Verano Credits Ohio's Hemp Ban for a 25% Jump. The Same Law Made Michigan Weed a Crime

At 8:30 a.m. Eastern on Thursday, October 29, Verano Holdings, the Chicago-based multistate operator, opened its third-quarter call with a $212 million quarter to sell. About ten minutes in, after Illinois and before Florida, George Archos, the company's founder, chairman and chief executive, turned to Ohio. "We've also seen continued growth for the entire Ohio market following the state's hemp ban taking effect at the end of March," he told analysts. (S1, S2)

Then he gave them the number. "According to state data, total receipts were up 25% at the end of the third quarter versus the end of the first quarter," Archos said, "a notable positive trend that correlates with the start of the hemp ban, which indicates hemp consumers are shifting towards licensed dispensaries." Verano was adding drive-through service at several Ohio stores, he said, and planned larger-format products the state had recently approved. (S1)

Twelve minutes later, Kenric Tyghe of Canaccord Genuity asked how disruptive the exit of hemp sellers would be over the next two quarters. Archos said there was really only one state to look at. "Despite what happens on the federal front or the state front, without enforcement, not much change occurs," he said. Ohio, in his telling, is what happens when a state does enforce. (S1)

Senate Bill 56, which Gov. Mike DeWine signed in December, took effect on March 20, 2026, and ended the sale of intoxicating hemp products outside licensed marijuana dispensaries. Under the final version, a hemp-derived product with more than 0.4 milligrams of total THC per container is treated as marijuana and may be sold only in a dispensary. With a federal redefinition of hemp scheduled for December 11, every multistate operator is trying to estimate how much of the hemp customer it can capture, and Archos was offering Ohio as proof of concept. (S5, S6, S7, S1)

Ohio's own spreadsheet supports most of what he said, and complicates the rest. The Division of Cannabis Control publishes cumulative weekly totals for sales and receipts, the count of individual transactions. Working from those figures, cannabis.inc calculated that dispensaries logged about 4.43 million transactions and $303.8 million in sales in the 13 weeks ending March 28, a first quarter that ran almost entirely before the ban took effect on March 20. In the 13 weeks ending September 26 they logged 5.42 million transactions and $353.2 million. That is 22 percent more transactions and 16 percent more dollars, quarter over quarter. Measured Archos's way, from the first quarter's weekly average of about 340,000 receipts to the 427,233 recorded in the week ending October 3, the gain is close to 25 percent. (S3)

The same law did something else on the same day. SB 56 made it a crime to bring legal marijuana bought in another state back into Ohio, according to the Ohio Capital Journal's account of the bill, and Michigan, across the northern border, sells for far less. An index cited by the Capital Journal put the median eighth of flower at $35 in Ohio and $20 in Michigan at the end of July, and Monroe, Michigan, where the median was also $20, sits about 12 miles from downtown Toledo. Any shopper who stopped making that drive after March 20 shows up in Ohio's numbers too, and the state data cannot say which customer came from which change. (S8, S9)

Prices did not drive the jump. The division's average for a tenth of an ounce of flower was $17.70 in the week ending March 28 and $18.42 in the week ending September 26; the average manufactured product went from $24.51 to $24.06. More people bought, at about the same price. The growth also did not start in March. Cannabis.inc's calculation from the same file shows first-quarter 2026 sales running about 22 percent above the first quarter of 2025, before the ban existed, and third-quarter sales about 31 percent above a year earlier. Ohio's adult-use market, which opened in August 2024, was still maturing when SB 56 arrived. (S3)

The split between medical and adult-use sales points to where the new customers went. In the first quarter, the state's figures show $258.4 million in non-medical sales and $45.4 million in medical sales. In the third quarter, non-medical sales were $306.3 million and medical sales $46.9 million. Nearly all of the growth landed on the adult-use side of the counter, which is where a former gas-station delta-8 buyer or a former Michigan day-tripper, neither of whom needs a recommendation, would be expected to show up. Ohio counts 476,589 registered patients, but the patient channel barely moved. (S3, S4)

Ohio's structure carries a federal wrinkle that did not come up on the call. Every one of the 233 dispensary certificates the state lists is a dual-use certificate, letting a single store serve patients and adult customers. On October 30, the day after Verano reported, the DEA moved to deny a Minneapolis dispensary's federal registration on the ground that Minnesota licenses combine the two markets. The agency's list of businesses awaiting registration shows 160 Ohio entries. If the Minnesota reasoning holds, the tax relief that registration is supposed to bring medical sales may not reach a market whose growth is coming from the adult-use side anyway. (S4, S12, S13)

