Keeping up with cannabis laws can feel overwhelming, especially if you’re a budtender working behind the counter every day or a consumer trying to figure out what you can buy now. With both federal and state laws changing rapidly, MedicateOH explains what’s happening with policy and regulations.
Federal Cannabis Updates: DEA Rescheduling and Hemp Rules
Has cannabis been rescheduled?
The federal government moved just medical cannabis from Schedule I down to Schedule III under the Controlled Substances Act earlier this year. Moving it to Schedule III officially recognizes that cannabis has accepted medical uses. The federal framework established a direct registration path specifically for medical cannabis businesses operating under state licenses. The DEA introduced specific forms tailored for state-licensed operators. So far, participation appears to be an optional, state-level choice depending on whether a business qualifies and wants federal recognition.
What about for adult-use?
The Drug Enforcement Administration was set to review reclassification to adult-use (recreational) cannabis as well. However, procedural delays have slowed progress. Opponents of cannabis reform requested additional witness testimony and documents. At the same time, the DEA Chief Administrative Law Judge paused proceedings to review a Government Accountability Office report. These steps put final administrative decisions on hold while legal arguments continue.
Congress Closes the Federal Hemp Loophole and Restricts Seeds
What was the “hemp loophole”?
In 2018, Congress passed the Farm Bill to support industrial hemp, defining legal hemp as cannabis with 0.3% Delta-9 THC or less by dry weight. Lawmakers specifically named Delta-9 THC, leaving out other psychoactive compounds like Delta-8 THC and THCA. Manufacturers quickly noticed the policy error and capitalized upon this “loophole”, using hemp to make a wide variety of intoxicating gummies, vapes, and THC drinks. Gas stations, convenience stores, breweries, bars and other retailers began selling these unregulated products nationwide.
How is Congress fixing it, and what happens to cannabis seeds?
To close this loophole, Congress passed the 2026 Extensions Act (H.R. 5371), which includes strict new federal definitions. The law measures Total THC now (including THCA and all psychoactive isomers) capped at 0.3% and restricts finished products to 0.4 milligrams of THC per container.
Crucially, the new federal law also targets cannabis seeds. Under the updated federal rules, seeds will be excluded from the definition of legal hemp and classified as a controlled substance if they possess the “genetic potential” to produce a plant that exceeds 0.3% Total THC. Because most high-potency strains bred by home growers or seed banks exceed this threshold, interstate mail-order seed sales will effectively become illegal.
When does this take effect?
A stopgap funding bill signed on September 2, 2026 means the law will officially take effect on December 11, 2026. Seeds legally acquired and in your possession prior to that date are not retroactively criminalized (“grandfathered in”), so it may be a good time to stock up.
What did Ohio voters originally approve?
When Ohio voters passed Issue 2 in November 2023, in addition to legalizing, the measure created a Cannabis Social Equity and Jobs Program. This aimed to help communities impacted by prohibition through three core pillars:
- Reserved Licenses: 40 Level III craft cultivator licenses and 50 dispensary licenses would be set aside for “social equity” applicants.
- Dedicated Funding: 36% of adult-use excise tax revenue from cannabis sales would be dedicated to the social equity and jobs program.
- Non-Discrimination Protections: Legal safeguards preventing prior cannabis convictions from being used against license applicants.
What did Senate Bill 56 change?
In late 2025 and early 2026, state lawmakers argued extensively over rewrites to the cannabis law that voters approved. Because the Ohio General Assembly had the legal authority to revise the statute, conservative lawmakers tried to reverse much of the law—and had a majority of votes to get their way. The bill’s details were fiercely debated, with democratic lawmakers eventually negotiating away some components to safeguard other liberties like home grow. Here’s what got scrapped:
- Level III Cultivators: The Level III micro-business tier was written out.
- Dispensary Set-Asides: Reserved equity dispensary licenses were eliminated.
- Revenue Redirected: The 36% excise tax share for social equity was removed, along with a 25% share for substance abuse treatment. Tax revenues were redirected to the general fund, local community host funds, and the dirty trick we wrote about here.
- Non-Discrimination Repealed: Legal protections for applicants with past cannabis convictions were removed.
Could conservative lawmakers have been echoing republican federal policy when they stripped the Ohio cannabis social equity program from SB 56?
Conservative lawmakers in Ohio who supported stripping the Cannabis Social Equity and Jobs Program from Senate Bill 56 (SB 56) echoed broad Republican policy stances at both the federal and state levels. The decision to eliminate social equity set-asides and targeted tax revenue reallocations directly aligns with core conservative federal policy philosophies and national Republican governance priorities. A foundational Republican principle is fiscal discipline—specifically avoiding dedicated earmarks for government social programs in favor of directing state funds toward general revenue and law enforcement.
Did citizens try to fight back?
A citizen referendum drive attempted to put SB 56 on the ballot to restore the Issue 2 framework, but organizers fell short of the signature threshold in early 2026. The best way advocates can act right now to protect their rights with regards to cannabis is to research and vote out specific local legislators who attempted to thwart what citizens approved. Election Day is November 3rd.
The Micro-business Gap and MSO Domination
Why were Level III licenses important, and who were they meant for?
At 5,000 square feet of canopy, Level III was designed as an accessible, affordable entry point for small business entrepreneurs. It was created as a “social equity” for certain groups locked out of expensive Level I and II licenses. That should have paved a path for minorities, women, people who did jail time for cannabis in the past, caregivers, veterans, and home growers wanting to legally transition from hobbyist to commercial grower.
