Chapter 1301:18-3 | Cannabis Entity Ownership

Rule 1301:18-3-01 | Cannabis Entity Distance from Prohibited Facilities.

• Effective: October 31, 2024
• Promulgated Under: 119.03

(A) Unless otherwise authorized pursuant to this rule, no cultivator, processor, testing laboratory, or dispensary shall be located within five hundred feet of the end boundaries of a parcel of real estate having situated on it a prohibited facility, as defined by rule 1301:8-1-01 of the Administrative Code.

(B) To determine compliance with paragraph (A) of this rule, the following applies:

(1) The distance shall be measured linearly; and

(2) The measurement shall occur at the shortest distance between the parcel line of the prohibited facility and the physical structure under the control of the cannabis facility.

(C) Paragraph (A) of this rule does not apply to the following:

(1) Cannabis entities issued a certificate of operation pursuant to Chapter 3796. of the Revised Code for the same licensed premises; and

(2) Any state university, academic medical center, or private research and development organization conducting research related to cannabis pursuant to research protocol approved by an institutional review board or equivalent entity.

(D) The division shall deny a request for a change in location or a request for cultivation area expansion that violates this rule.

A licensed entity that is issued a denial pursuant to this paragraph may submit a subsequent request for a change of location or cultivation area expansion that conforms with the mandates of this rule.

(E) An entity licensed pursuant to these rules may continue to operate in the event a prohibited facility is established within five hundred feet of the facility subsequent to the issuance of a provisional license or certificate of operation, provided the entity does the following:

(1) Notifies the division in writing; and

(2) Submits to the division any necessary modifications to ensure ongoing facility security and surveillance and public safety for review and approval.

Last updated October 31, 2024 at 9:34 AM

Supplemental Information

Authorized By: 3780.03, 3796.03
Amplifies: 3780.03, 3780.07, 3796.03, 3796.30
Five Year Review Date: 10/31/2029

Rule 1301:18-3-03 | Ownership, Financial Interest, and Control.

• Effective: November 1, 2024
• Promulgated Under: 119.03

(A) No person shall be issued more than:

(1) One cultivator provisional license or certificate of operation;

(2) One processor provisional license or certificate of operation; or

(3) Eight dispensary provisional licenses or certificates of operation.

(B) No person shall maintain ownership or a financial interest in more than:

(1) One cultivator provisional license or certificate of operation;

(2) One processor provisional license or certificate of operation; or

(3) Eight dispensary provisional licenses or certificates of operation.

(C) No person shall control more than:

(1) One cultivator provisional license or certificate of operation;

(2) One processor provisional license or certificate of operation; or

(3) Eight dispensary provisional licenses or certificates of operation.

(D) With regard to testing laboratories:

(1) No person shall be issued more than one testing laboratory provisional license or certificate of operation;

(2) No person shall maintain ownership or a financial interest in more than one testing laboratory provisional license or certificate of operation;

(3) No person shall control more than one testing laboratory provisional license or certificate of operation;

(4) No person shall be issued a testing laboratory provisional license or certificate of operation, or maintain ownership, financial interest, or control in a testing laboratory provisional license or certificate of operation and do any of the following:

(a) Acquire a provisional license or certificate of operation for any other cannabis entity licensed pursuant to this chapter;

(b) Maintain ownership or financial interest in any other cannabis entity licensed pursuant to this chapter;

(c) Control any other cannabis entity licensed pursuant to this chapter; or

(d) Share any corporate officers or employees with any other cannabis entity licensed pursuant to this chapter.

Last updated November 1, 2024 at 3:23 AM

Supplemental Information

Authorized By: 3780.03, 3796.03
Amplifies: 3780.03, 3780.10, 3780.11, 3796.03, 3796.09, 3796.10
Five Year Review Date: 11/1/2024

Rule 1301:18-3-04 | Disclosure of Ownership, Financial Interest, and Control.

