OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
S.B. 261 Bill Analysis
134th General Assembly
Click here for S.B. 261’s Fiscal Note
Version: As Passed by the Senate
Primary Sponsor: Sen. S. Huffman
Effective Date:
Carla Napolitano, Attorney
SUMMARY
 “Creates the Division of Marijuana Control (DMC) within the Department of Commerce
for the purpose of overseeing Ohio’s Medical Marijuana Program.
 Transfers the portions of the Medical Marijuana Program currently overseen by the
Board of Pharmacy to DMC, including registration of patients and the licensure and
oversight of dispensaries.
 Expands the types of medical conditions that are eligible for treatment with medical
marijuana.
 Requires DMC to endeavor to achieve a ratio of at least one licensed retail dispensary
per 1,000 registered patients up to the first 300,000 registered patients and then adding
additional retail dispensaries on an as-needed basis.
 Allows licensed dispensaries to advertise, on social media or otherwise, without
receiving prior approval from DMC.
 Allows licensed dispensaries to display products on advertisements and within the
dispensary.
 Requires DMC to establish a new cultivator license category called stand-alone
processor.
 Creates two levels of cultivator licenses, with level I cultivating up to 50,000 square feet
and level II cultivating up to 6,000 square feet.
 Enables cultivators to request an expansion of their cultivated area, with level I being
able to cultivate up to 75,000 square feet and level II up to 20,000 square feet.
 Allows marijuana products that fail laboratory testing or that falls outside of typical
testing results to be retested.
 Allows tested samples to be sold.
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 Expands the permissible forms of medical marijuana that may be dispensed to include
pills, capsules and suppositories, oral pouches, oral strips, oral or topical sprays, salves,
lotions, or similar items, and inhalers.
 Increases the permissible tetrahydrocannabinol (THC) content of extracts, from not
more than 70% to 90%.
 Enables physicians to recommend medical marijuana via telemedicine.
 Allows a physician that is the medical director of a dispensary to be certified to
recommend medical marijuana.
TABLE OF CONTENTS
Overview...................................................................................................................................... 2
Transition provisions ................................................................................................................... 3
Expansion of qualifying condition ................................................................................................... 4
Adoption of rules ............................................................................................................................ 5
Licenses ........................................................................................................................................... 6
Cultivator licenses ....................................................................................................................... 6
Retail dispensary licenses ............................................................................................................ 8
Processor license ......................................................................................................................... 8
Laboratory license ....................................................................................................................... 9
Permissible forms and methods ................................................................................................... 10
Petitioning for additional methods of consumption ................................................................. 10
Dosage of medical marijuana .................................................................................................... 11
Inspections without notice ........................................................................................................... 11
Equity study .................................................................................................................................. 11
Physician medical marijuana certification and the State Medical Board ..................................... 11
Closed-loop payment system .................................................................................................... 12
Records checks for employees...................................................................................................... 12
Definitions ..................................................................................................................................... 12
DETAILED ANALYSIS
Overview
The bill creates a new Division of Marijuana Control (DMC) within the Department of
Commerce. The purpose of DMC is to oversee and administer Ohio’s Medical Marijuana Control
Program. As such, the majority of responsibilities the State Board of Pharmacy has with regard
to the medical marijuana program are transferred to DMC. These transferred responsibilities
include: patient and caregiver registration, approval and oversight of retail dispensary
licensees, oversight of licensee taxation, criminal records checks for license applicants and
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employees, investigations of violations of the Medical Marijuana Law, entering into reciprocity
agreements with other states, and maintenance of a toll-free telephone line for responding to
inquiries related to the Medical Marijuana Program. It also changes references in the Revised
Code as necessary to accommodate these changes.1
Transition provisions
Not later than 60 days after the bill’s effective date, the Department of Commerce and
the State Board of Pharmacy must transfer regulation of the Medical Marijuana Control
Program to DMC. Until the transfer is complete, the Board retains regulatory authority over
licensing of retail dispensaries, registering patients and caregivers, and related duties.2
Upon the completion of the transfer, the Medical Marijuana Control Program in the
State Board of Pharmacy is abolished. All of its records, as well of all of its other assets and
liabilities relating to the Medical Marijuana Control Program, must be transferred to DMC. DMC
is successor to, and assumes the obligations of, the Medical Marijuana Control Program in the
State Board of Pharmacy. Any business commenced, but not completed by the Board on the
date of the completion of the transfer must be completed by DMC in the same manner, and
with the same effect, as if completed by the State Board of Pharmacy. No validation, cure, right,
privilege, remedy, obligation, or liability is lost or impaired by reason of the transfer.
