Four Ohio cannabis companies have seemingly gained an advantage in the June 21 lottery for selecting new dispensary sites. This lottery, organized by Ohio cannabis regulators, was intended to determine the order in which companies could choose their locations in the state’s new adult-use market. However, some questions have been raised about the eligibility and strategies of these companies.
Background
Ohio law mandates that dispensaries must be at least 1 mile apart, making the selection of prime locations highly competitive. The state’s 126 medical cannabis dispensaries are now transitioning to dual-use licenses, allowing them to serve both medical and adult-use customers.
Additionally, existing medical cannabis businesses can apply for new licenses, known as 10(B) licenses, to open new dispensary locations.
Companies with Multiple Lottery Entries
1. Farmaceutical RX
- Current Holdings: Three dispensaries in Cuyahoga Falls, East Liverpool, and Elyria.
- Lottery Entries: Six 10(B) licenses under different names, potentially bringing their total to nine dispensaries.
2. Firelands Scientific (OPC Cultivation LLC)
- Current Holdings: Five dispensaries.
- Lottery Entries: Five 10(B) licenses, including entries under Aron OH LLC and Deaver Ohio LLC, potentially bringing their total to ten dispensaries.
- Clarification: Firelands Scientific CEO Jeff McCourt stated that his company has no interest in the additional 10(B) licenses applied for by Aron and Deaver.
3. Ayr Wellness (Parma Wellness Center LLC)
- Current Holdings: Three dispensaries.
- Lottery Entries: Six 10(B) licenses under different names, potentially increasing their total to nine dispensaries.
4. Ascend Wellness (Hemma LLC)
- Current Holdings: Five dispensaries.
- Lottery Entries: Four 10(B) licenses, potentially bringing their total to nine dispensaries.
Eligibility Concerns
Ohio law allows companies to apply for 10(B) licenses as either cultivators or independent retailers, but not both. The Ohio Department of Commerce reviewed and approved ownership changes for Farmaceutical RX, ensuring their eligibility for the lottery. Similar reviews were conducted for Firelands Scientific, Ayr Wellness, and Ascend Wellness, but specific details were not disclosed.
Site Selection Process
The site selection process is critical due to the 1-mile rule. Companies with higher lottery rankings can secure better locations, potentially disadvantaging those with lower rankings.
The process will begin in phases starting July 8, with companies submitting up to three potential addresses per 10(B) license. If all proposed locations are within a 1-mile radius of higher-ranked sites, the company will have to choose new addresses.
Future Implications
The outcome of this lottery and site selection process will significantly impact Ohio’s cannabis market. The state could have up to 350 dispensaries, including existing medical dispensaries, new 10(B) licenses, and 50 new licenses focused on social equity. With Ohio’s cannabis market projected to reach $1.65 billion by 2027, location will be crucial for each dispensary’s success.