Since Ohio launched its adult-use cannabis program in the summer of 2024, cannabis prices in the state have steadily decreased. According to state data, the prices for both flower and manufactured products have seen gradual reductions, as dispensaries navigate the challenges of a new market.
Price Trends Since the Launch
When Ohio’s recreational cannabis program began in August, the average price for a tenth of an ounce of cannabis flower was $26.59, with manufactured products averaging $31.06. As of last week, the price of the same amount of flower had dropped to $21.72 ($7.68 per gram), and the average cost of manufactured products had decreased to $28.70. This decline is reflective of both vendor pricing adjustments and ongoing efforts by dispensaries to pass savings onto consumers.Slow Start to the Adult-Use Program
Despite the positive trend in price reductions, the adult-use cannabis program has faced a slower-than-expected uptake. Local dispensaries, such as Terrasana in Springfield, reported increased traffic compared to pre-adult-use sales, but they noted that it has been less than forecasted. Factors such as consumer confusion, vendor costs, and Ohio’s specific program rules have contributed to the slower-than-anticipated launch.
Taxation Impact
In addition to base prices, the cost of cannabis purchases in Ohio is impacted by various taxes. Ohio applies a 10% excise tax on non-medical purchases, which is distributed between local governments and social equity initiatives. On top of this, a base sales tax of 5.25% is applied, with additional local taxes in some counties—such as Montgomery County (7.5%) and Greene County (6.75%).
Vendor Price Drops and Consumer Confusion
Dispensaries have reported receiving lower prices from vendors since the launch, a change that has been passed along to consumers. However, the pricing model in Ohio differs from those in other states, which may confuse new customers. For example, Ohio dispensaries sell cannabis in one-tenth ounce measurements, as opposed to the more common one-eighth ounce. This discrepancy leads some consumers to believe they are paying the same price as they would for a larger quantity, causing confusion.
Competition with Neighboring States
Ohio’s market faces significant competition from neighboring Michigan, where recreational cannabis has been legal since 2019. Michigan’s cannabis market has grown substantially, with total sales reaching $263.3 million as of October 2024. The average price of a one-eighth ounce of flower in Michigan is $15.50, significantly lower than Ohio’s prices, which could lead some Ohioans to continue traveling to Michigan for cannabis purchases.