What would the fees have been for a Level III license?
While the exact fee schedule was ultimately dismantled when the tier was abolished, the original structure under Issue 2 was explicitly designed to be low-barrier for small business owners. By comparison: Ohio’s Level II commercial licenses require a $2,000 application fee and an $18,000 initial certificate fee, and $50,000 in liquid capital, while Level I commercial licenses demand a $20,000 application fee, $180,000 license fee, and $500,000 in liquid capital.
Ohio Cannabis News: How Senate Bill 56 Reshaped the State Market
Market Competition
How does this affect market competition?
Without low-barrier Level III licenses, craft growers, legacy cultivators, and small retail operators have been left out of Ohio’s legal cultivation market. As a result, commercial cultivation remains dominated by large multi-state operators (MSOs). While licenses are changing hands all the time, at least 13 dispensary-hosting counties have only MSO-operated stores. This means less variety for patients and consumers, along with less competition to drive down prices.
A lawsuit against 9 of these MSOs alleging cartel-like collusion is still pending. Several defendants (including Green Thumb and Cresco) issued statements denying the allegations and vowing to defend themselves in court.
As of late 2026, the MSO “cartel” lawsuit remains in the pre-trial discovery stage in Franklin County. Regardless of the final trial outcome, the lawsuit has forced MSOs to audit their supply-chain contracts and has brought legal scrutiny to shelf-space access for independent Ohio craft brands.
Is OHCann a “cartel”?
No. OHCann (as far as we can tell) is a legally-operating trade organization supporting the state’s cultivators, processors, dispensaries, and testing labs. They operate a Political Action Committee (PAC) to assist in politicking since corporations and their members cannot legally directly influence policy.
PACs collect dues from their member companies to hire lobbyists to form relationships with influential committee members on both sides of the aisle that regulate their industry. If ethically done, the intention is to help them better understand the details of the bills that they’ll be voting on so that the legislator makes a more informed and equitable decision. To get their attention, this might mean a campaign contribution or other gift. While commonplace in pretty much ever industry, dangling money to sway votes in legislature toward regulations that benefit the financial interests of certain dues-paying corporations is at least controversial and sometimes illegal, depending on how it’s carried out.
Because all of these donations need to be made on public record, there’s less incentive to make improper contributions. But it does happen.
Did the legal industry squash the hemp industry?
Much like employee unions, PACs represent a wide range of interests and being a member of one doesn’t imply that all members agree on what moves are made. OHCann represents both large MSOs and small independent licensees, whose priorities often clash. Some OHCann members hold significant financial interests in both the legal and hemp industries, so there’s no indication that there was a coordinated industry effort to squash hemp.
The hemp industry (at both state and federal levels) also donates heavily to PACs and continues to fight the hemp loophole closure that is predicted to wipe out 70 percent of the industry. Their work becomes incredibly important in safeguarding access to isolated non-intoxicating cannabinoid products like cannabidiol (CBD).
Intoxicating Hemp and Updated Product Limits
What’s happening with intoxicating hemp products now?
Senate Bill 56 banned intoxicating hemp sales statewide. All THC products must now pass through state testing, use seed-to-sale tracking (Metrc), and be carried exclusively at state-licensed dispensaries.
Hemp beverages and other intoxicating products were ordered removed from shelves in March. If you see them in stores still, it is likely one of ten companies that sued and received an temporary injunction to keep selling them until the legal fight is settled. The injunction is not a statewide blanket green light for all hemp brands. It protects only the products manufactured or distributed by those 10 plaintiff companies (and the retailers/bars stocking their products) while the court case proceeds.
What are the latest product menu rules?
State regulators recently enforced new rules for adult-use packages:
- Flower Packaging: Capped at 1 ounce per package.
- Vape Devices: Capped at 2 grams per device, with no more than 3 devices per package.
- Edibles: Capped at 10 mg per serving for adult-use (100 mg total per package). We wrote more about that here.
- Concentrates: Extracts are capped at 70% THC (down from 90%), while flower is capped at 35% THC.
Medical Cannabis Cardholders: Limits remain higher, spelled out in the Metrc Category Updates Guidance Chart.
Can cannabis be delivered to my house in Ohio?
No, but it’s coming soon! Regulations are currently being written for delivery procedures. This service will only be available for medical cardholders. Get a med card now or renew.
Public Smoking Rules and Possession Limits
What are the legal possession limits in Ohio?
Ohio adults 21 and older can legally possess up to 2.5 ounces of flower and 15 grams of concentrates at a time. Dawson Holtzclaw’s latest Ohio Cannabis Column discusses the perils of homegrowers’ considerations about this part of the law.
Is public consumption allowed?
Bringing cannabis into Ohio from out of state remains illegal, and SB 56 doubled-down on that. Smoking or vaping cannabis in public spaces is also prohibited. Because state regulators have not established rules for public consumption lounges, legal consumption is restricted almost entirely to private property with owner permission.
Where can I search for a job in the Ohio cannabis industry?
MedicateOH updates a list of new jobs for the Ohio industry weekly here. Networking is also a great way to land a job. We invite prospects to join us for our monthly meetups, which you can find by subscribing to our newsletter. Our next one is October 27th in Cincinnati at Stanley’s Pub.
Have an Ohio cannabis question we didn’t answer? Email us about it here.