• Effective: November 1, 2024
• Promulgated Under: 119.03

(A) Pursuant to Chapter 1301:18-2 of the Administrative Code, each applicant shall submit to the division all of the following:

(1) Applicant's ownership list and capitalization table;

Each applicant shall identify any person who has a ten percent or greater ownership interest within the applicant's ownership structure.

(2) An organizational chart identifying all owners, officers, and board members of the applicant;

(3) For each proposed owner, officer, and board member:

(a) Full legal name;

(b) Address;

(c) Date of birth, evidencing the individual is at least twenty-one years of age or older;

(d) The individual's proposed role with the applicant; and

(e) If applicable any ownership, financial interest, or control in any other cannabis entity.

(4) For any instance in which the applicant or any person associated with the applicant is currently or was previously licensed or authorized in another state or jurisdiction to cultivate, produce, test, dispense, or otherwise deal in the distribution of marijuana in any form, the following:

(a) A statement granting permission to contact the regulatory agency that granted the license, accompanied by the contact information, to confirm the information contained in the application; and

(b) If the license, authorization, or application was ever fined, denied, suspended, revoked, or otherwise sanctioned, a copy of documentation so indicating, or a statement that the applicant was so licensed and was never sanctioned.

(5) A list of any person with a direct or indirect financial interest in, the applicant;

(6) A list of any person with direct or indirect control over, the applicant;

(a) This applies to any current or future right to control.

(7) A list of any of the following regardless of whether they meet the definition of ownership, financial interest, or control:

(a) Option agreement, debt conversion, or other agreement which creates a current or future right in equity in the applicant.

(b) Disclosure pursuant to this rule is mandatory regardless of whether such modification is contingent upon certain acts or omissions.

(8) A copy of any pending or executed merger, sale, option to purchase, letter of intent, consulting, management, support, administrative services, or other similar agreements between applicant and any other person or that person's affiliates; and

(9) Any other documentation evidencing the ownership structure, financial interest, or control of the applicant.

(B) At least thirty calendar days prior to the issuance or renewal of a certificate of operation, each licensee shall review all documentation provided under paragraph (A) of this rule.

(1) Each licensee shall ensure all information remains true, accurate, and complete as of the date of the review.

(2) Each licensee shall submit to the division evidence of compliance with this paragraph and include the following:

(a) The date of the review;

(b) Updated documentation containing all information mandated under paragraph (A) of this rule; and

(c) Certification by a third-party, independent licensed auditor or certified public accountant attesting all documentation propounded is true, accurate, and complete representation of the information contained therein.

Last updated November 1, 2024 at 3:23 AM

Supplemental Information

Authorized By: 3780.03, 3796.03
Amplifies: 3780.03, 3780.10, 3780.11, 3796.03, 3796.09, 3796.10
Five Year Review Date: 11/1/2024

Rule 1301:18-3-05 | Notice of Intent.

• Effective: November 1, 2024
• Promulgated Under: 119.03

(A) Except as mandated under rules 1301:18-3-06 and 1301:18-3-07 of the Administrative Code, a licensee may modify its ownership, financial interest, or control without prior approval by the division.

(B) Prior to entering into any agreement, a licensee shall provide written notice to the division of its intent to create or modify the following:

(1) Licensee's ownership list and capitalization table as outlined under paragraph (A)(1) of rule 1301:18-3-04 of the Administrative Code;

(2) Licensee's organizational chart identifying all owners, officers, and board members of the applicant as outlined under paragraph (A)(2) of rule 1301:18-3-04 of the Administrative Code;

(3) The list of any person with a direct or indirect financial interest in, the licensee as outlined under paragraph (A)(5) of rule 1301:18-3-04 of the Administrative Code;

(4) The list of any person with direct or indirect control over, the licensee as outlined under paragraph (A)(6) of rule 1301:18-3-04 of the Administrative Code;

(5) The list of any of the following regardless of whether they meet the definition of ownership, financial interest, or control:

(a) Option agreement, debt conversion, or other agreement which creates a current or future right in equity in the applicant.