Furthermore, DMC is responsible for adopting rules establishing standards and
procedures for the Medical Marijuana Control Program. The rules regulating the Medical
Marijuana Control Program in existence on the bill’s effective date continue in effect until
repealed or amended by DMC. However, not later than 90 days after the bill’s effective date,
DMC must review and propose revisions to the rules related to medical marijuana retail
dispensaries.
A license to operate as a retail dispensary, as well as a patient registration, issued by the
Board remain in effect for the remainder of the license’s or registration’s term, unless earlier
suspended or revoked. However, the bill authorizes DMC to suspend, suspend without prior
hearing, revoke, or refuse to renew a license issued by the Board.3 Until the transfer is
complete, the Board will issue renewals; thereafter DMC will issue them.
Any form of medical marijuana approved by the State Board of Pharmacy remains
approved until revoked by DMC, after giving notice to the petitioner for that alternate form.
DMC must post notice of that revocation on its website.4
1R.C. 3796.02, 3796.03, 3796.032, 3796.04, repealed, 3796.05, 3796.06, 3796.061, 3796.08, 3796.10,
3796.11, 3796.12, 3796.13, 3796.14, 3796.15, 3796.16, 3796.17, 3796.22, 3796.23, 3796.27, 3796.30,
and 4776.01.
2 R.C. 3796.08(A)(1).
3 R.C. 3796.14(A)(1)(a).
4 Section 4 of the bill.
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Expansion of qualifying condition
The bill expands the types of medical conditions that would qualify for treatment with
marijuana. Under current law, all of the following are qualifying medical conditions:
 Acquired immune deficiency syndrome;
 Alzheimer’s disease;
 Amyotrophic lateral sclerosis;
 Cancer;
 Chronic traumatic encephalopathy;
 Crohn’s disease;
 Epilepsy or another seizure disorder;
 Fibromyalgia;
 Glaucoma;
 Hepatitis C;
 Inflammatory bowel disease;
 Multiple sclerosis;
 Pain that is either chronic and severe or intractable.
 Parkinson’s disease;
 Positive status for HIV;
 Post-traumatic stress disorder;
 Sickle cell anemia;
 Spinal cord disease or injury;
 Tourette’s syndrome;
 Traumatic brain injury;
 Ulcerative colitis;
 Any other disease or condition added by the State Medical Board; in February 2021, the
State Medical Board added:
 Arthritis;
 Chronic migraines; and
 Complex region pain syndrome.
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The bill adds the following conditions:
 Arthritis;
 Migraines;
 Autism spectrum disorder;
 Spasticity or chronic muscle spasms;
 Hospice care or terminal illness;
 Opioid use disorder.
The bill also allows physicians to recommend marijuana for treatment for any condition
if the physician, in the physician’s sole discretion and medical opinion, finds either of the
following:
 That the patient’s symptoms may reasonably be expected to be relieved from medical
marijuana;
 That the patient may otherwise reasonably be expected to benefit from medical
marijuana.5
Adoption of rules
The bill requires DMC to adopt rules establishing standards and procedures for the
medical marijuana control program. As part of the transfer of responsibilities from the State
Board of Pharmacy, the Board’s duty to adopt rules is transferred to DMC.