Verano's own quarter shows why an MSO would want Ohio to be the template. The company reported revenue of $212.4 million for the three months ended September 30, up 5 percent from a year earlier, and a net loss of $4.1 million, against $43.8 million a year before. Revenue for the first nine months was $638.5 million. Cash from operations reached $49 million, which Archos called the highest level in four years. The company runs 163 dispensaries in 13 states and raised its 2026 capital spending guidance to between $54 million and $60 million. (S2)

The analysts on the call pressed on capacity. Frederico Gomes of ATB Cormark Capital Markets asked whether licensed producers could grow enough to serve hemp customers if other states followed Ohio, or whether supply would tighten. Archos pointed to the yield and research work behind Verano's higher capital budget. Aaron Grey of Alliance Global Partners asked what the company would do before the federal change on December 11. "For us, it is for the most part, status quo," Archos said, adding that Verano would advertise more where states allow it. (S1)

“When the state gets involved and they actually go out and enforce, you get what's happening in Ohio, which is an increase in the legal cannabis business.”

— George Archos, founder, chairman and CEO, Verano Holdings

The businesses on the other side of that increase describe it differently. Bobby Slattery, founder and chief executive of Fifty West Brewing in the Cincinnati area, told the city's WKRC in October that THC drinks made up about half of what the brewery produces. A federal judge in northern Ohio, ruling in a suit brought by several breweries, said only licensed dispensaries could sell the drinks, a decision WKRC reported applies only to the breweries in that case. "Now, we're living in a [chaotic] world where there's products out on the market that are technically ... you can be prosecuted for drinking," Slattery said, while "the exact same product" sits on shelves legally. He said he had not seen the beverages cause more problems than alcohol. (S10)

The law's opponents tried to stop it at the ballot and ran out of time. Ohioans for Cannabis Choice needed 248,092 valid signatures to put a referendum on the November 3 ballot and did not get them before SB 56 took effect. "Marijuana will be re-criminalized in Ohio, businesses will close, workers will lose their jobs, and consumers will be denied their right to products they should be able to purchase," spokesman Dennis Willard said in March. House Speaker Matt Huffman said he was not surprised, describing a fight that would have pitted "the hemp guys and the marijuana guys" against each other. Some licensed cannabis groups, including the coalition behind the 2023 legalization measure, opposed the referendum. (S8)

The bill's sponsor framed the change around safety, not market share. State Sen. Steve Huffman, a Tipp City Republican and emergency physician, said the law protects children "without overriding the will of Ohioans," and the Senate's summary says it ends the sale of "unregulated, untested" intoxicating hemp. Lawmakers had approved a regulated path for THC beverages through 2026, but DeWine vetoed that provision, leaving drinks with the same dispensary-only rule as other products. The final bill says that if Congress later allows hemp beverages above the federal limit, the General Assembly intends to revisit them. (S6, S7)

Morgan Fox, political director of the National Organization for the Reform of Marijuana Laws, doubts the border is as closed as the statute says. "People were already used to driving to Michigan to purchase cannabis, so as long as there's still a massive price differential, they're probably going to continue doing so at least for the foreseeable future," he told the Capital Journal. If he is right, some of Ohio's third-quarter gain came from shoppers obeying the possession ban, and some of the old Michigan trade is still running, uncounted, on the other side of the line. (S9)

Ohio's dispensaries are selling to more customers than they were in March, at stable prices, under a law that removed the gas-station alternative and penalized the out-of-state one. What the state's data cannot do is separate those two effects, and that matters for the forecast every MSO is now building for December 11. Florida, which Archos singled out on the call as a market where he expects a big uptick if the federal change takes effect, is a medical-only state with no neighbor selling legal adult-use flower at all. (S3, S1)

Archos ended his answer to Tyghe with a caution of his own. The upside from hemp enforcement would come across Verano's footprint, he said, once regulators and legislatures put it in place. "It just might not happen day one, right? It's something that's going to take time." In Ohio it took one law, one effective date and two kinds of customer walking through the same dispensary door, and the state's spreadsheet counts them both as receipts. (S1, S3)

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