United States: Governor Kasich Signs Bill To Legalize Marijuana For Medicinal Use In Ohio

On June 8, 2016, Governor John R. Kasich signed into law HB 523, which legalizes marijuana in Ohio for specified medicinal purposes. The bill moved swiftly through the Legislature as lawmakers acted to preempt a marijuana legalization initiative that appeared headed for the November 2016 ballot. HB 523 takes effect on September 7, 2016. Below we provide some background on the issue and a general summary of the bill.


Last year, Ohio voters rejected a ballot initiative to legalize marijuana for medicinal and recreational use. Known as "Issue 3," the proposed constitutional amendment created a regulatory framework that allowed just ten pre-selected private businesses to commercially manufacture marijuana. The initiative was soundly defeated.

In the aftermath of Issue 3, a different marijuana legalization campaign led by the national organization Marijuana Policy Project immediately began collecting signatures for the November 2016 ballot. In an apparent response to the public support for legalization and MPP's proposed constitutional amendment, Ohio's legislative leaders convened a 15-member "marijuana task force," consisting of legislators as well as interested parties, to review the issue and submit policy recommendations.

Based on task force recommendations, HB 523 was introduced. The legislation establishes an extensive, highly regulated "seed to sale" system for growing, processing, testing, and dispensing marijuana for patients with any of 20 specified medical diseases or conditions. Immediately after the bill's passage, MPP announced that it was suspending its ballot issue campaign.

Overview of HB 523

Medical Marijuana Control Program: HB 523 requires the Department of Commerce and the State Board of Pharmacy to establish a Medical Marijuana Control Program to provide for the following: 1) the licensure of medical marijuana cultivators, processors, and retail dispensaries; 2) the registration of patients and caregivers; and 3) the licensure of laboratories that test marijuana.1

The Department of Commerce will be responsible for the licensure of cultivators, processors, and testing laboratories, while the Board of Pharmacy will be charged with the licensure of retail dispensaries and the registration of patients and caregivers. The State Medical Board is tasked with issuing certificates to those physicians seeking to recommend treatment with medical marijuana.2

No later than one year after the bill's effective date, the Department of Commerce and Board of Pharmacy must separately adopt rules establishing standards and procedures for the portions of the Program each is responsible for administering.3

Medical Marijuana Advisory Committee: The bill establishes the Medical Marijuana Advisory Committee and authorizes it to develop and submit to the Department of Commerce, Board of Pharmacy, and Medical Board any recommendations related to the Medical Marijuana Control Program. The Committee consists of the following 14 members:

  • Two members who are practicing pharmacists, at least one of whom supports the use of marijuana for medical purposes and at least one of whom is a member of the Board of Pharmacy
  • Two members who are practicing physicians, at least one of whom is a member of the State Medical Board
  • A member who represents law enforcement
  • A member who represents employers
  • A member who represents labor
  • A member who represents persons involved in mental health treatment
  • A member who is a nurse
  • A member who represents caregivers
  • A member who represents patients
  • A member who represents agriculture
  • A member who represents persons involved in the treatment of alcohol and drug addiction
  • A member who engages in academic research4

Qualifying Medical Conditions: HB 523 provides that medical marijuana may be recommended only for the treatment of "qualifying medical conditions," which include: AIDS, amyotrophic lateral sclerosis, Alzheimer's disease, cancer, chronic traumatic encephalopathy, Crohn's Disease, epilepsy or another seizure disorder, fibromyalgia, glaucoma, hepatitis C, inflammatory bowel disease, multiple sclerosis, pain that is either chronic and severe or intractable, Parkinson's disease, positive status for HIV, post-traumatic stress disorder, sickle cell anemia, spinal cord disease or injury, Tourette's syndrome, traumatic brain injury, and ulcerative colitis. The new law also authorizes any individual to petition the State Medical Board to add a disease or condition to the list of qualifying medical conditions.5

Permissible Forms of Medical Marijuana: HB 523 permits only the following delivery methods of marijuana: oils, tinctures, plant material, edibles, patches, and any other form approved by the Board of Pharmacy. The bill expressly prohibits smoking or combustion, but allows for vaporization. Any method or form considered "attractive to children," as specified in the rules adopted by the Board, is prohibited as well.6

