Law Firm Walter Haverfield write..
eptember 21, 2021
Since its inception in 2018, Ohio’s medical marijuana program has continuously struggled with poor patient accessibility. In November 2020, 62% of registered patients reported having to travel more than 10 miles to reach a dispensary. To improve patient access, the Board of Pharmacy has approved the issuance of up to 73 new dispensary licenses. Interested applicants will need to move quickly, as this application window will close on November 18 at 2:00 pm EST.
The new dispensaries will be distributed across Ohio’s 31 “dispensary districts” based on patient population, with a goal of ensuring a ratio in each district of around 1,200 registered patients per dispensary. Some districts will have only one new license available, while severely underserved districts will have as many as 9 new licenses offered. Of the 73 total new licenses up for grabs:
- 22 are located in northeast Ohio (including Cleveland, Akron, and Youngstown metros);
- 8 in northwest Ohio (including Toledo metro);
- 17 in southeast Ohio (including Columbus and Athens metros); and,
- 26 in southwest Ohio (including Cincinnati and Dayton metros).
Applications must be submitted online using a web portal that will be posted on the Medical Marijuana Control Program’s website. The portal is expected to open on November 4 at 8:00am EST. Prior to the submission window opening, there will be two question and answer periods (9/20 – 10/6 and 10/17 – 10/21). The Board will limit questions to three per person per Q&A period. Importantly, any attempt to communicate with the Board following the end of the second Q&A period will result in an automatic disqualification from receiving a license. Accordingly, it is crucial that applicants obtain the assistance of legal counsel who are experienced in the medical marijuana industry and possess extensive knowledge of Ohio’s application process and the Board’s expectations from applicants.
The Board has announced an important change in how dispensary licenses will be awarded in this application round. During the previous 2017-18 application period, a third-party consultant scored each application based on the quality of detailed narrative responses to application questions. The 58 highest-scoring applicants were then awarded provisional dispensary licenses. In a tremendous paradigm shift, the Board has decided that the 73 new licenses will be awarded via a lottery system. Rather than competitively evaluating applications against one another, the Board will conduct a randomized drawing for each dispensary district. The drawing will produce a ranked order list of all applications in each district.
Next, the Board will evaluate each winning application for compliance with the Ohio Revised Code and Ohio Administrative Code. Winning applicants may be disqualified for any of a myriad of reasons, ranging from failure to fully respond to all application prompts, to violations of Ohio’s complex regulations surrounding application submissions, ownership disclosures, or financial requirements. The Board will also evaluate each applicant’s access to liquid capital ($250,000 minimum) and may refuse to issue a conditional license to any applicant possessing insufficient assets. Submitting a perfect application will be a necessity, as it is unlikely that applicants will be given any opportunity to amend or correct deficiencies identified during the Board’s review.
Applicants may only submit one application per land parcel (submitting subsequent applications for any adjoining parcels will result in disqualification from this licensing round). Note that applicants are required to have control over any parcel for which they apply, either by ownership or lease. Otherwise, applicants are not limited in the number of applications they may submit. However, the Ohio Admin. Code bars a “single owner” from receiving more than five dispensary licenses at any given time. State regulations also prohibit the issuance of more than 66% of available licenses in a multi-license district to any single applicant.
John N. Neal is head of the Walter | Haverfield Hospitality and Liquor Control team. He can be reached at [email protected] or at 216-619-7866.
Alexander R. Bibisi is an associate at Walter | Haverfield who focuses his practice on hospitality and liquor control. He can be reached at [email protected] or at 216-658-6217.
