Data Scoop: Out-of-State Companies Buy Place in Ohio Weed Industry
There are more than two dozen marijuana companies operating in Northeast Ohio, according to Crain’s new Marijuana Business Directory.
But of the 52 state licenses they represent, nearly a third are controlled by non-state companies just a few years after the start of Ohio’s medical marijuana control program.
Former Ohio Governor John Kasich signed Bill 523, which created the OMMCP, in the summer of 2016. Business licenses for marijuana growers, processors and dispensaries began to roll out. be awarded a few years later.
Legal marijuana sales finally began in January 2019. The industry has grown slowly since.
Ohio regulators made a point of having local ownership of the marijuana businesses in the beginning, but it was never to last.
Licensees need to be in business for only one year before they can request to transfer their licenses – which are in high demand and just as expensive and cumbersome to secure – to another entity.
Data from the Marijuana Business Directory shows that acquisitions by out-of-state owners have taken place in recent years with multiple entities only in Northeast Ohio, where 30% of licensed businesses are operated by parent companies. not located in Ohio.
These acquisitions are a testament to the efforts of multi-state operators (MSOs) to secure part of Ohio’s booming marijuana market.
Take for example Area of ââassets, an MSO headquartered in New York.
The company announced in early October that its subsidiary High Street Capital had acquired Greenleaf Gardens, a vertically integrated marijuana company in Ohio. The deal includes a Level I processing (Greenleaf Therapeutics) and cultivation facility at Middlefield with space for future expansion. It has also obtained five dispensaries (Greenleaf Apothecaries) operated under the brand name The Botanist, a name which is owned and licensed by Acreage. Four of these retail stores are in Northeast Ohio.
Acreage said Greenleaf dispensaries represent 20% of the state’s current retail market.
According to Crain’s research, other local marijuana companies are controlled by a parent organization in states like Illinois, New York, Florida, Arizona, and Canada.
As the industry matures, its likely industry consolidation will continue with MSOs making a big part of the catch.
The goal for many of these companies is to get involved in markets now where they can anticipate the seemingly inevitable start of adult recreational marijuana programs. Many companies strive to be vertically integrated, which means controlling cultivation, manufacturing and dispensary operations.
Regulators are also preparing to award 73 new dispensary licenses after grossly underestimating patient demand.
There are currently three separate efforts in Ohio alone that are looking to establish a market for adults. These include separate legalization bills from Democratic and Republican lawmakers as well as a citizen-led effort through what is known as “enacted law.”