Authority to Recommend Medical Marijuana Treatment: A physician seeking to recommend medical marijuana must apply to the State Medical Board for a "certificate to recommend." A physician who holds a certificate may recommend that a patient be treated with medical marijuana if the patient has been diagnosed with a qualifying medical condition and a bona fide physician-patient relationship has been established through all of the following: 1) an in-person physical examination of the patient by the physician; 2) a review of the patient's medical history by the physician; and 3) an expectation of providing and receiving care on an ongoing basis.7

Authority to Use, Possess, or Administer Medical Marijuana: A patient seeking to use medical marijuana or a caregiver seeking to assist a patient in the use of medical marijuana must apply to the Board of Pharmacy for registration. The physician who holds a certificate to recommend and is treating the patient must submit the application on the patient's or caregiver's behalf.8

HB 523 authorizes a registered patient to use or possess medical marijuana or any paraphernalia specified in the Board of Pharmacy rules. A caregiver is also authorized to possess or assist a registered patient in the use or administration of medical marijuana. Under the bill, a registered patient or caregiver may not possess more than a 90-day supply. A registered caregiver who provides care to more than one registered patient must maintain separate inventories of medical marijuana for each patient.9

Protection from Arrest and Criminal Prosecution: HB 523 provides that a registered patient or caregiver is not subject to arrest or criminal prosecution for any of the following actions: 1) in the case of a registered patient, using medical marijuana; 2) obtaining or possessing medical marijuana; 3) possessing specified paraphernalia or accessories; and 4) in the case of a registered caregiver, assisting a registered patient in the use or administration of medical marijuana. The bill also establishes for patients an affirmative defense to a criminal charge of knowingly obtaining, possessing, or using marijuana.10

Cultivation and Sale of Medical Marijuana: The bill authorizes the holder of a cultivator license to cultivate medical marijuana and deliver or sell it to one or more licensed processors. Processors may then process the marijuana into a legally permitted form and sell it to one or more licensed retail dispensaries. Retail dispensaries may then sell to qualifying patients. Home grow is prohibited under the bill.

Licensure of Cultivators, Retail Dispensaries and Laboratories: An entity that seeks a license to cultivate, process, or conduct laboratory testing of medical marijuana must file an application for licensure with the Department of Commerce. An entity that seeks a license to dispense medical marijuana at retail must file an application with the Board of Pharmacy.

The Department of Commerce and the Board of Pharmacy may issue the licenses described above so long as the following conditions are met:

  1. The applicant demonstrates that it does not have a financial interest in a laboratory testing operation
  2. The applicant demonstrates that it does not share any corporate officers or employees with a laboratory testing operation
  3. The applicant demonstrates that it will not be located within 500 feet of a school, church, public library, public playground, or public park
  4. The report of the criminal records check conducted demonstrates that the person subject to the check is not disqualified because of a conviction or guilty plea to an offense specified in rules
  5. Information provided by the Ohio Department of Taxation demonstrates that the applicant is in compliance with state tax laws
  6. The applicant meets all other licensure eligibility conditions established in the rules11

In addition, the Department of Commerce may not issue a license to conduct laboratory testing of medical marijuana unless the applicant is an institution of higher education that meets the following two conditions: 1) the institution is public and located in Ohio; and 2) the institution has the resources and facilities necessary to conduct testing in accordance with the standards and procedures established in rules adopted by the Department.12

Minority Benchmarks: The bill requires that the Department of Commerce and the Board of Pharmacy each issue at least 15% of licenses to entities that are owned or operated by individuals who are members of one of the following economically disadvantaged groups: 1) Blacks or African Americans; 2) American Indians; 3) Hispanics or Latinos; and 4) Asians. However, if no applications or an insufficient number of applications are submitted by such entities that meet the conditions for licensure, the Department and Board may issues licenses according to normal procedures.13

Zoning / Municipal and Township Authority: HB 523 authorizes a municipal corporation to adopt an ordinance, and a board of township trustees to adopt a resolution, to prohibit, or limit the number of, licensed retail dispensaries of medical marijuana within the municipal corporation or within the unincorporated territory of the township.14

Current law limits the power of counties and townships to zone land used for agricultural purposes. The bill provides that these existing limitations do not prohibit a township from regulating the location of retail dispensaries. The bill does not provide similarly for counties.

