20% Price Surge: Ohio Adult-Use Cannabis Consumers Could Initially Pay More Due To High Demand, Limited Supply

As Ohio gears up for the launch of its adult-use cannabis market, consumers may initially face higher prices. Retailers are already witnessing price increases at the wholesale level as they stock up in anticipation of robust demand. This pattern mirrors the early stages of adult-use markets in other states, where transition phases often lead to higher prices.

Industry Leaders Predict Cannabis Price Hikes

Tripp McDermott, COO of Verano Holdings VRNOF, a multi-state operator (MSO), was consulted along with other companies by Crain's Cleveland Business about their dispensary price prediction. "There is typically an increase (in price) with adult-use, and that percentage increase differs by state," noted McDermott. Verano operates five dispensaries in Ohio under the Zen Leaf brand. Similarly, Paul Chialdikas of Curaleaf Holdings CURLF said Ohio’s pricing will depend on supply and demand dynamics and promotional opportunities.

Meanwhile, Andy Rayburn, CEO of Buckeye Relief and president of OHCANN, Ohio’s cannabis industry trade group, suggested that adult-use product prices could be about 20% higher than medical products initially. “We are seeing increased orders from a significant number of dispensaries, but not nearly all of them just yet,” he said, emphasizing the challenge of ensuring adequate supply, especially for flower.

Wholesale Demand Increases Amid Supply Strains

The impending launch has prompted increased demand for wholesale cannabis, leading to price hikes. Retailers are cautious, balancing the risk of overproduction with the need to meet the expected surge in demand. Currently, only 41.7% of Ohio’s allotted cultivation capacity is authorized for use, with just 27.2% in operation, according to Ohio's Division of Cannabis Control (DCC) figures cited by Crain's Cleveland Business.

Ohio Cannabis Market Eyes Billions in Growth

With dual-use applications being processed, the exact start date for recreational cannabis sales remains unclear. Industry expectations project that demand for marijuana products could double or triple under the adult-use program, potentially reaching $2.8 billion in annual sales by 2030.

Read also: What Ohio Investors Can Learn From Maryland’s Cannabis Market: Sector Analyst Keeps It Simple

Ohio’s medical cannabis market has seen modest growth, with $484 million in sales in 2023. As the state transitions to adult-use sales, the state's industry is preparing for increased demand while navigating regulatory changes.

GOP Bill Targets Ohio Cannabis Use, Cultivation

Adding to the complexity, GOP lawmakers recently introduced a bill to control public consumption and home cultivation of cannabis. Proposed by Republican State Senators Kirk Schuring and Stephen Huffman, this move seeks to ban smoking or vaping in public and require home growers to file affidavits with the DCC. 

Read also: These States Could Go Fully Legal Soon & This Cannabis Company Could Win Big: A Top Stock Pick Trading Below Peers

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