There is a lot to consider for Ohio consumers of cannabis as we begin 2026 examining the fallout of a flurry of legislative moves happening at both at the state level and federally. From an Executive Order in Washington D.C. to Governor DeWine’s desk in Columbus, here is your breakdown of the policy changes and their potential impact on patients, consumers and the industry:
Federal Updates: The Path to Schedule III
Can the President reschedule cannabis all on his own?
No. He cannot. While President Trump issued an Executive Order on December 18, 2025, he does not have the authority to change the law with a single signature. Instead, his order directs the Attorney General and the DEA to expedite the formal process of moving cannabis from Schedule I to Schedule III that was initiated under the Biden administration in 2024.
Under the Controlled Substances Act, the executive branch must follow a specific legal process called rulemaking. This includes public comment periods and scientific reviews. While the administration is pushing for speed, they must still follow these administrative steps to ensure the change holds up in court.
Does Congress have to approve this?
The situation is a bit of a legal gray area. Congress gave the executive branch the power to schedule drugs back in 1970, so the DEA can technically move cannabis to Schedule III without a new vote in the House or Senate.
However, Congress still plays a massive role. Only Congress can fully remove cannabis from the controlled substances list (what’s known as descheduling). Read more on descheduling versus rescheduling in our previous article here.
What is the timeline?
The timeline for rescheduling is currently unknown. While some officials are aiming for a final rule in early 2026, legal challenges are almost guaranteed. These lawsuits could delay the actual implementation of Schedule III for several months or even years.
Ohio State Updates: Navigating Senate Bill 56
The most immediate changes for Ohioans come from Senate Bill 56 (SB 56), which was signed into law in late December. These rules modify the original Issue 2 passed by voters and are set to take effect in mid-March 2026.
What happened to THC beverages?
While the state legislature originally included a path for low-dose THC drinks to be sold in grocery stores and bars, Governor DeWine used a line-item veto to remove those sections. This means that for the foreseeable future, THC beverages can only be sold inside licensed dispensaries, just like flower or gummies.
Can I still grow my own plants?
Yes, but SB 56 adds new restrictions on where you can grow. The limit remains 6 plants per person and 12 per household, but you are now prohibited from growing in:
- Childcare centers (Type A or B).
- Halfway houses or community recovery centers.
- Rental properties where the landlord has explicitly banned it in the lease.
Where these specific types of residences have been singled out in the new legislation, the state has previously noted that you must own your residence or have permission from the owner to grow cannabis there. MedicateOH suggests renters carefully review their lease terms and expectations with their landlords before growing cannabis at home.
What about Seeds and Clones?
For those looking to start their home-grow under Ohio’s 2023 voter-approved limits, the options for purchasing seeds are currently in a state of transition due to the new SB 56 regulations and the looming federal deadline. State law explicitly allows dispensaries to sell plant material, including seeds and clones, but no licensed dispensaries in Ohio currently do. Whether any dispensaries will carry these in the future remains unclear.
Many enthusiasts participate in local seed swaps. Under Ohio law, you can transfer up to 6 plants (or seeds) to another adult, provided no money changes hands and the transfer isn’t advertised to the public.
Currently, some Ohioans use online seed banks to access thousands of varieties, including feminized and autoflower strains. However, this is about to change, too. Seeds are technically classified as “hemp” because they contain less than 0.3% THC, allowing for legal domestic shipping. A new federal provision (Section 781) was signed in late 2025 that redefines hemp to exclude any seeds from plants that could grow to be high-THC. After November 12, 2026, interstate shipping of most cannabis seeds will become federally illegal. If you prefer specific genetics from out-of-state breeders, you may want to secure them before this date.
Are there new penalties for out-of-state products?
Yes. SB 56 explicitly makes it illegal to possess cannabis in Ohio that was purchased in another state, such as Michigan. Even if the product is in its original packaging from a legal dispensary across the border, it is considered contraband under the new Ohio law.
Are potency levels changing?
The bill introduced a new cap on extracts and vapes. These products will now be limited to 70% THC (down from the previous 90% limit). Plant material (flower) will remain capped at 35% THC.
What will happen to hemp products and stores?
SB 56 also brings “intoxicating hemp” (like Delta-8 or THCa) under the same strict umbrella as medical marijuana.
- Labeling: All IHPs must now include clear serving sizes, total THC content, and a specific warning label regarding child safety.
