OH Monthly Puff: Ohio Market Consolidates Around Medical Incumbents

Ohio cannabis retail market update, May 2026

Ohio’s adult use market is now approaching two years after launch, with cumulative recreational sales past $1 billion since the August 2024 opening and combined cannabis sales topping $1 billion in calendar 2025 alone. 137 active local moratoriums cover about 14% of the state’s population, Senate Bill 56’s hemp ban is redirecting customers to licensed dispensaries, multistate companies are shifting capital into Ohio’s cannabis market, and the dual use and 10(B) dispensary licensing process remains restricted to the existing medical pool with provisional license expiration deadlines now approaching.

Take a look at the three acquisition opportunities in Ohio at the bottom of this article.

Top headlines this month

• 🏛️ DEA launches federal registration forms for state cannabis businesses
• 📊 SB 56 hemp ban lifts dispensary traffic 20 to 30%
• 🏛️ 137 active local moratoriums cover 14% of Ohio
• 🏪 Vext shifts Arizona assets to Ohio, plans three dispensaries
• 📋 Ohio 10(B) provisional license expiration guidance signals next phase of buildout

🏛️ FEDERAL: DEA LAUNCHING REGISTRATION FORMS FOR CANNABIS MANUFACTURERS AND DISTRIBUTORS UNDER SCHEDULE III

The Drug Enforcement Administration announced it will soon launch registration forms for state licensed medical marijuana manufacturing, distribution, and testing businesses seeking federal protections under rescheduling, building on an existing form already available for dispensaries. The DEA also updated its controlled substances lists to formally note that marijuana covered by a state medical cannabis license falls under Schedule III. At the same time, the Bureau of Alcohol, Tobacco, Firearms and Explosives posted draft revisions to a gun purchase form that would recognize medical marijuana’s federally legal status following the Trump administration’s rescheduling move.

These steps represent the federal government’s concrete administrative moves to give state licensed cannabis businesses a formal pathway to federal registration. For state licensed cannabis operators, the arrival of federal registration forms marks a real shift in how state legal cannabis businesses relate to federal regulators and federal law.

📋 OHIO: DUAL USE AND 10(B) LICENSING REMAINS RESTRICTED TO MEDICAL POOL AS PROVISIONAL DEADLINES APPROACH

Ohio’s Department of Commerce continues to accept applications from current medical cannabis license holders for Ohio cannabis dual-use licenses and new 10(B) dispensary licenses, with the licensing window, open since June 7, 2024, still restricted to the existing medical pool nearly two years after Ohio voters approved the initiated statute in November 2023. In January 2026, the Division of Cannabis Control issued supplemental guidance on 10(B) provisional license expiration, signaling that operators holding provisional licenses are now facing deadlines to obtain certificates of operation. Under the 10(B) provision, Level I medical cannabis cultivators with a certificate of operation or provisional license are eligible for 3 dispensary licenses per entity, Level II cultivators are eligible for 1 dispensary license per entity, and independent medical cannabis dispensaries without common ownership or control with any cultivator or processor are eligible for 1 dispensary license per entity. No other license applications are being accepted at this time.

The continued limitation of the licensing window to existing medical operators means the nonmedical cannabis market remains consolidated around incumbents, and the provisional license expiration timeline is the next pressure point. Questions on dual use applications go to DCC@com.ohio.gov with the subject line format “Business Name, MMCP License Number, Dual Use Application Questions.”

🏛️ OHIO: 137 ACTIVE LOCAL MORATORIUMS COVER 14% OF STATE POPULATION

As of May 1, 2026, 163 Ohio municipalities and townships have passed moratoriums prohibiting adult use cannabis businesses, with 137 of those moratoriums currently active. Those 137 jurisdictions cover approximately 14% of Ohio’s population, with an average population of about 12,500 residents per locality. Of 143 ordinances collected and analyzed, 140 jurisdictions enacted full moratoriums covering all adult use operator types. Among localities with defined end dates, the average moratorium length is approximately 15 months, though 106 jurisdictions left the duration of their moratorium undefined. The 163 municipalities that have acted represent just over 7% of Ohio’s 924 incorporated municipalities and 1,307 townships combined. Ohio’s Issue 2, approved by 57% of voters in November 2023, gives localities the power to prohibit adult use cannabis businesses but also created the Host Community Fund, which directs 36% of recreational cannabis excise tax revenue to municipalities that permit dispensaries.

