Does Ohio Require a Marijuana Manufacturing License to Make Cannabis Products?
Yes. House Bill 523 prohibits Ohio residents from manufacturing cannabis-containing products without a marijuana processor license. As provided in the bill, the Ohio Department of Commerce regulates and licenses medical marijuana processors, cultivators, and testing facilities. Ohio has three different types of marijuana processors. These are vertically integrated facilities, standalone facilities, and plant-only processors. Plant-only processor licenses permit marijuana cultivators to sell marijuana plants to licensed dispensaries.
Does Ohio Require Licensed Cannabis Manufacturers to Have Cultivation Licenses?
No. Cannabis processors in Ohio are not mandated to have cultivation licenses. According to Title 37, Chapter 3796 of the Ohio Revised Code, licensed cannabis processors can purchase marijuana plants from licensed growers. They can also deliver or sell to licensed medical marijuana dispensaries within the state. However, Chapter 3796 of the Revised Code does not permit licensed cannabis processors to purchase cannabis from other manufacturers.
How Does Ohio Classify Marijuana Manufacturing Licenses?
Cannabis manufacturing licenses in Ohio are classified depending on whether or not a processor holds other licenses types (cultivator and dispensary licenses). While standalone processors have only processor licenses, plant-only processors and vertically integrated facilities have other types of medical marijuana licenses.
What are the Different Types of Cannabis Manufacturing Licenses in Ohio?
The various types of cannabis manufacturing (processor) licenses in Ohio are:
- Vertically integrated facilities: These facilities control the different stages of marijuana product manufacturing and delivery to end-users (seed to sale). Owners of vertically integrated marijuana facilities hold cultivator, processor, and dispensary licenses. They cultivate marijuana plants, process marijuana-infused products, distribute to licensed medical cannabis dispensaries and sell to final consumers (qualifying patients).
- Standalone facilities: These facilities focus solely on medical marijuana production. They purchase marijuana plants from licensed cultivators, manufacture cannabis-infused products, and sell only to licensed medical dispensaries.
- Plant-only processors: These are licensed cannabis cultivators that package and distribute marijuana plants directly to licensed retail dispensaries.
Does Ohio Require a Separate License to Manufacture Edibles?
No. Cannabis processors in Ohio do not require separate licenses to manufacture edibles. According to Section 3796.06 of the Ohio Revised Code, marijuana processor license holders can process plant materials and edibles, oils, tinctures, and patches containing cannabis. However, when manufacturing edibles, processors must comply with the food manufacturing standards as contained in Chapter 901:3-1 of the Ohio Administrative Code.
Ohio prohibits the smoking of medical cannabis. Hence, licensed marijuana processors are restricted from processing marijuana in any form that allows combustion. However, processors can make vaporizable forms of marijuana. Section 3796.061 of the Ohio Revised Code permits licensees to file petitions with the Ohio Board of Pharmacy requesting approval to manufacture other forms of cannabis. However, the Board can choose to approve or deny such petitions.
How to Get a Cannabis Manufacturing License in Ohio
As stipulated in Rule 3796:3-1-03 of the Ohio Administrative Code, the Ohio Department of Commerce collects and reviews cannabis processor applications. Alternatively, they may hire an independent contractor or check the applications together with the contractor. Per Rule 3796:3-1-02 of the Ohio Administrative Code, the Department must establish open periods for cannabis processor applications. It publishes public notices announcing the dates and times that prospective licensees can commence applications. The Department has the right to amend notices or cancel open application periods. However, it must publish any notice amendment through the same platform as the original notification.
According to Rule 3796:3-1-03 of the Ohio Administrative Code, for an applicant to be considered for a processor license, they must:
- Show written certification that they (applicant), board members, administrators, employees, agents, and other individuals that will control the prospective facility’s activities do hot have:
- Convictions for any disqualifying offense as stated in Rule 3796:1-1-01 of the Ohio Administrative Code. They must have no previous abandoned applications (due to failure to fulfill the minimum requirements) for any type of medical cannabis facility. Also, applications from persons convicted of adulterating medical marijuana (mixing it with unhealthy substances or intentionally reducing its potency) will be denied.
- Certificate to recommend medical cannabis to patients according to the provisions of Title 47, Chapter 4731 of the Ohio Revised Code.
- Provide documentation showing that the applicant has sufficient capital to fulfill the financial responsibility criteria stated in Rule 3796:3-1-05 of the O.A.C. The applicant will be required to pay the amount indicated in the proof of financial responsibility if they:
- Provide proof that the proposed processing establishment’s location is not within 500 feet of schools, public libraries, daycare centers, and public parks. Rule 3796:5-5-01 of the Ohio Administrative Code defines the measurement criteria of cannabis facility distance from public spaces.
- Provide evidence that there is no law limiting medical cannabis manufacture in the local jurisdiction where the facility will be situated.
