Ohio's marijuana sales are expected to hit a whopping $1.65 billion by 2027. This growth reflects the increasing acceptance and demand for cannabis products and makes Ohio a promising location for entrepreneurs looking to enter the cannabis industry.

Starting a cannabis dispensary here offers plenty of opportunities but also comes with its fair share of challenges. You’ll need to navigate a complex landscape, including understanding rapidly changing regulations and completing the licensing process.

Keep reading to uncover everything you need to know about launching your dispensary legally and successfully in Ohio.

Overview of Cannabis Laws in Ohio

Ohio became the 24th state to fully legalize cannabis, after first approving medical marijuana in 2016. The state established clear responsibilities for three key departments:

• The Department of Commerce: Handles the cultivators, processors, and testing laboratories.
• The Board of Pharmacy: Manages the patient and caregiver registry while issuing licenses for retail dispensaries.
• The State Medical Board: Certifies physicians to recommend medical marijuana to eligible patients.

Moreover, residents who wish to use marijuana for medical purposes must meet these requirements:

• Be at least 18 years old.
• Be an Ohio resident.
• Have a qualifying condition such as Alzheimer’s, AIDS/HIV,  epilepsy, Huntington’s disease, cancer, or any other condition approved by the medical board.

In 2023, Ohio took another step forward during the election when Issue 2 was passed, thanks to the efforts of the Coalition to Regulate Marijuana Like Alcohol. With its approval, adults aged 21 and older can now legally use recreational marijuana in the state.

We’ve also mentioned Ohio's new adult-use purchase and possession limits below:

• Possession: Up to 2.5 ounces of marijuana or 15 grams of marijuana extract.
• Home Cultivation: Up to six marijuana plants per person and 12 plants per household.

Understand State’s Compliance Regulations

As of 2024, the Division of Cannabis Control (DCC) oversees Ohio’s Medical Marijuana Control Program. This includes managing the Patient & Caregiver Registry, as well as licensing and regulating medical marijuana cultivators, processors, and dispensaries. The guidelines outlined by the Ohio Department of Commerce’s DCC must be strictly followed.

Here are some key compliance requirements for dispensaries:

• Maintain accurate records of all transactions and inventory.
• Report any discrepancies or losses promptly while meeting state reporting requirements.
• Ensure all employees are licensed to work at the dispensary and have proper insurance coverage.
• Verify that CCTV cameras operate 24/7 to meet security standards.
• Dispensaries must report all dispensing information in real time to the Ohio Automated Rx Reporting System (OARRS).

Failing to follow these guidelines can lead to serious consequences and include the cancellation or non-renewal of your license. 

Types of Ohio Dispensary Licenses

The Ohio Division of Cannabis Control offers two main types of dispensary licenses:

Dual-Use Cannabis Licenses

These licenses allow existing medical marijuana dispensaries to expand into the recreational cannabis market at their current locations.

10(B) Dispensary Licenses

These are issued to medical marijuana dispensaries with either a certification of operation or a provisional license.

Dispensaries with this license must not have any common ownership or control with marijuana cultivators or processors.

Create a Business Plan

Before opening your dispensary, you first need a detailed business plan. This isn’t just essential for your success—it’s also a mandatory part of your application process. Your plan must be thorough and compliant with Ohio’s dispensary regulations.

Here’s what your business plan should include:

• Location
• Sourcing Plan
• Funding Plan 
• Revenue Projections
• Staffing Requirements
• Diversity and Equity Goals
• Safety and Security Plan
• Marketing Ideas 
• Technology Plan
• Insurance Provider
• Include any other relevant details to strengthen your application.

For added support, we recommend working with consulting companies. They can help design a business plan that meets the State of Ohio Board of Pharmacy’s requirements. This can reduce the risk of application rejection and set your business up for long-term success.

Note: Ohio allows businesses to hold multiple dispensary licenses, including various types, enabling vertical integration across the cannabis supply chain. However, limits apply:

• No one can hold more than eight recreational dispensary licenses.
• Only one license per cannabis business type is allowed per individual.

