Big hurdles ahead for medical pot in Ohio

CINCINNATI -- In less than a year, some of Ohio’s sickest residents should legally have a new drug to consider: medical marijuana.

The state's newly createdMedical Marijuana Control Program is under a Sept. 8, 2018 deadline to fully roll out the new law. Already, hundreds of new rules have been crafted to regulate the budding industry.  

But hundreds more decisions are still pending.

“The state has a really tight timeline. There’s no room for error,” said James Gould, chairman of Green Light Acquisitions, a Cincinnati-based holding firm for medical marijuana-related ventures. 

But with less than year to go, Ohio still has lots of work ahead.

Among the biggest items still to be decided: Who will be able to grow, process, test and sell medical marijuana across Ohio.

More than 180 wannabe marijuana farmers have applied to be one of 24 licensed cultivators. By November, the state’s expected to announce which of those applicants will be awarded the 12 licenses for large operations and 12 for smaller farms.

Applicants have tens of thousands of dollars riding on their bet to become part of what some have estimated will become the country's largest medical marijuana market. 

“Ohio has the potential to be a serious heavyweight in this industry,” said Chris Walsh of Marijuana Business Daily, a Colorado-based news and research firm. “In terms of patient counts and retail revenues, Ohio could become a behemoth."

RELATED:  Meet some of the people who might become Ohio’s medical marijuana farmers

Large cultivators had to pay a non-refundable $20,000 application, and will face a $180,000 licensing fee and $200,000 annual operating fee if approved. Smaller operations paid a $2,000 application fee and must pay an $18,000 licensing fee and a $20,000 annual renewal fee. Money raised from those fees will pay for the Medical Marijuana Control Program.

Farmers who are chosen must be ready to immediately launch their new ventures. Marijuana can take up to 14 weeks to harvest. That doesn't include the time it takes to turn the plants into consumable and state-approved medical products, or the time it will take for dozens of new marijuana-based firms to get their businesses off the ground.

It all adds up to a massive time crunch, Gould said.

“Work your way backwards (from September 2018), and you damn well better know how to build a building," said Gould, who has applied for a large cultivator licenses. "You have to know how to build a business. You have to know how to grow, how to get it transported, have no contamination and proper controls over traffic and security.”

“We’re hoping we can avoid a bottleneck”

Starting next year, patients are supposed to be able register online for a medical marijuana card, which comes with a $50 fee. Patients who are approved for medical marijuana must have one of 26 qualifying conditions and have doctor's recommendation. A final date hasn't been set for when the registry will be open.

Doctors who want to be certified to recommend the drug to their patients must complete two hours of training. 

Testing the final products is also a key link in the supply chain. Testing facilities must check the drugs for fungus and verify the level of THC, which is the part of marijuana that makes users feel high.

Ohio’s law requires that a state-based university or college handle the testing. So far, just Hocking College in Nelsvonville has applied for the job. 

Whether one college will be able to handle all the testing for the state remains a big concern for industry observers.

“It’s definitely one of the areas we’re watching closely," said Thomas Rosenberger, a spokesman for theNational Cannabis Association of Ohio. "We’re hoping that we can avoid a bottleneck. Everything so far has been on pace to meet the deadlines, but there is still a lot of watching and waiting at this point.”

Growing and processing Ohio’s medical pot

Recently, rules were finalized that will allow 60 dispensaries to operate across the state. The rules dissect Ohio into districts – with a designated number of dispensaries per district.

Hamilton County will make up a newly created Southwest Ohio District 1, where up to three dispensaries can operate. Warren, Clinton and Clermont Counties make up Southwest District 5. Across all three counties just one dispensary will be allowed to open. 

Decisions won’t be made until early next year on who will be awarded licenses for dispensaries. 

But before medical marijuana can hit the shelves in Ohio, the plant has to be processed into an allowable form of medical pot.

Under the law, which Ohio’s legislature passed last September, patients with qualifying conditions will be able to buy a 90-day supply of medical pot in the form of oils, patches, edibles and plant materials for vaporizing. Smoking the drug will still be illegal.

Ohio is expected to award at least 40 processing licenses. Those applicants, which can begin to apply next month, face a $10,000 application fee and $100,000 annual renewal fee. 

Some firms like Gould’s are applying to grow, process and dispense the drug.

“It’s hard for me, waiting for other people to decide the fate of this industry in Ohio,” Gould said. “We can get it done. We can have product in the stores by September. I would be not only amazed, but upset if we are not picked.”