After Nearly Three Years, Dissatisfaction Over Ohio's Medical Marijuana Prices Is Widespread

Nearly three years after the first medical marijuana dispensary opened in Ohio, slightly over half of the state’s marijuana card holders say they are dissatisfied with the program.

Those are the results of a late September report prepared by the Drug Enforcement and Policy Center at Ohio State University's Moritz College of Law, which tracks the state’s medicinal cannabis program.

The group sent survey questions to 1,402 patients and prospective patients - 1,326 responded - who reported a common complaint: Medical pot is too expensive.

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“This program still needs a lot of work,” said Angelica Warren, a patient and activist who lives in Westerville.

Some costs have fallen, Warren acknowledged, but said prices for some manufactured products are “increasingly outrageous.”

“In other states, I can find a gram of concentrate for $15, yet Ohio has more than quadrupled that price amount,” Warren said.

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Prices for the drug - while lower than in January 2019 when Ohio's first dispensary opened - have largely defied predictions that costs would become affordable as the program matured.

However, plans to award more dispensary licenses and let cultivators grow more cannabis have industry insiders optimistic.

“It will provide a lot more product, and quite possibly it will bring prices down,” said Tim Johnson, founder of the Hilliard-based Cannabis Safety First security and consulting company.

Experts and patient advocates say patients have heard that promise before.

“When you compare the first few months of 2019 to now, prices have definitely gotten lower,” said Jana Hrdinova, the drug policy center's administrative director. “But if you look at the last 18, 24 months, prices have not budged.”

More dispensaries opened and more cultivators grew cannabis in that time, she noted.

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The length of time before the most recent changes result in lower dispensary prices is an open question. The more dispensary license applicants, the longer it takes to approve them, said Cameron McNamee, a spokesperson for the Ohio Board of Pharmacy, which over sees dispensaries. And getting a dispensary up and running can take anywhere from a few months to a few years.

"That being said, we are hopeful our new drawing process, which does not rely on scoring each application, but rather a review of each application to ensure it meets the standards set forth in rule, will reduce the turnaround time," McNamee said.

In June, the last month for which figures were available, a gram of marijuana flower cost around $11. That’s down from around $17 per gram when the state’s program began in earnest in 2019.

The cost of manufactured products like tinctures, oils, and vaping devices are more difficult to gauge because they vary widely between brands and dispensaries offer discounts to certain groups of patients.

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Industry officials defend their prices. Larry Pegram, who owns Pure Ohio Wellness, a company with cultivation, processing, and dispensary licenses, said Ohio’s costs are lower than other nearby states like Pennsylvania, a notion supported by the policy center’s study.

“It’s a bit of a myth now that prices are higher in Ohio,” he said. “Unfortunately you have folks complaining about prices who have been buying on the black market for many years, and that price is going to be considerably lower than what we can do.”

State officials see a lot to like in the drug policy center’s report, noting widespread trust in the safety of Ohio’s medicinal cannabis products.

“The paper also notes that medical marijuana prices in Ohio are significantly lower than in Pennsylvania, another medical-only state in the region,” a commerce department spokesperson said in a statement.

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Ohio limits the square footage on which cultivators can grow cannabis, dividing growers into two tiers. The first is allowed 25,000 square feet of canopy space, and the second is permitted 3,000.

The bifurcated system is intended to let smaller operators with fewer resources get a foothold in the industry.

“It was considerably more money to build the facility, and considerably more assets required to get it, and it was definitely a more competitive process to get the license,” said Larry Pegram, who owns Pure Ohio Wellness, which operates a 25,000-square-foot cultivation site near Springfield.

Cultivators, however, have long complained that the restrictions hobble their business. The right to ask for more square footage came after lengthy discussions between state officials and industry groups.

“We've been really hamstrung over the last two years,” said Tom Hobson, CEO of FN Group Holdings, which operates Wellspring Fields, a 3,000-square-foot cultivation site in Ravenna in northeast Ohio. “We can't produce enough.”

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Last month, the commerce department unveiled an application process cultivators can use to double their square footage. Growers have to meet a handful of criteria, such as proving they’ve used all of the space they were previously allowed. The state’s medical marijuana law, which passed in 2016, lets state officials loosen square footage restrictions when the feel it is appropriate.

Companies like Pure Ohio invested millions to get established in Ohio’s medical marijuana industry, and expanding their growing space should bring prices down by letting them recoup some of that investment, Pegram said.

“We need to get to 50,000 to make money", he said.

Some in the industry worry the move comes too late. The new application process follows a move to more than double the number of dispensary licenses. Ohio has 58 licensed dispensaries, and the Ohio Board of Pharmacy, which oversees dispensaries, will take applications for another 73 in November.

Cultivators have trouble supplying enough product for the processors and dispensaries currently operating, and doubling growing space while more than doubling the number of dispensaries puts Ohio “a little bit behind the 8 ball on this,” Hobson said.

Cresco Labs, which has a cultivation site near Yellow Springs, plans to use every bit of the 50,000 square feet it can apply for, said Max Salinger, vice president of technical cultivation.

“We’re looking at adding close to 140 jobs,” he said.

The company grows marijuana in other states, but can’t transport its products across state lines because the drug is still illegal under federal law.

Industry officials like to cite basic economics when asked about dispensary prices. Greater supply of product should push down prices, according to the laws of supply and demand.

Early in the program, that appeared to be the case, as dispensary costs gradually dropped, but the sticker prices hit a floor around 18 months ago, Hrdinova said.

Regardless of price, the expansion should also give patients more options, industry officials said.

“We’re really hoping to be able to use our space to continue to introduce new strains,” Salinger said.

Gummies, oils, tinctures and vape pens, are just a few of the products available at Ohio dispensaries, and Salinger said Cresco wants to boost its own offerings.

Patients often complain about finding the right strains, said Johnson, who is a medical marijuana cardholder.

More growing space could improve the situation, he said. Although he stressed that products currently available in most dispensaries offer plenty of variety.