This story was republished with permission from Crain’s Cleveland Business.
Ohio has surpassed $87.12 million in adult-use marijuana sales since the program launched about two months ago, according to figures through Sept. 28 from the Ohio Division of Cannabis Control.
In August, adult-use sales, which began Aug. 6, totaled $44.05 million.
That puts non-medical sales for nearly the entire month of September at approximately $43.07 million, or roughly $1.5 million in sales per day on average.
Medical sales through the same period in September, meanwhile, totaled approximately $28.8 million, or roughly $1 million per day on average.
For the sake of comparison, Michigan – which contrasts with Ohio in having a mature rec program and a saturated market – sold $294.15 million in adult-use marijuana and $1.26 million in medical marijuana products in August, according to Michigan’s Cannabis Regulatory Agency. The state has not yet reported sales figures for September.
It’s worth noting, however, that Michigan sold just $7 million in recreational marijuana products in its first month in December 2019. The state had just five dispensaries at the time, three of which had to close due to a supply shortage.
Illinois recorded $39 million in adult-use sales in its first month in January 2020. That figure may have been higher had the state not faced a product shortage that forced some shops to close.
So compared with some neighboring markets, Ohio’s adult-use launch has been rather successful. And with the state already averaging roughly $1.5 million in medical sales per day prior to the onset of adult-use, the state’s total licensed cannabis market has nearly doubled.
The adult-use market being effectively flat across the first two months is a sign of stability, said Tom Haren, spokesman for the OHCANN trade group.
“It’s good particularly because sometimes what you see is, when programs first start, there is a novelty spike in revenue and people don’t go back. But we haven’t seen that so far. And that’s great,” Haren said. “To me, what it shows is when people go to a licensed, regulated dispensary, they go back for their next purchase as opposed to going to Michigan or buying from the illicit market.”
While prices in Ohio on legal marijuana products have come down since August, they remain significantly higher than in nearby Michigan. This dynamic continues to drive many potential cannabis customers across the border.
High prices are also the top reason cited by patients as their top dissatisfaction with the medical program, according to the latest report from the Ohio State University’s Drug Enforcement and Policy Center.
Through the last week of September, the average price for cannabis flower in Ohio was $8.23 per gram, $23.30 per one-tenth of an ounce (or “day unit”) and $29.88 per manufactured unit, according to DCC. Those amounts are down 12%, 12% and 4%, respectively, from prices during the first week of adult-use sales.
According to Headset, a provider of cannabis market data, Ohio has the highest prices for legal marijuana products in the country with an average price per item of approximately $38.90.
Headset collects its data from in-market retail partners and estimates that its sample size includes about 35% of Ohio retailers today.
The expectation is that Ohio’s market for legal cannabis could continue to grow as dispensary access improves, regulations – including prohibitive restrictions on advertising – are adjusted and the dispensary network grows.
Ohio also doesn’t have any pre-rolled marijuana products for sale yet, which is due to the state continuing to write regulations for the adult-use program. Until those regulations are in place, adult-use sales are subject to existing rules in the medical program, which has not recognized smoking as a permitted method of cannabis consumption.
In August 2023, Headset estimated that pre-rolled products accounted for more than 15% of all cannabis sales in the U.S. and one-third of sales in Canada.
Based on a per capita analysis, Headset estimates that Ohio’s combined legal cannabis market could ultimately grow to $2.1 billion in annual sales at maturity. Meanwhile, New Frontier Research, another cannabis research firm, has previously estimated that Ohio’s marijuana market could grow to as much as $3.88 billion in annual sales by 2030, with some 74% of that coming from adult-use sales and the remainder coming from medical.
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