Ohioans will soon learn if a medical marijuana shop will open in their community.
In the next month, the state is expected to award licenses to up to 60 dispensaries that will be the first in Ohio allowed to sell cannabis-based products.
In Southwest Ohio, dozens of start-ups are vying for a chance to sell the newly legal drug.
In Hartwell, Rev. Damon Lynch III has filed an application with the state to turn a former pharmacy on Vine Street into a dispensary under the business name Have a Heart Cincy. In Camp Washington, the founders of Over-the-Rhine-based Rhinegeist hope to put a dispensary on a portion of property they’re redeveloping along Spring Grove Avenue.
Timing for the licensing announcement is critical: Ohio faces a Sept. 8 deadline to have its medical marijuana program up and running.
That means businesses waiting for a green light from the state will have less than six months launch their new ventures in order to be ready by September.
“We’re deeply concerned,” said James Gould of Downtown-based CannAscend, which submitted five dispensary applications. “Lots of jobs are at stake. Lots of investment capital…. The biggest concern I have is whether this business can work in Ohio.”
All told, more than 200 firms submitted dispensary applications to Ohio’s Board of Pharmacy, which will regulate the businesses. Ohio has set strict rules for how many dispensaries can open in certain parts of the state.
Hamilton County, for example, will make up a newly created Southwest Ohio District 1, where up to three dispensaries can operate. Warren, Clinton and Clermont counties make up Southwest District 5. Across all three counties just one dispensary will be allowed to open.
As the new program has rolled out, dozens of communities have taken steps to temporarily block or ban pot-related businesses from opening.
Locally, Blue Ash, Colerain Township, Fairfield, Hamilton, Liberty Township, Sharonville and West Chester Township all have rules blocking marijuana-related businesses in their areas.
The law also bans marijuana businesses from being within 500 feet of schools, playgrounds, public libraries and churches.
For now, Ohio’s pharmacy board has said it will award the licenses some time this spring, but it hasn’t set a firm date for the announcement.
“We don’t have a specific timeframe,” said Cameron McNamee, a spokesman for the board. “We want to make sure we score everything appropriately.”
Legal threats and concerns have been mounting over the state’s rollout of its medical pot program. In the last month a lawsuit has been filed and an audit launched that each call into question the validity of the state’s process for awarding business licenses to medical marijuana growers.
“We’ve seen so many problems with so many other states, I would have thought that by now (Ohio) would have learned from all of that,” said CannAscend’s Gould.
Tracking and paying for legal marijuana
Ohio is spending more than $6 million on a sophisticated system that regulators say will track every medical marijuana plant grown by state-licensed cultivators from seed to sale.
Florida-based Metrc is crafting the tracking system. It’s the same firm that created Colorado’s tracking program, which the state unveiled in late 2013. Ohio regulators have said fees paid by medical marijuana-related businesses operating in the state will cover the $6 million price tag for the system.
Meanwhile, regulators are still mapping out details for what they call a “closed loop payment system” that they hope will eliminate big risks many legal marijuana businesses face.
Because the drug is still illegal federally, most banks and financial firms refuse to service the new industry. That forces most businesses to operate on an all-cash basis, making the operations a target for criminals.
Ohio’s proposed payment system would work similarly to a prepaid debit card, officials have said. Businesses could use it as they exchange services with each other and patients would use it buy their medical cannabis products. The system would also help regulators better track financial transactions.
Also key: How much will patients pay for medical marijuana?
Ohio has some of the priciest fees in the country for businesses vying to get into the medical cannabis market. Application fees for growing, processing, testing and selling the drug range from $3,000 to $20,000. Those who win the right to launch a business face annual renewal fees of $18,000 to as much at $180,000.
Those costs will no doubt get passed onto patients, said Chris Lindsey, a senior policy analyst with the Marijuana Policy Project in D.C.
“The question is, how costly will (these fees) make it for patients,” he said. “There’s going to be a lot of pressure to make sure it’s not absurdly expensive.”