The price of cannabis has gradually dropped since the launch of recreational sale in Ohio this summer, according to state data.
Local dispensaries have reported a slower-than-expected start to the adult-use program, pointing to consumer confusion, vendor costs and Ohio’s unique set of program rules as some contributing factors.
“We would agree with the other dispensaries that things are slower than anticipated. We definitely are seeing a lot more traffic than prior to adult-use but less than what we had forecasted,” Nikki Stanley, the director of marketing for Terrasana, which has a location in Springfield.
But adults across the state are engaging with the recreational market, with $178.5 million reported in total product sales as of last week.
Ohio prices dropping
The Ohio Division of Cannabis Control tracks average prices of recreational cannabis statewide on a weekly basis. When the recreational sales first launched in August, the average cost of one-tenth ounce of plant product was $26.59, and the manufactured sales average was $31.06, according to state records.
As of last week, the average cost of a one-tenth ounce of plant product, or “flower,” was $21.72 statewide (or $7.68 per gram), and manufactured sales averaged $28.70
By providing my email address, I agree to receive messages related to this story and agree to the Privacy Policy
But the cost on the shelf will not be the cost at the register. Ohio’s adult-use program includes a 10% excise tax on all non-medical purchases. Towns that permit dispensaries to operate within their borders receive 36% of this tax fund. Taxes also go toward a social equity fund, a substance abuse and addiction fund and more.
Sales tax is also applied to purchases. Ohio’s base sales tax rate is 5.25%, but counties can levy additional sales tax on purchases. In Montgomery County, the total tax rate as of this year is 7.5%. In Greene County, it’s 6.75%.
Potency, measurements
Under Ohio law, licensed dispensaries cannot sell cannabis grown or purchased outside of the state. Dispensaries have reported a drop in vendor prices since August.
“We saw a lot of price decreases from our vendors, which we pass along to the consumer,” said Stanley.
The price of dispensary cannabis is also impacted by its potency, Stanley said. Typically, the higher the THC content of a product, the higher the price. And high-potency products have been popular among new customers.
“While those who have been in the market for a long time know that there are a lot of factors that make a product ‘good’ besides just THC, new customers are searching for the highest THC possible,” Stanley said.
Ohio’s measurement system, too, may stand out to customers, Stanley said. Ohio dispensaries sell flower in one-tenth measurements. This differs from both other states with legalized cannabis and measurements in the illicit market, which typically sell a one-eighth ounce of marijuana to buyers.
“There’s definitely some confusion,” said Stanley. “It leads the consumer to feel like they are paying the price of a one-eighth but getting less.”
Neighboring states see sales
Ohioans passed Issue 2 in 2023, which permitted adults 21 and over to legally use and grow marijuana. Prior to the adult-use law going into effect, Michigan dispensaries were reporting a strong presence of Ohio-based customers.
It seems many residents of the Buckeye State are continuing to travel up north for their cannabis. Michigan has seen major growth over the past two years, with total sales reaching approximately $263.3 million in October 2024, according to cannabis industry tracker Headset.
Cannabis may be legalized in both Ohio and Michigan, but it’s still illegal under federal law — making the transfer of cannabis across state borders illegal.
Michigan, which launched its recreational program in 2019, is the second-largest cannabis market in the nation, according to Headset. The cannabis analysis firm also noted that Michigan stands out due to its lower average item price and higher unit sales growth.
The average price of a one-eighth ounce of flower in Michigan is $15.50 as of October, according to Headset. But Michigan also has a 10% excise tax and a sales and use tax on all retail orders — and these taxes are charged to customers regardless of their residency.
Ohio dispensary rules
Other states with years-old recreational cannabis programs have fully rolled out rules, while Ohio’s program is still in its infancy and continues to announce and clarify rules for adult-use.
But Ohio’s staggered rules for dispensaries also control what products dispensaries can sell, said Pure Ohio Wellness chief operating officer Tracey McMillin.
Many customers have been visiting their local dispensary in search of pre-rolled cannabis, but Ohio dispensaries aren’t permitted to sell them.
“I think there’s just been a lot of things that slowed down the take-off of this,” McMillin said. “We’re still doing well, and we’re still moving forward. But it hasn’t been an explosion.”
Pre-rolled cannabis made up $49.43 million in Michigan’s cannabis sales over the past two years, making them the second most profitable product, even outpacing cannabis vape products, according to Headset data.
“It is definitely a struggle for us as we await the final rules … but we are hoping the state gives us some guidance soon,” Stanley said.
This story appeared in the Dayton Daily News