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Medical marijuana: Ohio moves forward with dispensary license applications

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https://www.cincinnati.com/story/news/politics/2021/09/14/ohio-adds-medical-marijuana-dispensaries-black-business-owners-lawmakers-equity/5693070001/

The Ohio Board of Pharmacy moved ahead with plans to more than double the number of medical marijuana dispensaries in the coming months despite objections from Black legislators and business owners who want expansion to wait until state officials have a plan to diversify the industry.

Ohio has 58 licensed dispensaries. Nine are owned and operated by someone who identifies as African American, Native American, Hispanic, Latino or Asian.

Ohio has capped the number of businesses licensed to grow, process and sell medical marijuana, and they've become a commodity sold for millions of dollars. People of color in Ohio's industry say licenses will become even more valuable if Ohio legalizes recreational use; one plan on the table would grant licenses to existing businesses automatically.

"Ohio has a chance to be or set the gold standard when it comes to cannabis inclusion," said Herb Washington, owner of Leaf Relief dispensary in Boardman.

Pharmacy board moves ahead with license process
The pharmacy board, which regulates dispensaries, voted Tuesday to start the process of awarding an additional 73 licenses. Equity provisions weren't discussed during the meeting or mentioned in the request for applications approved Tuesday.

The actual application hasn't yet been finalized, and the board is still reviewing how it can encourage equity within the state law and rules, spokesman Cameron McNamee said.

But there was one big change made to the process: A lottery to determine which qualified applicants get one or more licenses from a limited number awarded.

That will help level the field, McNamee said, "because it ensures that small and minority-owned businesses can compete with larger multi-state operators, which are generally not operated by minority owners."   

That alone won't solve the problem, Rep. Juanita Brent, D-Cleveland, said. Brent wanted the board to hold off on the application process until it has equity provisions in place that lead to more Black and brown business owners.

But the board is limited in what it could do to address those concerns, McNamee said. Reduced fees for minority applicants were considered, he said, but board attorneys determined they'd likely be struck down in court without the backing of state law and upend the second round of licenses.

Slowing down also wasn't an option for the board, which began discussing this process early this year in response to patient complaints about high prices and long drives to dispensaries.

Ohio's equity provision shut down
Cultivation and dispensary licenses were awarded in 2017 and 2018 under state law that required 15% of all marijuana licenses go to businesses owned by a member of one of those "economically disadvantaged" groups. That part of the law was later struck down by court and won't be in place for this second application round for 73 new licenses that begins this month.

Minority set-asides have been in place in Ohio in other industries where a history of discrimination has been documented. Medical marijuana was a new industry in Ohio, so the state couldn't justify the need for it in court.

In the two years since the court's decisions, most Ohio marijuana businesses are now up and running. But no study has been done on discrimination in the industry here or barriers to access for non-white business owners.

Lawmakers are working on a bill to commission that study, said Rep. Thomas West, D-Canton.

"Let's make sure certain that everything is equal," West said. "Let's make certain that we're supporting the businesses that are already out there. And let's grow this the way that we intended to grow it."

There are ways Ohio could encourage greater equity in the industry without changing the law, said Eric Foster, national policy director for advocacy group Minorities for Medical Marijuana. Among those: asking businesses to commit to diverse hiring practices or requiring licensees spend a certain amount on minority vendors.

Application schedule
Application details will be released Monday. Applications will be accepted from Nov. 4 to 18. Applicants must pay a $5,000 fee with each license application. A single owner can have no more than five dispensary licenses, so companies that already hold five licenses can't win another license.

The board will review applications to make sure they meet the minimum requirements in state law and regulations. If there are more applications submitted than licenses available, the board will conduct a drawing to randomly rank applicants from which winners will be chosen.

Sharon Maerten-Moore, the board's director of medical marijuana operations, expects the lottery will expedite the process. Last time, it took the board six months to review and score applications. Lawsuits are still ongoing from the June 2018 license awards.

Licenses could be awarded in January or February, Maerten-Moore said, about half the time as the first round.

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