(b) Disclosure pursuant to this rule is mandatory regardless of whether such modification is contingent upon certain acts or omissions.

(C) Each licensee shall submit to the division any accompanying documentation evidencing any modification as outlined under this rule.

Last updated November 1, 2024 at 3:23 AM

Supplemental Information

Authorized By: 3780.03, 3796.03
Amplifies: 3780.03, 3780.10, 3780.11, 3796.03, 3796.09, 3796.10
Five Year Review Date: 11/1/2024

Rule 1301:18-3-06 | Change of Ownership.

• Effective: November 1, 2024
• Promulgated Under: 119.03

(A) A licensee shall not modify its ownership without prior approval from the division, provided modifications involving less than ten per cent of the ownership in a licensee do not mandate prior approval.

For purposes of this rule, all changes of ownership that occur within a given calendar year shall be calculated in the aggregate.

(B) Prior to any proposed change, a licensee shall apply on a form prescribed by the division and demonstrate all of the following:

(1) The licensee's current:

(a) Ownership list and capitalization table;

Each applicant shall identify any person who owns ten per cent or greater ownership interest within the applicant's ownership structure;

(b) Ownership structure;

(c) Organizational chart identifying all owners, officers, and board members of the applicant; and

(d) Any supporting documentation evidencing the mandates outlined under this paragraph.

(2) The licensee's proposed:

(a) Ownership list and capitalization table;

Each applicant shall identify any person who owns ten per cent or greater ownership interest within the applicant's ownership structure.

(b) Ownership structure;

(c) Organizational chart identifying all owners, officers, and board members of the applicant; and

(d) Any supporting documentation evidencing the mandates outlined under this paragraph.

(3) Every proposed owner has submitted one of the following:

(a) Verification of an active employee badge pursuant to rule 1301:18-3-09; or

(b) Both of the following:

(i) An application for an employee badge pursuant to rule 1301:18-3-09 of the Administrative Code; and

(ii) Evidence showing that the proposed owner has submitted fingerprints to the Ohio bureau of criminal identification and investigation for an Ohio and federal criminal records check within the past sixty calendar days.

(4) For any instance in which a proposed owner, or any person associated with the proposed owner, is currently or was previously licensed or authorized in another state or jurisdiction to cultivate, produce, test, dispense, or otherwise deal in the distribution cannabis in any form, the following:

(a) A statement granting permission to contact the regulatory agency that granted the license, accompanied by the contact information, to confirm the information contained in the application; and

(b) If the license, authorization or application was ever fined, denied, suspended, revoked or otherwise sanctioned, a copy of documentation so indicating, or a statement that the applicant was so licensed and was never sanctioned.

(c) This paragraph does not apply to proposed owners who are all of the following:

(i) An active employee badged pursuant to rule 1301:18-3-09 of the Administrative Code;

(ii) A current owner, as outlined in the documentation submitted pursuant to paragraph (B)(1) of this rule; and

(iii) A proposed owner, as outlined in the documentation submitted pursuant to paragraph (B)(2) of this rule.

(5) Any proposed owner meets all ownership, financial interest, and control requirements under rule 1301:18-3-04 of the Administrative Code;

(6) The licensee shall remain in compliance with all other licensure mandates outlined under this chapter; and

(7) Payment of the requisite fee pursuant to rule 1301:18-2-09 of the Administrative Code.

(C) A proposed change of ownership shall not be effective unless and until approved in writing by the division.

Last updated November 1, 2024 at 3:23 AM

Supplemental Information

Authorized By: 3780.03, 3796.03
Amplifies: 3780.03, 3780.10, 3780.11, 3796.03, 3796.09, 3796.10
Five Year Review Date: 11/1/2024

Rule 1301:18-3-07 | Change of Entity Name or Registered Trade Name.