Localities that block adult use cannabis businesses forgo Host Community Fund distributions and local sales tax revenue from cannabis sales. Ohio’s opt out rate also sits well below comparable states. In Michigan’s cannabis market, 73% of municipalities opted out, and in New York, about 50% did, suggesting Ohio’s moratorium activity, while notable, reflects a pattern common to new adult use markets rather than an unusual level of local resistance.

📊 CINCINNATI: SENATE BILL 56 HEMP BAN DRIVES CUSTOMER TRAFFIC TO LICENSED DISPENSARIES

Ohio’s Senate Bill 56, signed by Gov. Mike DeWine in December and effective March 20, 2026, is already changing foot traffic patterns at licensed dispensaries. The law bans hemp products including beverages and tightens packaging rules by prohibiting cartoon characters or figures that could appeal to children on cannabis packages. The law also authorizes future delivery services, though state guidelines have not yet been released. Caveh Azadeh, an owner of The Garden dispensary with locations in Camp Washington, Sycamore Township, and Mansfield, said his customer count is up 20 to 30% since the changes took effect, attributing the increase to former hemp product buyers moving to regulated cannabis dispensaries. He estimates that shift translates to $200,000 to $300,000 in additional revenue for some of his stores.

The numbers reflect a direct demand transfer from unregulated hemp retail to licensed cannabis dispensaries. With hemp beverages and similar products now banned from vape shops and other unlicensed retailers, buyers looking for THC products are moving to the state’s regulated dispensary network, where THC drinks, edibles, and other compliant products remain available for purchase. Both immediate legal challenges to SB 56 are now closed. Ohioans for Cannabis Choice announced March 18, 2026 that its referendum campaign fell short of the 248,092 signatures needed for the November ballot, and the Ohio Supreme Court dismissed a brewery lawsuit challenging Gov. DeWine’s line item veto of the hemp beverage carveout as SB 56 took effect on March 20. That removes the most plausible paths to reversal in the next year and locks in the demand shift toward licensed dispensaries.

🏪 OHIO: VEXT SCIENCE REDEPLOYS ARIZONA ASSETS TO JACKSON CULTIVATION AND PLANS THREE NEW DISPENSARIES

Vext Science announced plans to close and sell its Eloy, Arizona cultivation facility, redeploying equipment from that site to its Jackson, Ohio facility and saving approximately $2 million in capital expenditures in the process. Arizona’s cannabis market has faced sustained pressure, with statewide sales declining approximately 9% year over year in 2025, while Ohio’s cumulative adult use cannabis sales have surpassed $1 billion since the market’s August 2024 launch. The Eloy facility is expected to be decommissioned by the end of Q2 2026, with proceeds from the building sale applied to reduce outstanding mortgage debt. In Ohio, Vext currently operates five consolidated dispensaries and holds eight retail licenses, the state’s current ownership cap. The company’s sixth Ohio location is expected to open in Q2 2026, a seventh is under construction, and construction on the eighth and final location is set to begin in Q3 2026.

The reallocation of physical assets from Arizona to Ohio shows how contrasting market conditions across states are reshaping where capital flows within multistate cannabis companies. Ohio’s adult use transition has produced growth conditions that Arizona’s years of pricing pressure and oversupply have not, leading Vext to redirect both equipment and investment toward Ohio as it approaches the state’s retail license cap.

Ohio Acquisition Opportunities 💼

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The bottom line

Ohio cannabis is consolidating around the existing medical pool nearly two years into adult use sales, with combined cannabis sales topping $1 billion in calendar 2025 and recreational sales alone past $1 billion cumulatively since launch. Local moratoriums, the SB 56 hemp ban driving traffic into licensed dispensaries, and multistate capital reallocation from softer markets like Arizona are all reinforcing the position of incumbent operators. With dual use and 10(B) provisional license deadlines now in view, the next phase is about converting provisional licenses into certificates of operation rather than expanding the license pool.