A new preliminary analysis predicts that Ohio’s medical marijuana market will be worth $200 million to $400 million annually.
Ohio became the most recent state to legalize medical marijuana when Gov. John Kasich signed House Bill 523 into law in June. Now Ohio’s considered to potentially be the largest medical marijuana market in the country, with a preliminary analysis from Marijuana Business Daily estimating that sales could reach $200 million to $400 million annually.
Medical marijuana sales in Ohio will be susceptible to a 5.75 percent sales tax and, depending on additional rates set by local municipalities, could get as high as 8 percent. According to Marijuana Business Daily‘s estimates, medical marijuana sales could bring in as much as $23 million in taxes for Ohio.
Although medical marijuana becomes legal September 1 under the law, dispensaries won’t be open on that date. The state still needs to set up an identification process for patients and caregivers. Ohio’s Department of Commerce has yet to establish the number of cultivators that will be allowed, and the Board of Pharmacy still needs to establish the number of dispensaries based on population and expected demand. The program isn’t expected to be fully functional for about two years.
“Many rules and regulations that will ultimately affect the business landscape and size of the market are still being hammered out, as is the exact tax structure,” said Chris Walsh, editorial director of Marijuana Business Daily.
“But from what we can tell now, this will be one of the larger medical cannabis markets in the country, and particularly in the eastern half of the country. It also has the potential to give Ohio’s tax coffers a sizable boost, which will benefit communities across the state.”
The preliminary estimates are based on the state’s populations, “the business-friendly nature of Ohio’s MMJ laws,” the rules on doctors, the average spent in other markets, and the list of qualifying conditions.
Ohio’s medical marijuana law allows medical marijuana for patients with amyotrophic lateral sclerosis (ALS), Alzheimer’s disease, cancer, chronic traumatic encephalopathy (CTE), Crohn’s disease, epilepsy and other seizure disorders, fibromyalgia, glaucoma, hepatitis C, HIV/AIDS, inflammatory bowel disease, multiple sclerosis, pain, Parkinson’s disease, post-traumatic stress disorder (PTSD), sickle cell anemia, spinal cord disease or injury, Tourette’s syndrome, traumatic brain injury and ulcerative colitis.
The inclusion of pain (chronic, severe and intractable) will make a huge impact on the state’s market. A report found that in eight medical marijuana states, pain accounted for 64 percent of medical marijuana patients. Minnesota recently expanded its list of qualifying conditions to include intractable pain and saw a huge boost in sales.
In states that include pain among the list of approved conditions, about 1 to 2 percent of the state’s population signs up for the state’s medical marijuana program. Nearly 2 percent of Colorado’s population is registered for medical marijuana. According to Advance Ohio’s news site Cleveland.com, in Colorado, which has half the population of Ohio, medical marijuana sales totaled $408 million in 2015.
Learn more about medical marijuana by visiting our definitive overview.