Prospective medical marijuana cultivators now know what Ohio rules for getting growers’ licenses looks like. They were finalized last Monday and application forms were released Friday.
Ohio’s medical marijuana law allows people with 21 medical conditions, including cancer, Alzheimer’s disease, HIV/AIDS and epilepsy, to purchase and use marijuana after getting a doctor’s recommendation. The law doesn’t allow smoking.
The issue to watch is whether certain regulations will curb the program’s ability to get an adequate supply of medical cannabis to patients. Regulators say the rules balance access with public safety and can be revisited later.
“The most genuine answer that anyone can give about Ohio’s program is that this has never been done before, so we don’t know if it will work, or serve patients,” said Dr. Jahan Marcu, chief science officer at Americans for Safe Access. “So patients will just have to wait and see.”
A look at several key issues that have arisen on the cultivation front:
Ohio has set some of the highest licensing fees in the country. Larger growers must pay a $20,000 application fee and a $180,000 license fee. Smaller grow operations must pay $2,000 to apply and an $18,000 license fee. Annual renewal fees are equally hefty.
Up to 24 licenses — 12 for large growers, 12 for small growers — will be made available, with some growers and patient advocates raising concerns that the total 336,000 square feet available won’t be enough to produce an adequate crop. Estimates of the Ohio patient population vary widely, from 185,000 to 325,000 people.
Missy Craddock, of the Ohio Medical Marijuana Control Program, recently told a state advisory board the high financial bar will assure participating growers think seriously about the financial commitment before entering the field. Regulators add industry experts and other states were consulted.
Jimmy Gould, a key funder of Ohio’s failed 2015 medical marijuana ballot measure, said he’s confident the licenses will allow for an ample cannabis crop.
“You don’t want so many cultivators and so few patients that everyone goes out of business, which happened in Illinois and Arizona,” he said.
FINDING FINANCIAL FOOTING
Besides the licensing issue, potential growers must find banks and insurers willing to service their businesses.
It’s been a challenge elsewhere, as national companies have steered clear of dealing with a business product that the federal government still considers illegal.
Kelly Mottola, owner of Hydro Innovations in Dublin, is preparing to apply for a small grower license. She said the Ohio Department of Insurance has told her the type of insurance policy that’s required doesn’t exist. Ohio Department of Commerce spokeswoman Kerry Francis said rule language was changed to address this concern.
Gould’s Green Light Acquisitions LLC is working to develop a “captive insurance” product that other growers could eventual join, Gould said. It’s not clear the company’s offering can be ready in time to meet other growers’ application deadlines.
Peter Murphy, a Pennsylvania-based lawyer who specializes in regulated substances law, said the closed-loop payment system being pioneered in Ohio could resolve most of the banking issues faced in other states.
MEETING THE TESTING REQUIREMENT
Ohio’s medical marijuana law requires mandatory marijuana testing to be done by an in-state, public university. The problem is not one has said for sure yet if it will participate.
The largest, Ohio State University, had not made a decision as of last week on whether it would conduct the testing. Others, including Kent State University and the University of Cincinnati, say they have no plans to become testers.
Marcu said Ohio is following in the footsteps of other states that have insisted on creating their medical marijuana programs from scratch, and it’s usually led to delays. He cited Maryland, New Jersey, New York and the District of Columbia as examples.
“This could be a really good program for patients, or it could be just another group of regulators trying to reinvent the wheel,” he said.
He said public universities risk losing their federal drug-testing certifications if they delve into a substance — marijuana — that is deemed illegal under federal law.
Francis said, “We are aware of the concerns and will develop a plan to ensure that medical marijuana is tested.” If universities beg off, Gould said state lawmakers could revisit the law passed last year to give third-party testers a shot.