In 2023, Ohio’s marijuana market witnessed a minimal growth of 1%, breaking the previous year’s record for annual sales by dollar amount. However, such seemingly inconsequential growth has raised substantial concerns among industry experts since this follows a consistent pattern of declining growth rates each year.
Facing mounting pressure to maintain their sales levels from last year, license holders had to significantly increase product shipments. While this increased the volume of plant material and manufactured products sold in 2023 compared to 2022, average retail prices for flowers decreased from $27 to $16.92 per one-tenth of an ounce.
Licensed Cannabis Companies Struggling Financially
Many licensed cannabis companies in Ohio are reportedly grappling with financial losses. The number of active patients has not lived up to initial expectations, adding to the woes of these businesses. Several critical factors contribute to the slower-than-anticipated growth, including sky-high retail prices, limited qualifying conditions for medical marijuana, advertising restrictions, inflation’s impact on disposable incomes, dispensary accessibility issues, competition from neighboring states with adult-use markets like Michigan, and inadequate employee protections for those interested in trying medical cannabis.
High Retail Prices Affect Affordability
Rising retail prices have become a major inhibiting factor in promoting the use of medical marijuana in Ohio. Plant material and manufactured product costs continue to soar, which limits access for many potential patients who might otherwise benefit from the therapeutic effects of cannabis.
Limited Qualifying Conditions
In addition to high prices, limited qualifying conditions for medical marijuana have restricted the number of eligible patients, thereby impacting the growth prospects of the industry. Instances wherein patients suffering from chronic pain or other debilitating conditions who might benefit from medical cannabis are discouraged from using it due to restrictive eligibility criteria, further hampering the sector’s performance.
Advertising and Accessibility Issues
Extensive advertising restrictions have prevented cannabis businesses from effectively reaching out to potential customers, curbing business expansion opportunities in Ohio. Additionally, accessibility issues continue to persist due to a scarcity of conveniently located dispensaries, resulting in missed sales and a lack of widespread adoption among residents seeking alternative treatment options.
Competition from Neighboring States
The burgeoning adult-use market in neighboring states like Michigan poses stiff competition for Ohio’s medical cannabis market. With legal, recreational use now allowed in nearby regions, potential patients may prefer to take a short trip across state lines rather than go through the lengthy application process and high costs associated with obtaining medical marijuana in Ohio.
Inadequate Employee Protections
Concerns about inadequate employee protections deter many prospective patients from trying medical cannabis as a viable treatment option. The fear of losing jobs or facing discrimination at the workplace has resulted in an overall decline in patient numbers, adversely affecting the cannabis market’s growth in the state.
Forecasts Predict Future Growth Despite Challenges
Despite the challenges posed by stagnant market dynamics, research firm New Frontier Data forecasts that Ohio’s cannabis market could reach nearly $2 billion in adult-use sales and an additional $460 million in medical sales by 2028. This optimistic outlook is predicated on continued regulatory changes and increased accessibility to broader patient populations, which will likely influence patient demand and propel market growth over the next few years.
While Ohio’s medical marijuana market faces significant hurdles, such as high retail prices and limited qualifying conditions, there remains a strong potential for growth in the coming years. With appropriate intervention from policymakers and concerted efforts to address industry concerns, these challenges will likely be overcome, and the market will ultimately realize its full potential.