There is always a celebration about a new state coming online with legal weed. In 2023, Ohio turned over into an adult-use state. The first legal sale happened in August 2024.
RELATED: Product offers a truly new cannabis experience
After that, news of huge sales quickly made headlines. Ohioans were flocking to their local shops rather than traveling to neighboring Michigan. As of January 2025, $240M, equating to the sale of four million products and almost 35,000 lbs of flower.
Like many states, Ohio sales are beginning to contract, but that hasn’t stopped Governor Mike DeWine from proposing double the tax rate.
Ohio cannabis tax
Ohio currently taxes cannabis products at 10 percent, relatively low compared to Washington state’s 37 percent or California’s 15 percent excise tax. Gov. DeWine proposed multiple sin tax hikes in the Buckeye State, including raising the tax on tobacco vapes, sports gambling, and cannabis. The proposal seeks to double the tax rate to 20 percent, potentially raising prices. DeWine stated that the funds would be allocated to law enforcement, jails, and addiction services.
Experts often point to over regulation and excessive taxation as a widespread issue in the developing weed space. Raising taxes, and ultimately prices, may push Northern Ohioans back into travelling to Michigan for bud, others may turn to their neighborhood dealer.
Overtaxation is believed to perpetuate the grey market by siphoning sales from regulated shops. Meanwhile, MjBizDaily reports that a market contraction is already under way.
RELATED: Irritating cannabis problem is common but avoidable
New market experiences first downturn
Five months into legalization, and sales are on track with expectations, but the first signs of decline have emerged according to MjBiz. Fortunately for consumers, the price of flower, oil, and edibles has continued dropping since the first legal sale. Customers started off paying $9.40 per gram on average but now grab one for around $6.80.
This could be why sales are up for flower, oil, and capsules. However, the same cannot be said for other categories. In the five months since Ohio first sold adult-use cannabis, sublingual sales have dropped almost 60 percent, tablets are down 51 percent, and tinctures and topical sales are over 30 percent lower.
Meanwhile, flower is up almost 13 percent, dabs and vapes are almost 30 percent more popular, and capsules have gained 46 percent more sales. On the whole, plant material makes up half of all adult-use sales and has since August.
While there is no need to sound an alarm in Ohio, doubling the tax could bring new issues.
Weed may get really expensive soon in Ohio
Regulating cannabis is a new frontier. Many states have taken similar approaches, while some are going their own way. One thing that has remained consistent across state lines is that regulated weed is heavily taxed.
Raising taxes has become a part of American society. However, doubling the tax rate five months into a brand-new industry seems excessive. As the Governor seeks to garner more citizen funds, only time will tell what the impact on the developing industry will be.