Secure Financing

Securing funding for your dispensary can be challenging since cannabis is still illegal at the federal level. Traditional banks and lenders typically don’t offer services for cannabis businesses. However, there are alternative ways to finance your dispensary:

• Self-funding
• Crowdfunding
• Cannabis-Specific Lenders
• Social Equity Programs 
• Venture Capital and Private Equity

Find a Suitable Location

Choosing the right location for your dispensary is a crucial decision, and it’s not always easy. You’ll want a spot that’s highly visible, has plenty of parking, and provides enough space to create an efficient workflow. But perhaps most importantly, your location must be in a municipality that allows cannabis businesses. In Ohio, local governments can choose whether or not to permit adult-use marijuana facilities.

Here are some key guidelines for your location:

• Approval: Your proposed location must be approved by state authorities.
• Distance Restrictions: Dispensaries cannot be located within 500 feet of:some text
  • Public parks or playgrounds
  • Public libraries
  • Schools
  • Churches or other places of worship
  • Community addiction services

To help in your search, you can work with a real estate professional who specializes in cannabis properties. Also, you should use local resources like city zoning and administration offices to find the best options.

Apply for a Cannabis Dispensary License

The process for obtaining a dispensary license in Ohio is still being finalized, but here’s what we know about applying so far:

• Submit an application for a license with the Division of Cannabis Control (DCC). 
• Along with the application, each applicant must submit two sets of fingerprints and a photograph, as required by the rules. The DCC will charge an application fee to cover regulatory costs and background checks.
• Once applications are complete, they will be reviewed, and licenses will be granted to those who meet all requirements.

Documents Required by the DCC

To apply for a dispensary license in Ohio, it's essential to have all the necessary documentation ready. Here's a list of key documents you’ll need to complete your application:

• Proof of Identification and Residency
• Property and Lease Agreements
• Financial Plan and Proof of Assets
• Business Plan
• Education and Training Plan for Staff
• Day-to-Day Operational Plan
• Security Plan
• License-Specific Application Materialssome text
  • Dual-Use License Application Materials:some text
    • Fillable PDF application form
    • Dual-Use Applicant Attestation
    • Tax Authorization Form

• 10(B) License Application Materials:some text
  • Fillable PDF application form
  • 10(B) Applicant Attestation
  • Tax Authorization Form

Submitting the Application

After gathering all the necessary documents, the next step is to submit your application. Here’s what you need to do:

• Pay the non-refundable application fee of $5,000 (if applicable).
• Review your application and all attached documents to ensure everything is correct. Make sure there are no mistakes or false information.

You have two ways to submit your application:

• Email: Send your completed application and documents directly to DCCApplications@com.ohio.gov.
• State File Drop: Upload your application packet to the State of Ohio File Drop (cloud) and notify the Department of Commerce using the same email address.

Application Review and Compliance Inspection

After you’ve submitted the application, the DCC will review it and conduct a compliance inspection before granting you your dispensary license. 

Dual-Use License Process

The DCC processes applications in the order they are received. If your application is incomplete, you’ll have 10 business days to fix the issues and submit the completed application.

Once complete, a provisional license will be issued in your DCC eLicense account.

However, before the Certificate of Operation is granted, the Division will conduct a thorough review of your documents and perform inspections to ensure everything complies with Ohio’s cannabis laws.

During the inspection, several important factors will be reviewed, including:

• Background Checks
• Point-of-Sale System
• Security and Surveillance
• Standard Operating Procedures (SOPs)
• Record Keeping

These are just a few of the key items checked during the inspection. For a full list of compliance requirements, check the official website and review everything carefully.

10(B) License 

Once you submit your complete application by the due date, it enters the drawing. Your number of entries depends on whether you choose a dual-use or adult-use-only license. For details, check the 10(B) License Application Instructions.

After approval of your dispensary location, the Division will review your information for compliance. A provisional license is issued once everything is verified.

Costs Associated with the Application Process

‍

Top Tips for a Successful Cannabis Business Application in Ohio

As cannabis entrepreneurs, we know how challenging the application process can be, and we’ve mentioned all our top tips to increase your chances of success below.

• Understand the Regulations: Familiarize yourself with Ohio’s cannabis laws and stay updated on any changes from the Division of Cannabis Control (DCC).
• Prepare Your Documents: Make sure all required documents, like proof of residency, financial details, and security plans, are ready.
• Be Ready for Inspections: After submitting your application, be prepared for inspections. Ensure your dispensary meets security and operational standards with functioning CCTV and properly trained staff.
• Seek Expert Advice: Consider consulting with professionals to navigate the licensing process and avoid common mistakes.