• Effective: November 1, 2024
• Promulgated Under: 119.03

(A) A licensee shall not use an entity name or registered trade name without prior written approval from the division.

(B) Prior to any proposed change, a licensee is to apply on a form prescribed by the division and demonstrate all of the following:

(1) The proposed entity name or registered trade name, and any supporting documentation evidencing the licensee's registered use of the name;

(2) That the proposed entity name or registered trade name change does not constitute a change of ownership; and

(3) Any other supporting documentation evidencing compliance with this chapter.

Last updated November 1, 2024 at 3:23 AM

Supplemental Information

Authorized By: 3780.03, 3796.03
Amplifies: 3780.03, 3780.10, 3780.11, 3796.03, 3796.09, 3796.10
Five Year Review Date: 11/1/2024

Rule 1301:18-3-08 | Financial Responsibility.

• Effective: October 31, 2024
• Promulgated Under: 119.03

(A) Prior to the issuance or renewal of a certificate of operation, each licensee shall acquire and maintain evidence of financial responsibility as outlined under this rule.

(B) Financial responsibility maintained pursuant to this rule may be payable to the division in the event a licensee fails to comply with any mandates under this chapter.

(C) Each licensee shall evidence financial responsibility by acquiring and maintaining both of the following:

(1) Commercial general liability insurance covering products liability through an insurance company authorized to conduct business within the state of Ohio; and

(2) One of the following:

(a) An escrow account with a chartered financial institution within the state of Ohio acting as the escrow agent, in the amount as follows:

(i) Level one cultivators: seven hundred fifty thousand dollars

(ii) Level two cultivators: seventy-five thousand dollars

(iii) Processors: two hundred fifty thousand dollars

(iv) Testing laboratories: seventy-five thousand dollars

(v) Dispensaries: fifty thousand dollars

(vi) The escrow terms shall include the following:

(a) The licensee's business name and license number issued by the division; and

(b) Preclusion of the financial institution to release or return any escrow funds maintained pursuant to this rule without prior written authorization by the division.

(b) A surety bond executed by a corporate surety company licensed by the state of Ohio and authorized to execute surety bonds pursuant to Chapter 3929. of the Revised Code naming the licensee as the principal of the bond, in the amount as follows:

(i) Level one cultivators: seven hundred fifty thousand dollars

(ii) Level two cultivators: seventy-five thousand dollars

(iii) Processors: two hundred fifty thousand dollars

(iv) Testing laboratories: seventy-five thousand dollars

(v) Dispensaries: fifty thousand dollars

(vi) The bond terms shall include the following:

(a) ) The licensee's business name and license number issued by the division; and

(b) Preclusion of the surety to cancel a bond maintained pursuant to this rule without prior written authorization by the division.

(c) In the event that a licensee's escrow funds are released, or a bond is cancelled, the licensee shall immediately submit evidence of financial responsibility to the division on or before the effective date of cancellation.

(D) A licensee may petition the division to reduce its financial responsibility maintained pursuant to paragraph (C) of this rule in the amount as follows:

(1) Level one cultivators: two hundred fifty thousand dollars

(2) Level two cultivators: twenty-five thousand dollars

(3) Processors: seventy-five thousand dollars

(4) Testing laboratories: twenty-five thousand dollars

(5) Dispensaries: fifteen thousand dollars

(E) The division will approve a licensee to reduce its financial responsibility in the amount outlined in paragraph (D) of this rule if all of the following are met:

A determination by the division that for a period of one calendar year, the licensee:

(1) Remained fully operational without substantial interruption; and

(2) Demonstrated compliance with all mandates of this chapter and Chapters 3780. and 3796. of the Revised Code.

(F) The division will approve a licensee to further reduce its financial responsibility in the amount outlined in paragraph (D) of this rule if all of the following are met:

A determination by the division that for a period of two consecutive calendar years, the licensee:

(1) Remained fully operational without substantial interruption; and

(2) Demonstrated compliance with all mandates of this chapter and Chapters 3780. and 3796. of the Revised Code.

