Ohio Commission Orders CBD Businesses to Close Shop

Ohio’s newly formed Dispute Resolution Commission has deemed retailers of cannabidiol (“CBD”) to be non-essential and has ordered their closure.

The Dispute Resolution Commission was created in order to identify and clarify which businesses were deemed “essential,” and to facilitate closures of other businesses during the COVID-19 pandemic.  In the Commission’s first set of rulings it determined that CBD businesses were non-essential and ordered CBD retailers and suppliers to temporarily close their doors.

In contrast and as detailed in our previous blog post, Ohio Governor Mike DeWine classified medical marijuana dispensaries as essential businesses in his March 22 stay-home order.  Medical marijuana dispensaries will still be permitted to provide CBD to eligible patients.

The Commission’s ruling is likely to harm companies in the CBD space.  Because CBD was federally illegal until passage of the 2018 Farm Bill, the industry is still in its nascency. Suppliers faced significant up-front costs in obtaining investment, creating a supply chain, and building stores and facilities. Now, these same businesses must grapple with significant overhead costs while simultaneously facing a shortfall in revenue.