- Provide certification that the applicant, board members, administrators, employees, and other persons who will control the facility do not own cannabis testing laboratories
- Provide proof that they comply with state and local government tax laws
- Pay an application fee in line with the provisions of Rule 3796:5-1-01 of the Ohio Administrative Code
Per Rule 3796:3-1-02 of the Ohio Administrative Code, a cannabis processor applicant should submit the following:
- Business plan - The business plan should include the applicant’s name, prospective physical address of the processor facility, confirmation of business entity registration, and a letter of good standing from the Ohio Secretary of State. Also, it should show the proposed facility’s organizational chart and the applicant’s experience in the manufacture of medical cannabis or other agricultural products.
- Operations plan - This plan must establish the proposed facility’s procedures and policies to ensure the proper processing of medical cannabis in a safe, secure and sustainable manner. It must state the techniques for processing and extracting medical marijuana components, list all products the prospective facility will manufacture, and their estimated cannabinoid contents. It should also show the safety standards, facility specifications, and proof that the processor will operate by the provisions of Chapter 3796 of the Ohio Revised Code.
- Quality assurance plan - This plan should show the prospective processor’s procedures and policies for a secure and consistent cannabis supply. It must state the inventory control plan, labeling, and packaging plans, as provided in Section 3796.03 of the Ohio Revised Code. In addition, waste disposal plans and retrieval procedures (in case of expiration or contamination) must be stated.
- Security plan - This plan shows the policies and measures to protect facility personnel and prevent loss, theft, or diversion of medical cannabis from the processor. It should include the facility’s record keeping plans, security plans, and transportation plans according to rules 3796:2-2-08, 3796:3-2-05, and 3796:5-3-01, respectively, of the Ohio Administrative Code.
- Financial plan - This should indicate the names of all persons, partners, associations, and other entities with a direct or indirect financial interest in the proposed marijuana facility. It should also state the business’s funding sources and anticipated cost of establishing and operating the processor facility.
- Criminal background checks of the applicant and the proposed facility’s board members as stipulated in Section 3796.12 of the Ohio Revised Code. The checks must be from the FBI (Federal Bureau of Investigation) and the Ohio Bureau of. Criminal Investigation
- Evidence of any instance where the applicant managed a business and was fined, convicted, or suspended in a judicial or administrative proceeding
- Proof that the applicant has a lease or owns the property where the facility will be situated. The property agreement must not have any usage limitation hindering the operation of a marijuana processor facility according to the provisions of Chapter 3796 of the Ohio Revised Code.
- Location area map of the proposed facility’s surroundings, proving it is not within 500 feet of public spaces (schools, public housing, public parks, and public libraries)
- Documentation proving that the proposed processor facility complies with the local zoning statutes and ordinances of the jurisdiction where the facility will be situated. The applicant must obtain approval from the county building department.
- The applicant’s federal and state tax payment records. Also, individuals having up to a 1% share of the proposed facility must submit their tax payment records for the five years preceding the application date.
- Proof that the applicant can fulfill the processor financial responsibility requirements in Rule 3796:3-1-05 of the Ohio Administrative Code. The Department of Commerce accepts signed statements from licensed public accountants issued within thirty days of the application submission. It considers the following amounts of liquid assets to be sufficient for processor applications:
- $250,000 for processor facility provisional licenses
- $100,000 for provisional processor licenses if the applicant has a cannabis cultivator license. However, they must establish their processor facilities in the same locations as their cultivator establishments.
- Non-refundable license application fee of $10,000. Applicants should pay these fees via money orders or checks payable to the Ohio Treasurer of State.
If an applicant has cannabis cultivation, testing, production, transportation, or dispensary license in another state, they must submit:
- A copy of the licensing document issued by the other state
- A written statement permitting the Department of Commerce to contact the previous licensing agency and verify the information the applicant supplied
- Copies of documents indicating sanctions (if any) imposed on the applicant by the other state’s licensing agency. The applicant may provide a statement declaring that the previous agency never sanctioned them.
Applicants should submit their applications and the applicable fees either in person or through representatives before the open application periods elapse. Applicants can forward their applications to the Department of Commerce’s Medical Marijuana Control Program at:
Ohio Department of Commerce
Vern Riffe Center
77 South High Street, 23rd Floor
Columbus, OH 43215
The Department of Commerce issues provisional manufacturing licenses to successful applicants. Licensees can obtain their certificates of operation after paying the certificate of operation fee. Generally, the Department of Commerce ranks and selects applications using an unbiased numerical process based on their review criteria. The Department can exclude any application from consideration during the review process if an applicant fails to provide the required information. Also, if an application does not provide all the data in line with Rule 3796:3-1-02 of the Ohio Administrative Code, it will be exempted from review. Applicants must not include any misleading information during their applications.
How Much Does a Cannabis Manufacturing License Cost in Ohio?
According to fee schedules in Rule 3796:5-1-01 of the Ohio Administrative Code, the following fees apply when obtaining and renewing cannabis processor licenses in Ohio:
- $10,000 non-refundable processor application fee
- $90,000 non-refundable certificate of operation fee
- $100,000 non-refundable certificate of operation annual renewal fee
- $100 non-refundable employee identification card fee for each employee of a marijuana processing facility
- $100 non-refundable employee identification card renewal fee. The employee identification card is valid for two years.