More than a year and a half after medical cannabis was sold in Ohio, many breeders are seeking regulatory relief – regarding the amount of space they can use to grow, and how they can package, sell, and market cannabis products.
Level II is maxed out
Smaller growers are demanding more acreage across Ohio. “We move things pretty quickly because we can get them ready and walk out the door,” said Scott Golden, facility manager for Agri-Med Ohio, located in Meigs County, southeast Ohio on the West Virginia border, said and its products markets products with the name “Meigs County”.
Cultivators in Ohio were licensed as either “Level I” or “Level II”. Initially, Level I growers are limited to 25,000 square feet of growing space and Level II growers are limited to 3,000 square feet. The Ohio Department of Commerce, which regulates cultivators, processors, and testing laboratories, can approve Level I expansions to 50,000 square feet and Level II expansions to 6,000 square feet. The department can then approve Level I and II producers for final expansions to 75,000 square feet and 9,000 square feet, respectively.
As a Level II grower, Agri-Med has made full use of its 3,000 square meter indoor growing area in Langsville. It applied for an extension but was rejected, says Golden. Other Level II cultivators in the same situation include Ancient Roots in Wilmington, Fire Rock in Akron, FN Group (Wellspring Fields) in Ravenna, and Ohio Clean Leaf in Dayton, according to the Dayton Daily News.
Jennifer Jarrell, a spokeswoman for the Ohio Department of Commerce, said the department had decided not to file expansion requests yet. “The director, [Sheryl Maxfield]has not solicited license plans from licensees as set out in OAC 3796: 2-1-09, ”said Jarrell. “If there is a need for a program to expand acreage, the department will initiate a formal filing and review process and communicate that process to all licensees.”
On Aug. 21, Jarrell said there are 12 Level I and 12 Level II producers in operation, adding that “there are 7 preliminary Level I licenses and 2 preliminary Level II licenses left.” She also said that several Level I cultivators are not using their entire 25,000 square feet of acreage.
Some of the concerns some Level II growers have raised is that as demand increases, many in the state’s growing patient base may not be able to access products or strains that will help with their ailments due to the growing area to 3,000 square feet.
Agri-Med alternates between growing 12 and 16 strains for the 43 storefronts it sells to across the state. “Right now it’s basically about putting things on the menu,” said Golden.
“Obviously, when you get a bigger rig, you can do your most common loads more often instead of cycling,” he said.
Ancient Roots, located in Wilmington between Cincinnati and Columbus, grows around 20 varieties on its 3,000 square meter acreage. President and CEO David Haley said the 3,000-square-foot boundary includes flower and vegetable space.
“I think our products move pretty quickly,” he said. “We generally have no problem selling it. [I’ll] Put it that way. If we could produce more, we could certainly sell more, and we could probably also offer it at a better price. “
As with other types of businesses, it’s about supply and demand, Haley said, adding, “Right now it seems certain that the demand side is definitely growing at a pretty good pace, which we’d love to see.”
Ancient Roots sells to 43 stores, Haley said, making it clear that many retailers have multiple locations. Some of the pharmacies that Ancient Roots sells products to include Strawberry Fields, Terrasana, The Botanist, and Green Plants.
Haley said the expansions will not be completed immediately after the Department of Commerce approves them. The department needs to think about future patient demand.
“It’s not going to happen for another … best-case scenario, I think six months for most people, and realistically for most, it’s probably closer to 12, depending on how much you need to build or whatever you are.” need to do from a renovation standpoint, ”said Haley. “That’s the only thing I really hope you think about what the needs will be later, not now?”
Riviera Creek, a Level I indoor grower in Youngstown, Ohio, has received 25,000 square feet of growing space. However, CEO Brian Kessler said there was a cost involved. Tier I breeders pay an application fee of $ 20,000, a license fee of $ 180,000, and an annual fee of $ 200,000. Meanwhile, Stage II producers pay a registration fee of $ 2,000, a license fee of $ 18,000, and an annual fee of $ 20,000.