Build Your Team

After submitting your application, it’s time to focus on building a strong team for your dispensary. Your team plays a key role in the success of your business, so it’s important to plan carefully.

Here’s a simple team setup to get you started:

• Store Manager
• Budtenders or Cannabis Sales Associates
• Receptionist
• Security
• Inventory/Compliance Manager

Design Your Dispensary

Apart from a good location for your dispensary, it’s also essential to create a space that makes customers feel connected to your brand and gives them a positive experience.

Here are some important things to keep in mind when planning your store design and layout:

• Customer Flow: Make it easy for customers to move through the store.
• Payment Options: Offer convenient payment methods, such as terminals, handheld devices, or kiosks.
• Product Display: Showcase your top products with clear, attractive displays.
• Branding: Use your brand colors, logos, and design to create a consistent identity.
• Security: Ensure safe entrances and secure storage for your products.
• Restrooms: Provide clean, accessible restrooms for customers and staff.

Develop Marketing and Sales Strategies

Once your dispensary is ready, it’s time to promote your business! While marketing a cannabis business can be tricky due to stigma and regulations, there are still effective ways to get noticed:

• Create an easy-to-navigate website
• Boost your social media presence
• Host events

In Ohio, it’s also important to follow the advertising rules, including:

• Avoid false or misleading statements
• Do not target anyone under 21 (no cartoons or animals)
• Include health and impairment warnings
• Outdoor cannabis ads are not allowed
• Cannabis products should not be visible from the outside

The Division of Cannabis Control (DCC) may audit your advertisements at any time to ensure you follow these rules. They may require you to stop using certain ads if they find any issues.

Insurance Considerations for Cannabis Dispensaries

Starting a cannabis dispensary requires specific insurance to meet licensing requirements and operate safely. Here are the key types of coverage you’ll likely need:

• General Liability Insurance: Protects your business in case of accidents or injuries that occur at your dispensary.
• Product Liability Insurance: Provides coverage if any of your products cause harm or injury, typically requiring a minimum of $100,000 for bodily injury claims.
• Property Insurance: This covers damage to your dispensary’s buildings, equipment, or other physical assets.
• Workers’ Compensation Insurance: Ensures employees are protected by covering medical expenses and lost wages in case of work-related injuries.

Navigating Common Challenges for Success

Starting a cannabis business isn’t easy. From strict regulations to stiff competition, these challenges can make or break your journey. Let’s dive into some of the most common obstacles Ohio cannabis businesses face and how you can overcome them.

Banking and Financial Challenges

Cannabis is still classified as a Schedule I substance, making many banks hesitant to work with cannabis businesses.

To handle this, consult experts in cannabis finance and legal matters as they can help you connect with cannabis-friendly banks or credit unions.

Marketing and Advertising Restrictions

Promoting a cannabis dispensary is off-limits on many traditional platforms, such as TV, radio, and social media like Facebook. Even billboards are restricted.

To market your dispensary effectively, you’ll need to think creatively. Build a strong local presence through community engagement and partnerships with nearby businesses. Use word-of-mouth marketing, host events, and create engaging website content.

Consolidation and Competition

As cannabis legalization expands, the industry is becoming more competitive. It’s particularly hard for small businesses, and they must stand out with a smart strategy. Focus on delivering exceptional customer service, offering unique products, and creating a strong brand identity. With the right approach, there are still plenty of opportunities for success in this growing market.

Endnote

Running a cannabis dispensary means dealing with a maze of regulations and constant scrutiny. Each state has its licensing requirements, which makes compliance a top priority to avoid fines or legal issues.

One way to ease this burden is by partnering with a reliable insurance provider. A good insurance company doesn’t just protect you from risks—it can also keep you updated on legal changes and ensure you meet all requirements.

At Frontier Risk, we specialize in providing tailored insurance solutions for cannabis businesses. Our experts understand the industry's unique challenges and offer coverage designed to manage your specific risks.

Request a quote today and discover how our customized insurance plans can help your dispensary navigate the complex legal landscape while securing its future. With Frontier Risk, you can focus on growing your business while we take care of the rest!

‍