Marijuana Cultivation Licenses Cost in Ohio?
According to the provisions of Rule 3796:5-1-01 of the Ohio Administrative Code, the costs of obtaining medical marijuana cultivation licenses in Ohio differ depending on the license type. The cost implications are:
- Level I cultivator license: A non-refundable $20,000 application fee
- Level II cultivator license: A non-refundable $2,000 application fee
Once the Department of Commerce approves a license application, the prospective licensee must pay the following fee before obtaining their certificate of operation:
- $180,000 certificate of operation fee for level I cultivator licenses
- $18,000 certificate of operation fee for level II cultivator licenses
For annual renewal, licensees must pay the following fees:
- $200,000 certificate of operation renewal fees for level I cultivator licenses
- $20,000 certificate of operation renewal fees for level II cultivator licenses
A $100 fee applies for each marijuana cultivation employee identification card issued by the Department of Commerce for level I and level II cultivation facilities. The employee identification cards must be renewed every two years, and a $100 non-refundable fee applies for each card renewal.
Medical marijuana cultivators with plant-only processor licenses must pay the following additional fees depending on their cultivator license type:
- Level I cultivator: $5,000 when the plant-only processor license is approved and $5,000 for annual renewal of the license
- Level II cultivator: $500 when the plant-only processor license is approved and $500 for annual renewal
Can Licensed Marijuana Cultivators Hold Other Cannabis Licenses in Ohio?
Per Rule 3796:2-1-02 of the Ohio Administrative Code, persons who apply for level I cultivator licenses are restricted from applying for level II licenses. Similarly, if a person applies for a level II license, they cannot apply for a level I license. Also, as stipulated in Section 3796.09 of the Ohio Revised Code, cultivation licensees cannot hold cannabis laboratory testing licenses. They are also prohibited from investing in cannabis testing laboratory businesses.