(G) A licensee may petition the division to terminate its financial responsibility. The division will approve a request pursuant to this paragraph if it determines that that for a period of three consecutive calendar years, the licensee:

(1) Remained fully operational without substantial interruption; and

(2) Demonstrated compliance with all mandates of this chapter and Chapters 3780. and 3796. of the Revised Code.

Last updated October 31, 2024 at 9:34 AM

Supplemental Information

Authorized By: 3780.03, 3796.03
Amplifies: 3780.03, 3780.11, 3796.03, 3796.09, 3796.10
Five Year Review Date: 10/31/2029

Rule 1301:18-3-11 | Facility Visitors.

• Effective: October 31, 2024
• Promulgated Under: 119.03

(A) Upon entering the premises of a licensed entity, all facility visitors must:

(1) Provide valid, government issued photographic identification evidencing that they are twenty-one years of age or older;

(2) Obtain a visitor badge, to be visibly displayed at all times, and returned upon their departure; and

(3) Escorted and monitored by an assigned registered employee at all times.

(B) Each licensee shall maintain a visitor log memorializing all facility visitors that enter the licensed premises. The visitor log will include all of the following information for each visitor:

(1) Full legal name of the visitor;

(2) The date and time of the visitor's arrival and departure;

(3) The employee assigned to escort visitor; and

(4) The purpose of the facility visit.

Last updated October 31, 2024 at 9:34 AM

Supplemental Information

Authorized By: 3780.03, 3796.03
Amplifies: 3780.03, 3780.20, 3796.03
Five Year Review Date: 10/31/2029

Rule 1301:18-3-12 | Waste Disposal.

• Effective: October 31, 2024
• Promulgated Under: 119.03

(A) All licensees shall destroy and dispose of all excess, unwanted, outdated, deteriorated, adulterated, or misbranded cannabis under video surveillance and in a manner as to render the cannabis unusable and non-retrievable.

(B) All cannabis intended for destruction shall be weighed and recorded into the state inventory tracking system, separated from other viable inventory intended for distribution, and maintained in a secure location.

(C) Cannabis intended for disposal shall be weighed and recorded into the statewide inventory tracking system.

(D) Pursuant to paragraph (A) of this rule, cannabis shall be rendered unusable and non-retrievable by grinding and incorporating the waste with one or more of the following materials such that the resulting mixture is at least fifty-one per cent non-cannabis waste:

(1) Paper waste;

(2) Cardboard waste;

(3) Food waste;

(4) Yard or garden waste;

(5) Grease or other compostable oil waste;

(6) Bokashi, or other compost activators; or

(7) Any other waste as approved by the division.

(E) Licensed entities shall conduct all cannabis destruction and disposal in a secure, limited access area that is surveilled and accessible only to registered employees.

(F) In addition to paragraph (C) of this rule, all licensed entities shall maintain records of all cannabis destruction and disposal in accordance with rule 1301:18-3-16 of the Administrative Code and memorialize the following information for each occurrence:

(1) Manner of destruction;

(2) Rationale for destruction;

(3) Date and time of disposal;

(4) The volume or weight of the associated waste; and

(5) If applicable

(a) The registered strain or product name and form;

(b) The date of production or removal from production;

(c) Assigned state inventory tracking information.

(G) Licensed entities shall ensure that all other non-cannabis waste, including hazardous materials, is disposed of in a manner consistent with state and federal law. For purposes of this rule, non-cannabis waste includes the following:

Stalks, stems, fan leaves, or roots of the cannabis plant.

Last updated October 31, 2024 at 9:34 AM

Supplemental Information

Authorized By: 3780.03, 3796.03
Amplifies: 3780.03, 3780.20, 3796.03
Five Year Review Date: 10/31/2029