The bill tweaks several of the transferred rules:
 The bill transfers from the Board of Pharmacy the duty to adopt rules to establish the
number of retail dispensary licenses that will be permitted at any one time. But the bill
additionally requires these rules to endeavor to achieve a ratio of at least one retail
dispensary per 1,000 registered patients up to the first 300,000 registered patients and
then adding additional retail dispensaries on an as-needed basis thereafter, to be
evaluated and awarded at least once every two years. When determining the number of
retail dispensaries to license during any licensing event, DMC must take into account
anticipated growth in patient numbers and patient demand based on sales and market
data to ensure that new retail dispensary openings are timed to meet such demand.
 The bill continues the requirement to adopt rules that specify reasons for which a
license may be suspended, including without prior hearing, revoked, or not be renewed
or issued and the reasons for which a civil penalty may be imposed on a license holder.
5 R.C. 3796.01(A)(7) and Ohio Medical Marijuana Control Program, Frequently Asked Questions,
https://medicalmarijuana.ohio.gov/faqs (accessed January 12, 2022).
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But the bill does not transfer the requirement to adopt rules that specify reasons for
which a registration may be suspended, revoked, or not renewed or issued.
 The bill requires DMC to adopt rules that establish standards and procedures for the
testing and retesting of medical marijuana by a licensed laboratory. The bill expands this
rule to apply to retesting as well.
The bill also requires DMC to adopt rules that do the following:
 Establish a new category of cultivator license for stand-alone processors and rules for
their prompt establishment.
 Allow licensed dispensaries to advertise, on social media or otherwise, without receiving
prior approval from DMC, allow licensed dispensaries to display products on
advertisements and within the dispensary, and impose a fine or other penalties for
licensed entities that fail to comply with these or any other rules DMC adopts pertaining
to advertisements.
Finally, the bill additionally permits DMC to revoke a license for failure to secure a
certificate of operation within 18 months of provisional licensure. The holder of a provisional
license may apply to DMC for not more than two six-month extensions of this deadline. DMC
must approve the extension if the license holder demonstrates that the license holder has
made a good-faith effort at becoming operational.6
Licenses
Cultivator licenses
The bill expands the reasons that must be considered when establishing the number of
cultivator licenses that will be permitted at any one time. Under the bill, DMC must additionally
consider whether licensed cultivators have expanded to full capacity. Continuing, unchanged,
considerations are Ohio’s population and the number of patients seeking to use medical
marijuana.7
The bill also expands what the holder of a valid cultivator license may do. Under current
law, a licensed cultivator may cultivate marijuana. The bill expands this to include the
acquisition of seeds or clones necessary to begin cultivation of a particular of medical marijuana
from another licensed cultivator. In addition to delivering or selling medical marijuana to one or
more licensed processor, under the bill, a licensed cultivator may also sell or deliver medical
marijuana to other cultivators or retail dispensaries. A cultivator would also be allowed to
register cuttings with the Ohio Marijuana Enforcement Tracking Reporting and Compliance
System if both of the following are met:
 The cuttings were obtained from a legal, out-of-state cultivator;
6 R.C. 3796.03 (with conforming changes in R.C. 109.572 and Section 4) and 3796.04, repealed.
7 R.C. 3796.05(A).
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 The cuttings have not otherwise been rooted as a clone.8
The bill also requires cultivators to do all of the following when processing medical
marijuana:
 Package the medical marijuana in accordance with federal child-resistant effectiveness
standards;
 Label the medical marijuana packaging with the product’s tetrahydrocannabinol (THC)
and cannabidiol content;
 Comply with any packaging or labeling requirements established in rules adopted by
DMC.9
The bill authorizes DMC to issue two levels of cultivator licenses, as follows:
 A level I license holder may be approved to cultivate an area of up to 50,000 square
feet;
 A level II license holder may be approved to cultivate an area of up to 6,000 square feet.
When reviewing applicants for a level I license, DMC is required to give preference to level II
cultivator license holders.10
DMC may approve an expansion of an existing facility’s marijuana cultivation area,
based on cultiva