Level I growers, who are spending 10 times more money than Level II growers, need to make sure they have enough patient demand for their product, Kessler said. To be clear, he said cannabis sales started in Ohio in January 2019, but it took some time to open more stores. (Columbus Dispatch reported that 30 stores were open on September 17, 2019).
“It has always been our goal [to] Be careful because you don’t want to start a business that can get into trouble because you’ve spent too much money and there are no customers, ”Kessler said.
Riviera Creek has not yet fully utilized the 25,000 square feet allotted for cultivation, he said. “I don’t know if we’ll be there by the end of this year, but in any case we should probably meet next year,” said Kessler. “We are going to exceed our market share that we should satisfy – we are exceeding it now and we hope to continue to exceed it by 21”.
Public comment on the program
The state of Ohio is in the process of making rule changes to its program, said Ali Simon, a spokesman for the Ohio Board of Pharmacy, which regulates pharmacies and registers patients and caregivers. Stakeholders and industry patients have submitted public comments to the Board suggesting changes to the current and proposed rules.
One draft rule change is to delete the “Tier I” and “Tier II” classifications, which refer to plant material with a THC content of 23% or less and higher amounts not exceeding 35% THC. One of the currently proposed rules is the classification of the “total target THC” taking into account the THC and THCA levels.
In a public comment, a representative from Columbus-based Green Investment Partners, who state has a processing license and Jarrell says has a Level I provisional cultivation license, filed a comment claiming that a current THC variance of 5% difficult to adhere to, as analytical methods also have variance. In response, the board announced that it would increase the variance to 10%.
Representatives from the Ohio Medical Cannabis Cultivators Association (OMCIA) and Huron-based grower and processor Firelands Scientific wrote that they do not endorse a proposed plan to reduce the amount of a daily dose of cannabis for patients from 2.83 (Ohio) to tenths ”) 2.52 grams OMCIA and Firelands cited packaging costs as concerns; In response, the processors can package two units together. While the current rules prescribe the sale of flowers in “2-day units”, processors can sell “single-day units” through changes.
OMCIA and Firelands Scientific also said the state should increase the purchase limit for patients from 8 ounces to 9 ounces for a period of 90 days. In response, the Board wrote, “Has consulted experts who deny claims that the 90-day supply will be increased from 8 to 9 ounces[s] would be safe and appropriate for patients. “
Other Ohio Qualms
Cannabis entrepreneurs told the Cannabis Business Times and Cannabis Dispensary that the Ohio program could be improved in a number of other ways.
Haley said patients should be able to more easily keep track of how much cannabis they can buy. There was a change in April 2020, but the program still causes some patient confusion.
The state has also placed numerous restrictions on cannabis advertising. This includes that cultivators, processors and testing laboratories must submit a report. an “advertising fee” of $ 100; and additional information, such as a description of the advertisement and evidence that no patent is being used, to the Department of Commerce for consideration.
Cleveland-based hip hop group Bone Thugs-N-Harmony reached out to Ancient Roots in late 2019, Haley said. “They wanted to work with us and let us grow a few varieties [them]. And the state was not on our level in this regard. So we couldn’t do it. “
Kessler repeated a similar sentiment about communicating with patients. “As for the way … you get the message out there, this is an issue that I hope over time we can work with the state and things get a little better,” said he. “Marketing is very, very restrictive in the state right now, and part of that was that we were just getting the industry going. I hope that as we get a little more established it will loosen up a bit so people can start telling their stories. “
These concerns aren’t just corporate either. In a public comment, one patient wrote: “Please allow medical marijuana companies to advertise and respond to people on social media[.]”(The Board of Pharmacy replied,” The advertising rule is currently not being examined. “)
Although Haley does not agree to all regulations, he praises the work of the Department of Commerce in support of the medical program. “You got the rules we are all bound by,” he said. “I think over time they will make the necessary changes to make it a little easier for patients to navigate.”