Part three of our series will cover how medical marijuana will be licensed through the Ohio Department of Commerce. This includes licensure for cultivators (growers), processors, dispensaries, and medical labs. The blog also details other miscellaneous regulatory information about this new law.
Many of the rules governing licensure for those in the supply chain will be fleshed out through the rulemaking process but there are a few pieces explicitly stated in the bill. The applicant must not have an ownership or investment interest in, or compensation agreement with, a laboratory licensed by the Department of Commerce or with an applicant for a license to conduct lab testing. The applicant must demonstrate that the facility will not be located within 500 feet of a school, church, public library, public playground, or public park. A criminal records check must show that the individual is not disqualified because of a conviction or guilty plea to certain offenses to be specified in rule. The applicant must be in compliance with all state tax laws. Lastly, the applicant must meet all other licensure eligibility conditions established in rule. Thus, these requirements are just the minimum requirements that will be expanded through the rulemaking process by Commerce and the Board of Pharmacy.
Cultivators must apply to the Department of Commerce to receive a license. The holder of a cultivator license may cultivate medical marijuana and deliver or sell it to processors. Cultivators may not grow medical marijuana for personal, family, or household use and cannot cultivate medical marijuana on any public land.
Processors must receive a license from the Department of Commerce. Once licensed, processors may obtain medical marijuana from licensed cultivators, process medical marijuana into a form that may be dispensed, and deliver or sell processed medical marijuana to licensed retail dispensaries. Processors must package medical marijuana according to federal child-resistant effectiveness standards and label the packaging with the product’s tetrahydrocannabinol (THC) and cannabidiol content.
In order to become a retail dispensary, an individual must apply for licensure to the Board of Pharmacy. Licensed retail dispensaries may obtain medical marijuana from processors and dispense or sell it to patients. When dispensing, the dispensary must only dispense or sell upon showing of a current, valid identification card. Dispensaries must also report the sale in the drug database maintained by the Board of Pharmacy, only use employees who have met training requirements established by the Board, and properly label the package containing medical marijuana.
Laboratories must apply for licensure with the Department of Commerce. Once issued a license, a laboratory may obtain medical marijuana from licensed cultivators, processors, and retail dispensaries to conduct testing on the marijuana. Testing must be done for potency, homogeneity, and contamination. Laboratory applications are restricted to Ohio public institutions of higher education for one year following the date the Department of Commerce begins accepting applications.
Professionals such as attorneys, certified public accountants, and others are not subject to professional disciplinary action solely for engaging in professional or occupational activities related to medical marijuana.
Property Tax Valuation of Land Used to Cultivate or Process
Under the bill, land used for the cultivation or processing of medical marijuana does not qualify for current agricultural use valuation (CAUV) for property tax purposes. The land would be taxed at fair market value.
Local Control and Zoning
HB 523 allows a municipal corporation or board of township trustees to prohibit, or limit the number of, licensed retail dispensaries of medical marijuana in their jurisdictions. Both also retain the ability to adopt zoning ordinances regulating land and buildings under continuing law and home rule authority. The one caveat to these powers is that municipalities and townships cannot limit research related to marijuana that is conducted at a state university or academic medical center.
HB 523 does not allow cultivators, processors, retail dispensaries, or laboratories licensed under the bill to be located within 500 feet of a school, church, public library, public playground, or public park. The Board of Pharmacy and Department of Commerce to create rules and make a determination as to whether a cultivator, processor, retail dispensary, or laboratory is already in existence may remain in operation, relocate, or have its licensed revoked if a school, church, public library, public playground, or public park opens within 500 feet of the license holder. Under the bill, child day-care centers are considered schools.
HB 523 provides a “safe harbor” to financial institutions who provide financial services to licensed cultivators, processors, retail dispensaries, or laboratories. It does this by exempting financial institutions from any Ohio criminal law that includes as an element of the crime, providing financial services to a person who possesses, delivers, or manufactures marijuana or marijuana-derived products. This safe-harbor applies only if the cultivator, processor, retail dispensary, or laboratory is in compliance with the bill and Ohio tax laws.
The bill also urges the United States Congress, the Attorney General of the United States, and the United States Drug Enforcement Agency to reclassify marijuana to allow for greater research of its medical use and to ease regulatory burdens on such research.