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The 2018 Farm Bill legalized CBD products with 0.3% THC concentration or less at a federal level. However, in the same year, Ohio authorities pushed back on this law, requiring CBD products to be sold in medical cannabis facilities only, restricting the ability for other retailers to benefit from the budding CBD market. Fortunately, in 2019, Senate Bill 57 (SB 57) decriminalized CBD and legalized the selling of legal CBD products, paving the way for entrepreneurs to begin marketing cannabinoid products to Ohio consumers.[1]Friedman & Nemecek, L.L.C. “Is CBD Legal In Ohio? The Lesser Known Cannabinoid & State, Federal Laws“. Accessed on September 28, 2023.
However, starting a CBD business in Ohio isn’t as straightforward as starting a traditional enterprise. The state’s CBD industry comes with its own set of licensing requirements, rules, and regulations that must be adhered to strictly to avoid any financial or legal repercussions. Nonetheless, Ohio has evolved into a CBD-friendly state, presenting a favorable environment for launching a new CBD company—provided one knows how to start off correctly.
This guide explores how to start a CBD business in Ohio, how to obtain a CBD license in Ohio, laws and regulations for selling CBD in Ohio, and other relevant topics.
How to Start a CBD Business in Ohio
Before you start selling CBD products to customers in Ohio, it’s critical to build the foundations of a strong business. Start by choosing a business structure suitable to your business’s needs. While you can sell CBD products as a sole trader, it leaves you open to liability issues and other potential pitfalls. Many CBD business owners choose to incorporate limited liability companies (LLCs) because they offer added liability protection.
You must register your business on the Ohio Secretary of State website. Next, apply for an Employer Identification Number (EIN) on the IRS website. This EIN not only enables your business to hire staff but also serves as an identification number for banks, creditors, and other financial entities.
Additionally, it’s vital for your CBD business to have a dedicated business bank account. Such an account not only defines personal and business expenses but also aids in building business credit. Robust business credit can assist CBD businesses in borrowing funds, securing credit with suppliers, and other financial endeavors.
With these fundamental elements in place, you can shift your focus to the CBD-specific facets of initiating your business.
How to get a CBD License in Ohio
Fortunately, Ohio doesn’t have any CBD-specific business licenses for retailers. This means you won’t require any extra licenses or permits to sell CBD products at a retail location. However, Ohio does have a state hemp program for companies growing or processing hemp for CBD products (or any other use).
According to the 2018 Farm Bill, hemp is defined as a cannabis plant with 0.3% THC concentration or less. As discussed previously, Ohio Senate Bill 57 decriminalized hemp products in the state in 2019, paving the way for the hemp program to be developed for businesses seeking to cultivate or process hemp.
Ohio Hemp Cultivator License
The Ohio hemp cultivation license allows businesses to grow hemp for commercial purposes. To obtain a CBD license, you must sign up for an OH ID account and begin the application process online. The application period lasts between November 1st and March 31st each year, so make sure to apply within the correct timeframe. Licenses last for three years.
The following fees apply:
- Application fee: $100
- Growing location fee: $500 annually
- Site modification fee: $250 for changing the GPS coordinate of a growing location (this fee is applicable “per coordinate” for each growing location)
Ohio Hemp Processor License
To process hemp, Ohio businesses must apply for an Ohio hemp processor license. To apply, start by signing up for an OH ID account, where you can access the application.
The application process is very strict, and the following fees apply:
- Application fee: $100
- License for processing raw grain: $500 annually, per site
- License for processing raw fiber: $500 annually, per site
- License for processing raw floral component: $3000 annually, per site
- License for the wholesale production of cannabinoids: $500 annually, per site
- License for the retail production of cannabinoids: $250 annually, per site
CBD License Application Requirements for Ohio
While Ohio does not have licensing requirements for the retail sale of CBD products, there are application requirements for hemp cultivation and processing licenses. For Ohio hemp cultivation licenses, applicants need to provide extensive personal details and undergo background checks for key participants. Additionally, they must submit mapping coordinates that outline all areas of hemp cultivation operations, including where hemp is grown and stored.
For Ohio hemp processing licenses, the application requirements are stricter. In addition to requiring personal details and background checks, the applicant must submit a Certificate of Occupancy for the processing facility. Likewise, the applicant must undertake label reviews, comply with product inspections, and obtain surety bonds. Follow instructions from the Ohio Department of Agriculture’s website for full details.
Laws and Regulations for Selling CBD in Ohio
All CBD products sold in Ohio must have a 0.3% THC concentration or less and be derived from hemp. Likewise, CBD products must be labeled in accordance with Ohio hemp labeling regulations. Remember, labeling “cannot directly express or imply use in the cure, mitigation, treatment, or prevention of disease or symptoms of disease.”[2]Ohio Department of Agriculture. “Hemp Products“. Accessed on September 28, 2023.
How to Renew Your CBD License in Ohio
As Ohio does not require CBD retailers to obtain licenses, there’s no need to renew any permits to continue selling CBD products. However, hemp growers and processors must renew their licenses to avoid operating illegally. This is possible via the OH ID account portal.
Start Selling CBD in Ohio
Research suggests that Ohio is the second-best region in the United States for marketing CBD products.[3]ColaDigital.ca Cannabis Marketing. “The 25 Best Cities To Sell CBD Products in the USA“. Accessed on September 28, 2023. Therefore, gaining an early foothold is crucial if you wish for your new enterprise to thrive. Fortunately, with no CBD retail licensing requirements, Ohio is an accessible market to enter if you want to sell traditional CBD products online. Once your business is incorporated and you set up your business bank accounts, it’s time to decide how to approach CBD sales.
However, it’s important to note that the CBD sector is seen as a challenging terrain for business owners to secure payment processing services. Banks and other financial institutions view the CBD niche as high-risk—as the product’s legality varies from state to state, many financial services providers steer clear. Fortunately, CBD retailers can use specialized CBD merchant service providers to access payment processing services. With a CBD merchant account, your business can access dependable payment processing, advanced security features, higher chargeback thresholds, and a dedicated account manager for support. There’s never been a better time to unlock the power of a CBD merchant account!
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Ohio CBD License: FAQs
Is CBD legal in Ohio?
Yes, CBD products are legal in Ohio if they contain 0.3% THC concentration or less and are labeled accordingly. Likewise, CBD merchants cannot advertise products with any claims referring to cures, treatments, disease mitigation, or symptom prevention.
How much does a CBD license cost in Ohio?
There are no licensing costs for selling CBD products in a retail setting. However, companies growing or processing hemp for CBD products incur the following licensing fees:
Hemp Cultivation License Fees
- Application fee: $100
- Growing location fee: $500 annually
- Site modification fee: $250 for changing the GPS coordinate of a growing location (this fee is applicable “per coordinate” for each growing location)
Hemp Processing License Fees
- Application fee: $100
- License for processing raw grain: $500 annually, per site
- License for processing raw fiber: $500 annually, per site
- License for processing raw floral component: $3000 annually, per site
- License for the wholesale production of cannabinoids: $500 annually, per site
- License for the retail production of cannabinoids: $250 annually, per site
Can you sell CBD without a license in Ohio?
Yes. Retail businesses do not require CBD licenses to sell CBD products in Ohio, making it one of the most friendly states for CBD retailers. However, hemp processors and growers do require licenses.
How long is a CBD license valid in Ohio?
As there is no need to apply for a retail CBD license in Ohio, there is no expiration date on your ability to sell CBD products as long as you follow state rules and regulations. However, hemp cultivation and processing licenses require an annual fee, and hemp cultivation license holders must renew their licenses every three years.
