The outlook for Ohio's medical cannabis market after rocky first week of sales

The first week of medical cannabis sales in Ohio have been marked by short supplies, limited selections and some disappointed patients left without access to nearby dispensaries. To an outsider, it may seem like an early stumble for a new market.

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I can say from my experience in other highly-regulated medical cannabis markets that Ohio is going to be just fine. In fact, it’s poised to be one of the largest U.S. medical cannabis markets and a precursor to further legalization in the Midwest states that have yet to legalize any form of cannabis use.

By the end of February, my company Grassroots Cannabis plans to open two dispensaries in Newark and Cuyahoga Falls under our Herbology brand. Nothing about the first week of sales in Ohio has us worried; in fact, every market has its growing pains and Ohio is very well-positioned for growth.

Ohio’s first week was textbook

On Ohio’s first day of medical cannabis sales, only four dispensaries opened their doors. For the seventh-largest state in the nation by population, that equates to a paltry one dispensary for approximately every 1,000 registered patients who suffer from one of the twenty-one approved medical conditions. Many patients are hundreds of miles from the nearest dispensary.

When patients make it to a dispensary, they are finding limited supplies of dried flower only and prices higher than neighboring Michigan. Perhaps the most unique aspect is the “Ohio tenth,” a “daily limit” prescribed by the state’s pharmacy board. The limit equates to 2.83 grams per dose, or a 90-day limit of eight ounces (the maximum amount to possess).

Many of the same issues have plagued the launch of almost every regulated cannabis market. But the issues are, in fact, to be expected.

Though patients have already had to wait since 2016 when medical cannabis was approved, the slow roll-out will better position the industry for success as awareness builds, more patients enroll in the program, and companies scale their operations. A phased roll-out will help to avoid major disruptions as witnessed in other new markets when cultivators and dispensaries have run out of inventory and been forced to close for weeks until the supply chain caught up.

Optimism for Buckeye patients

The learning curve for running a statewide regulated cannabis industry may frustrate anxious patients, but having a strong regulatory framework establishes the foundation for a safe, accessible and viable long-term program. These regulations ensure cannabis patients are not consuming pesticides, mold, or indeterminate levels of THC.

With 11.7 million people living in the state, there’s plenty of opportunity for the industry, especially as more cultivators, processors and retailers begin operating at full capacity this year. According to the 2018 Marijuana Business Factbook, Ohio’s medical cannabis retail sales will eclipse $300 million in the next few years.

Things will get better, not worse

One of the challenges of not having federally legalized medical cannabis is the varied regulations from state-to-state. As such, the supply chains and logistics operations must be tailored to each state’s regulations. Ohio’s industry will continue to improve with age. Product supply and options will increase, more dispensaries will open, and more patients will have access to the medical cannabis they need to manage their chronic and acute conditions.

There’s still work to be done. More physicians need to be certified to recommend medical cannabis to patients: just over 300 have registered thus far. More testing labs will be needed to handle the growing supply. And more dispensaries will be needed throughout the state to avoid cannabis deserts.

There’s no reason to think these conditions won’t be improved. Ohio’s medical cannabis industry is full of experienced operators from within the state and from neighboring states. It’s going to be a fast-growing market, and you’ll continue to hear more about it throughout 2019.

Matt Darin is co-founder and chief operating officer of Grassroots Cannabis, a multi-state cannabis company with operations in 10 states and growing. Darin has more than 15 years of experience as an entrepreneur and executive in the cannabis and commercial real estate industries.