Representative Callender Provides Sponsor Testimony on Legislation to Support Orphaned Cannabis Processors

COLUMBUS - Today, State Representative Jamie Callender (R-Concord) provided sponsor testimony on House Bill 611 (Callender/Stewart) in the House Judiciary Committee, marking the General Assembly's first hearing on a bill addressing the adult use industry since the passage of Senate Bill 56 (S. Huffman, 136th General Assembly). House Bill 611 would provide a cultivation license as well as dispensary licenses to Ohio's stand-alone cannabis processors, often referred to as orphaned processors, aligning them with the majority of the cannabis processors in the state.

Originally created under House Bill 523 (S. Huffman, 131st General Assembly), Ohio's medical marijuana program divided licenses into three categories: dispensaries responsible for acting as the retail part of the program, cultivators responsible for growing the cannabis, and processors responsible for turning the raw cannabis into the products sold at the dispensaries. Since the bill's passage in 2016, state law now allows for the sale of products without processor involvement, and all of Ohio's cannabis cultivators have become vertically integrated, meaning they own a cultivator, processor, and at least one dispensary, leaving 14 processors without a corresponding cultivator.

To address the orphan processors' concerns about access to product and to increase supply to the market, House Bill 611 grants a cultivation license to the orphaned processor following a successful application to the Division of Cannabis Control. This allows the orphaned processors to build up to 5,000 sq. ft. of cultivation space. Additionally, House Bill 611 provides the orphaned processors up to two dispensary licenses.

"We would like to thank the bill sponsors for their support in introducing this long overdue legislation," said Jason Kabbes, co-founder and CEO of Diamon Science LLC. "The orphaned processors of Ohio have for too long been left out of the Ohio cannabis supply chain, with no fair or dependable access to supply or demand, all while paying higher annual license fees. This narrowly focused corrective action allows a small number of Ohio-based small businesses, that have been stakeholders since the Program's inception, to finally participate and compete on a level playing field, as the legislature originally intended."

"Ohio's day-one small business stand-alone processors urgently need cultivation and retail licenses, as this crucial vertical integration is the only path to achieving sustainability and independence while ensuring a consistent, diverse variety of products for patients and consumers," said Emilie Kelleher (Ramach), Vice President of Business and Government Affairs with Beneleaves. "This self-sufficiency will allow small, local, Ohio-owned businesses like us to manage the entire supply chain and lower operating costs, leading to more affordable products and greatly improved patient access across Ohio."

House Bill 611 comes following the passage of Senate Bill 56 and marks the beginning of the next wave of cannabis legislation building upon the foundations established for Ohio's cannabis industry in House Bill 523, Senate Bill 56, and Issue 2.

"House Bill 611 comes following years of discussion and debate between members of the cannabis industry, advocates, and legislators," said Callender. "This bill marks the continuation of the efforts began by Issue 2 to create a strong, mature, and legal cannabis market in Ohio. By supporting the orphan processors, we will keep good paying jobs across the state while increasing the supply into the market, driving down costs for consumers and undermining illicit sellers."

House Bill 611 now awaits additional hearings in the House Judiciary Committee.