Effect on Employers and Employment Laws: HB 523 specifically provides that nothing in the bill:

  • Requires an employer to permit or accommodate an employee's use, possession, or distribution of medical marijuana
  • Prohibits an employer from refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment because of that person's use, possession, or distribution of medical marijuana
  • Prohibits an employer from establishing and enforcing a drug testing policy, drug-free workplace policy, or zero-tolerance drug policy
  • Interferes with any federal restrictions on employment, including U.S. Department of Transportation regulations
  • Permits a person to sue an employer for refusing to hire, discharging, disciplining, discriminating, retaliating, or otherwise taking an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment related to medical marijuana
  • Affects the authority of the Administrator of Workers' Compensation to grant rebates or discounts on premium rates to employers that participate in a drug-free workplace program established in accordance with rules adopted by the Administrator.15

Unemployment Eligibility: Under the bill, a person who is discharged from employment based on that person's use of medical marijuana is considered to have been discharged for "just cause" so long as the person's use of medical marijuana violated an employer's drug-free workplace policy, zero-tolerance policy, or other formal program or policy regulating the use of medical marijuana.16

Workers' Compensation Eligibility: Under current law, an employee or dependent is ineligible for workers' compensation benefits if the employee's injury or occupational disease is caused by the employee being under the influence of a controlled substance not prescribed by a physician, so long as the intoxication was the proximate cause of the injury. The bill maintains that if an employee's intoxication from marijuana is the proximate cause of his or her injury, the employee becomes ineligible for benefits, regardless of whether the marijuana use was recommended by a physician.17

Banking Services Provisions: Under HB 523, financial institutions that provide financial services to cultivators, processors, retail dispensaries, or laboratories are exempt from certain state criminal laws that prohibit the provision of financial services to persons who process, deliver, or manufacture marijuana, so long as the cultivator, processor, retail dispensary, or laboratory is in compliance with the bill and the applicable Ohio tax laws.18

The bill authorizes the Director of Commerce to establish a closed-loop payment processing system under which the state creates accounts to be used only by registered patients, registered caregivers, and license holders. The system may include record-keeping and accounting functions that identify all parties involved in marijuana transactions.

Automated Prescription Reporting System: The Ohio Automated Rx Reporting System (OARRS) is a drug database established and maintained by the Board of Pharmacy to monitor the misuse and diversion of controlled substances. HB 523 authorizes the Board of Pharmacy to monitor medical marijuana through OARRS, by requiring that retail dispensaries report to OARRS when dispensing medical marijuana.19

Monitoring Database: The Department of Commerce must establish and maintain an electronic database to monitor medical marijuana from its seed source through its cultivation, processing, testing, and dispensing. The Department may contract with a separate entity to establish and maintain all or part of the database itself.20

Federal Law: The bill declares that it is the intent of the Ohio General Assembly to recommend that the United States Congress, the Attorney General of the United States, and the United States Drug Enforcement Administration take actions as necessary to reclassify marijuana in an effort to ease the regulatory burdens associated with research on its potential medical benefits.21


The timeline of Ohio's Medical Marijuana Control Program and its implementation depends on how quickly each regulatory agency can complete its assigned tasks and formulate its rules. However, the bill requires that the Department of Commerce and Board of Pharmacy take all actions necessary to ensure that the Program is fully operational not later than two years after the bill's effective date. That date is September 8, 2018.

To continue reading this article, please click here.


1 R.C. 3796.02.

2 R.C. 4731.30(B)(1).

3 R.C. 3796.03(A)(1); R.C. 3796.04(A)(1).

4 R.C. 3796.021(A)(1) - (12)

5 R.C. 4731.302(A).

6 R.C. 3796.06(C).

7 R.C. 4731.30(c)(1)(a) - (c).

8 R.C. 3796.08(A)(1).

9 R.C. 3796.23(A)-(B).

10 R.C. 3796.22(c)(1) - (2).

11 R.C. 3796.09(B)(1) - (6).

12 Sub.H.B. No. 523, Section 5.

13 R.C. 3796.09(C).

14 R.C. 3796.29.

15 R.C. 3796.28(A)(1) - (6).

16 R.C. 3796.28(B).

17 R.C. 4123.54(A)(1) - (2).

18 R.C. 3796.27(B).

19 R.C. 4929.771(A).

20 R.C. 3796.07.

21 Sub.H.B. 523, Section 4.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.