Nonetheless, operators are conserving their noses to the grindstone.
Multistate hashish operators proceed to have a look at growth alternatives in Ohio, regardless of a transparent glut of hashish merchandise.
U.S. hashish operator, AYR Wellness Inc. (OTCQX: AYRWF), introduced Wednesday that it plans to amass Twice the Wellness LLC in Woodmere, Ohio. The small print of the deal stay undisclosed, however Ayr expressed optimism about opening the dispensary, together with two extra in Riverside and Clermont County by the top of the yr, topic to regulatory approval.
“Ayr continues to concentrate on constructing a vertical presence in Ohio, a market the place we now have the power to construct appreciable depth and market share,” CEO David Goubert mentioned in a press release.
In the meantime, MSO large Trulieve Hashish Corp. (OTCQX: TCNNF) opened its first medical marijuana dispensary in Columbus on Tuesday, additional solidifying the pattern of hashish growth within the state.
The growth momentum contrasts sharply with the realities of Ohio’s hashish market, which at present faces evident oversupply. In keeping with information from the Ohio Division of Commerce, the quantity of marijuana flower prepared on the market and bulk flower held by suppliers has roughly doubled within the yr between June 2022 and June 2023.
The glut is affecting all product classes. Suppliers are promoting their merchandise at deep reductions to keep away from product expiration and to scale back stock ranges. The oversupply state of affairs has led to a drastic drop in wholesale hashish costs in Ohio, from $769 per pound within the first quarter of 2021 to $168 per pound by the top of 2022, a staggering 78% lower.
Whereas decrease costs are a boon for shoppers, they spell bother for hashish companies. Much like another states, plenty of these companies are actually promoting their merchandise at a loss, with the oversupply state of affairs forcing some to chop manufacturing strains and scale back overhead within the face of a stagnating affected person inhabitants.
Affected person rely within the state, which stands round 172,000 energetic contributors, has solely grown by 6% since final fall, when roughly 162,000 energetic sufferers had been registered.
Nonetheless, Ohio regulators stay unfazed by the present state of affairs, attributing their optimism to the rising variety of medical marijuana dispensaries within the state.
Jennifer Jarrell, spokesperson for the Ohio Division of Commerce, instructed Crain Cleveland that the state’s Medical Marijuana Management Program “constantly critiques key program metrics, together with product pricing, product stock, and cultivation capability.”
She added that the surge in operational dispensaries ought to drive up demand by offering sufferers with higher entry to merchandise.
The oversupply difficulty and stagnant affected person progress elevate questions concerning the implications of Ohio Senate Invoice 9. The proposed laws may scale back the variety of regulatory businesses, loosen some promoting restrictions, and authorize extra cultivation licenses.
Critics argue, nevertheless, that the very last thing an already oversupplied market wants is a rise in cultivation licenses. Moreover, the invoice would mandate new cultivators to attend a few years earlier than commencing cultivation. Multistate operator PharmaCann has launched into a media circuit these days to attract consciousness to the difficulty.
State information spotlight one other vital actuality: Simply 25% of the utmost mixed marijuana cultivation house of 1.85 million sq. ft permitted beneath present legislation is in use.
However operators are conserving their noses to the grindstone — conserving religion in potential measures such because the SAFE Banking Act, federal de-scheduling, medical marijuana affected person pool growth and potential leisure marijuana legalization within the state.
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