- Testing: Products must be tested by state-approved labs to ensure they meet the same safety standards as dispensary-grade flower.
- Taxes: Licensed retailers must now remit a 10% excise tax on these products, mirroring the adult-use marijuana tax.
The Repeal Effort
Is there a way to reverse these changes?
Advocates are already moving to fight back. A group called Ohioans for Cannabis Choice officially filed a referendum petition. Their goal is to put a measure on the November 2026 ballot that would repeal the most restrictive parts of SB 56 and restore the original language of Issue 2.
What happens next?
- January 13, 2026: This is the deadline for Attorney General Dave Yost to decide if the petition summary is fair and truthful.
- The Signature Drive: If certified, the group will need to collect roughly 248,000 valid signatures by this spring. If they succeed, the challenged parts of SB 56 would be put on hold and would not go into effect until voters have their say in November.
How Could Ohio Cannabis Businesses Benefit from Rescheduling?
For industry readers, 2026 marks the beginning of a significant financial transition for Ohio cannabis businesses. The primary burden on the cannabis industry has been Internal Revenue Code Section 280E, which prevents the deduction of standard business expenses like you’d have in any other industry. Rescheduling would automatically remove this burden and potentially give operators a windfall.
Ohio operators we talked to have been consulting with tax professionals for some time to prepare for a possible mid-year transition. These changes could improve cash flow by up to 30 percent by allowing deductions for payroll, rent, and marketing. This could effectively function as a massive tax cut, allowing them to reinvest their gross profits into their employees and communities.
Lawmakers are also currently debating separate bills that would fix the 280E tax issue independently of when the DEA decides to act on rescheduling.
Would Rescheduling Spell the End for our Current Dispensaries?
The question of a “Big Pharma takeover” is one of the most debated topics in the industry today. While rescheduling creates a massive opportunity for pharmaceutical companies, a total “takeover” of your local dispensary isn’t a realistic immediate outcome.
Instead, we are likely to see the emergence of two parallel markets:
1. The Pharmaceutical Lane (FDA-Approved)
Rescheduling to Schedule III officially acknowledges that cannabis has medical value. This is the green light Big Pharma has been waiting for.
- Companies like Pfizer, AbbVie, and Jazz Pharmaceuticals already have FDA-approved cannabinoid isolates in synthetic forms. They won’t be selling flower; they will be developing patented cannabinoid drugs (pills, inhalers, or sprays) to treat specific conditions like epilepsy or MS.
- These products would eventually be covered by insurance, prescribed by doctors, and picked up at a local pharmacy like CVS or Walgreens.
2. The State-Regulated Lane (Dispensaries)
The current state-legal markets (like Ohio’s) operate under a different legal theory.
- State Protections: States have the right to regulate their own commerce. Schedule III doesn’t suddenly make your local dispensary a “pharmacy” or require the owner to have a pharmaceutical degree.
- Product Difference: Big Pharma typically doesn’t deal in “agricultural” products (whole flower). They deal in chemicals. The artisan flower, craft edibles, and community-focused culture of the current industry are difficult for massive pharmaceutical bureaucracies to replicate or manage.
- The Footprint: The massive footprint and lobbying power of Ohio’s already-established medical cannabis and adult use programs are likely to keep it protected from bans that other states might see.
Where the Takeover Could Happen
While Big Pharma might not buy your local dispensary, they could “squeeze” the industry in other ways:
- Acquisitions: Rather than building from scratch, pharmaceutical giants are likely to buy the largest Multi-State Operators (MSOs). This is the most realistic path for “Pharma money” to enter the space.
- Research Dominance: Because Big Pharma has billions of dollars, they can fund the massive clinical trials required for FDA approval. This could create a “tiered” medical system where “real” medicine is pharma-grade and everything else is seen as “wellness” or “recreational.”
- Lobbying: There is a risk that Big Pharma could lobby for stricter “medical” standards that only they can afford to meet, potentially pricing smaller growers out of the medical market.
The Bottom Line
Rescheduling is a “gateway” for Big Pharma, but it isn’t an eviction notice for the current industry. The most likely 2026 scenario is a “split” market–one that looks like a traditional pharmacy for standardized prescriptions, and one that looks like the current dispensary system for those who prefer whole-plant medicine and traditional cannabis products.
MedicateOH will continue to follow this story at both the state and federal level. Subscribe to our newsletter for updates.
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