COLUMBUS, Ohio (WCMH) — Medical marijuana license holders in Ohio issued a cautionary warning to state lawmakers on Tuesday: If the legislature’s plan to reform the industry succeeds, more Ohioans will flock to Michigan for cannabis.
Despite a slew of changes made to Senate Bill 9 amid license holders’ concerns, several dispensary owners, cultivators and processors of Ohio’s medical marijuana said during the bill’s sixth hearing at the Statehouse that the measure will “kill” an already oversaturated market.
But its sponsors say reform is needed — especially if the drug is legalized recreationally in November and a dueling, adult-use marijuana market emerges.
“The public needs to realize something,” Sen. Michael Rulli (R-Salem) said. “I know they think it’s really cute that adult-use is coming down the road, but without a separation on the calendar years, we will become the state up north. And it is a you-know-what-show – starts with an ‘S.’”
Rulli argued that among states like Michigan that have legalized both adult-use and medical marijuana, none have yet to achieve a stable relationship between the two markets, forcing the drug’s quality to decline, prices to skyrocket and products diverted to the black market.
“The disaster’s already coming” to Ohio, Rulli said, if the state’s medical program is not more tightly regulated before voters legalize adult-use marijuana.
That’s why Sens. Steve Huffman (R-Tipp City) and Kirk Schuring (R-Canton) are backing SB 9 to award more medical marijuana licenses, give cultivators more square footage to grow the plant and allow more people to qualify for the drug — all in hopes of lowering prices and attracting more patients to the program.
In March, the state’s Medical Marijuana Control Program recorded more than 355,000 registered patients, but only about 169,000 were actively using their registration, according to the program’s data. That’s a sign, Schuring said, that more Ohioans are traveling out of state for product.
Schuring and Huffman made a series of changes to the bill since its March iteration, including restoring regulatory oversight of the medical marijuana program to the Ohio Board of Pharmacy (instead of the originally proposed Department of Commerce), lowering patient registration fees and shrinking a proposed Division of Marijuana Control from 11 to 7 members to prevent “unruliness.”
To recruit more patients, SB 9 requires the Division of Marijuana Control to aim to have 1,000 patients per dispensary, facilitating more dispensary locations across the state. Once the total number of registered patients hits 300,000 — which Ohio has already surpassed — the DMC can add additional dispensaries on an as-needed basis.
“There’ll be more dispensaries, better access, and more product, lower prices. We think that should be good for Ohio, particularly as some others would like to go to the ballot now,” Schuring said in March.
But medical marijuana license holders remain steadfast in their opposition to SB 9, regardless of the recent changes. The dispensary-patient ratio proposed in SB 9 is unsustainable, they argued, as there are about 80 dispensaries in Ohio and more than 169,000 active patients – meaning each dispensary has about 2,100 patients – yet they still struggle to stay open.
Brent Evans, the owner of cannabis processor Ohio Green Systems, said when he first earned his medical marijuana license a few years ago, he bought cannabis biomass for about $350 to $400. Today – with a surplus of 150,000 pounds of medical marijuana in Ohio’s vaults – vendors are “begging” him to buy the product for $50 to $100.
“Something at that price point – I don’t care what cultivator you are, level 1 or level 2 – you can’t sustain what you’re currently doing, you can’t hire new people, you can’t maintain your employees and you certainly can’t do any additional expansion or find ways to help our patients in Ohio,” Evans said.
When Larry Pegram won a Level 1 cultivator license at the onset of Ohio’s medical marijuana program, he told lawmakers he spent $200,000 for the application alone and another $5 million to get his Springfield-based Pure Ohio Wellness up and running.
Today, Pegram said he has nearly $20 million in debt. That could be exacerbated by SB 9’s provisions that let too many cooks – in this case dispensaries – into the kitchen, he said.
“I took all the burden to build this out,” Pegram said. “Now, I’m told I’m selfish that I don’t want a bunch of other licenses given away.”
Huffman, however, said current license holders’ concerns about adding additional licenses is simply because “they don’t want the competition.”
“But that’s capitalism,” he said. “And part of the process is – more product, it will drive down the price.”
Huffman said he is aiming to solidify a final version of SB 9 this summer to nail down the medical program’s rules prior to Ohio voters fully legalizing the drug.