Hempheads rejoice! In a far shorter period of time than anticipated, the Ohio Department of Agriculture has issued draft regulations for hemp cultivation and processing and opened them up to public comment until October 30, 2019.

https://agri.ohio.gov/wps/portal/gov/oda/divisions/legal-office/news-and-events/requestforpubliccomment-hemp.

So, for all those ready to get into the cultivating and processing game in Ohio, what do these proposed rules mean for those who want to get into this 4.63 billion dollar industry?

Hemp seeds in a bowl and hemp leaves

 

So much easier than Medical Marijuana

It’s impossible to overstate the differences in ease of access between those in the medical marijuana program and the hemp program. Among the biggest differences: No limitations on the number of licenses issued, substantially reduced fees and costs for entry, and substantially reduced requirements for applicants at every step of the application process.

 

Fees? What fees?

Let’s start with the lowest barrier to entry issue, the fees to get in the game. A level two medical marijuana cultivator would need $40,000.00 in fees just to get started, consisting of a $2,000.00 initial application fee, an $18,000.00 initial license fee, and a $20,000 annual license renewal fee. By contrast, a hemp cultivator only needs $100.00 for the license application and $500.00 for each growing location.

To put that in perspective, a 6,000 square foot marijuana cultivator license will run you $40,000.00. If you want to grow hemp, the current regulations have NO LIMITATION on the size of your grow operation, it just has to be contiguous, and the total costs will only be $600.00 (excluding harvest inspection fees).

 

What’s my timeline?

YOU DON’T HAVE MUCH TIME TO GET YOUR APPLICATION IN. While the regulations do provide for a variance from the initial time, cultivators are only going to have until March 31, 2020, to get their applications in. Applications, in theory, are going to open on November 1, 2019.

 

No provisional licenses

The other big difference is that we don’t have any “provisional” licenses that can be issued the way we did for medical marijuana. With the provisional system, an applicant did not actually have to be capable of operating at the time of application. This was, in part, to accommodate the truly extraordinary capital expenditures that would need to be made prior to operation.

The hemp regulations, unlike the medical marijuana system, don’t have any provisional licenses. Instead, you either have a license, or you don’t. Especially for processors, this means you’ll have to have your whole system up and running, and pass inspection, before you can get your license issued.

The rules don’t go into detail about what happens to your application if you aren’t able to be up and running at the time of your application, so we don’t yet know the consequences of applying without your location and/or processing center. However, with the low cost of initial application, there doesn’t appear to be any kind of downside to filing within the application window, even without all of your ducks in a row, and then finishing up the process of getting operational later.

 

 

This article is meant to be utilized as a general guideline for hemp rules in Ohio. Nothing in this blog is intended to create an attorney-client relationship or to provide legal advice on which you should rely without talking to your own retained attorney first.  If you have questions about your particular legal situation, you should contact a legal professional.

Nick Weiss of the Gertsburg Law Firm can be reached at 440-528-1233 or nweiss@gertsburglaw.com.

 

Be sure to check out “Mind Your Cannabusiness with Nick Weiss”, a series of legal talks focusing on different sectors of the expanding cannabis industry in Ohio, including medical marijuana, hemp, and CBD. Future episodes are currently being recorded, and you can follow Gertsburg Law Firm on Facebook, LinkedIn, or Twitter to be notified when new articles and interviews are posted by Nick and our experienced attorneys.