COLUMBUS – Ohioans had great expectations for recreational marijuana after voting to legalize personal use of the plant in Nov. 2023. According to data from the Ohio Division of Cannabis Control, total marijuana sales have reached over $2.7 billion as of mid-June. Non-medical cannabis comprises about $587 million of that figure, with Ohio expected to bring on over 114 new dispensaries during 2025.
Meanwhile, a March report from cannabis wholesale platform LeafLink named Ohio as a market poised to contribute more than 75% of cannabis sales growth over the next three years. But observers of Ohio’s fledgling marketplace believe it has a ways to go, especially with Michigan’s well-established scene offering cheaper products and more extensive inventory.
Tim Johnson, a cannabis advocate who advised state legislature on the 2023 marijuana initiative, said Ohio has yet to reach its potential in the adult-use community, Cleveland Scene Reports. Excessive pricing and ineffective marketing have driven customers to buy illegally, cultivate home grows, or head to Michigan, where 45 dispensaries sit right on the border.
“It’s not all the fault of the license holders – it’s got to do with the restrictive rules and regulations of the program,” said Johnson.
One hurdle to Ohio’s expansion appears to have been cleared for the time being. Senate Bill 56, a proposal to significantly alter the Issue 2 adult-use cannabis law, was pulled from the schedule on June 18, just hours before it was set for a vote. House and Senate legislators had been crafting separate versions of the bill before the eleventh-hour decision. A June 24 House judiciary committee hearing concerning an amended version of SB 56 was cancelled as well.
“There’s not enough votes to pass the bill,” said Johnson. “The will of the people win this one.”
For now, Ohio must find smarter strategies to keep buyers from leaving the state or turning to the black market, Johnson added. Ohio marijuana prices are currently 204% higher than Michigan, which boasts an oversupplied market and no limits on dispensary licenses.
Johnson said that Ohio cannabis companies leveraged the excitement of a brand-new industry to get customers to pay higher prices.
“They had the opportunity to escalate prices on all products, and people would pay regardless,” said Johnson. “They didn’t realize that Ohio had cannabis before they came, so people went back to personal cultivation, or went to Michigan or the illegal market.”
Challenges of a new industry
Ohio’s recreational space has leveled off since those early days. As of June, the price of cannabis flower in Ohio averaged $18.97 for a tenth of an ounce, a 26% drop since adult-use sales kicked off, according to the state’s cannabis control division.
High upfront costs for compliance, security and dispensary construction led to steeper prices during the outset of Ohio’s adult-use market, said Lisa Zwirner, director of education at Cleveland School of Cannabis , an accredited career institution for marijuana employees.
“It was a new market with limited product variety,” said Zwirner. “Most of these companies had to bear the costs (of the build-up), so that was going to get passed down to the consumer.”
Justified or not, skewed pricing continues to send some Ohioans to Michigan, even if it’s impossible to pinpoint how much business has been lost to the state up north. Strategies like better inventory forecasting – meaning fewer expired products to toss – can keep prices down as Ohio gradually brings more dispensaries online, said Zwirner.
In the meantime, Zwirner wants to see cannabis become more mainstream, despite the current tangle of state advertising regulations. Established rules about promoting medical marijuana apply to the rec market as well, including prohibition of any billboards or signage.
Nor can cannabis entrepreneurs place ads on a radio or television broadcast – any image “bearing a resemblance to a cartoon character, fictional character whose target audience is children, youth or pop culture icon” is strictly prohibited, per language from the Ohio Administrative Code.
These limits have created a promotional gap, leaving many Ohioans with only a basic understanding of what the market offers, Zwirner said.
“There are lots of unclear rules about promotion versus education,” she said. “Is there a way for the industry to showcase itself to make sure people feel like the program is not only regulated well, but is there to serve the public?”
Getting creative
Ohio’s tightly controlled advertising laws have netted their share of casualties. Zwirner cited a cannabis business that paid a hefty fine for having food trucks at a dispensary opening. Though Zwirner understands limiting flashy branding that could appeal to kids, a complete promotional blackout makes little sense, she said.
“How about a campaign through the health department, where they’re coordinating with (the division of cannabis control) for public awareness?” Zwirner said. “Don’t hinder us, but lift us up.”
Cannabis companies are required to submit every piece of advertising material to the state for approval, a process that can take up to a month. That waiting period forces businesses to plan marketing months in advance, a challenge when trying to nail down product availability, said Johnson, the Columbus-based cannabis advocate.
“A customer may get emails or social media messages (from a dispensary), but what’s wrong with a short radio or TV blast?” said Johnson. “It can just be for awareness on the education side. There’s an entrapment marketing situation in Ohio, because advertising is in the hands of the regulator instead of the company. The division of alcohol is not doing marketing for Budweiser.”
Until lawmakers loosen the reins, it’s on operators to get creative in how they promote their wares, said Zwirner of the Cleveland School of Cannabis. Education-focused webinars or podcasts are one possible avenue, though innovation can take place at the dispensary as well.
“There’s no product sampling besides smell jars, but you can do sampling of a gummy without the THC infusion,” said Zwirner. “At least you’ll know if you enjoy the taste prior to the high cost of purchase. It’s just a nice way to market the product.”
