COLUMBUS, Ohio — Ohioans are paying less for marijuana than when recreational sales began but prices remain much higher than Michigan.

When recreational sales launched in August 2024, the average price of flower was $9.40 per gram. Now, it costs about $6.30, according to data from the Ohio Division of Cannabis Control.

That’s progress, but not enough to keep Buckeye State consumers from visiting that state up north where customers pay $2.29 per gram.

Experts say Ohio’s prices will continue to drop but parity with Michigan is a complicated goal given how differently the two states regulate their markets.

But Ohio lawmakers are considering rule changes as part of the two-year state budget. How they choose to regulate marijuana could dictate whether prices ever fall in line with Michigan.

Regulated vs free market

Ohioans voted in November 2023 to legalize recreational marijuana for adults age 21 and older. The law outlined everything from the ability to grow marijuana at home to how many licenses the state could distribute.

Michigan doesn’t limit the number of grower licenses and lets cultivators grow outdoors.That isn’t the case in Ohio, where rules are much more restrictive.

The result is that Ohio has 37 operational cultivators while Michigan reported 1,796 active licenses in January.

“That, from my perspective, is a driving force behind the price differences,” Nar Cannabis partner Harrison Carter said.

Nar operates in both states, and Ohio’s indoor facilities cannot match what northern Michigan’s outdoor growers produce.

“They do one batch a year, one harvest a year, and when all that weight comes down its millions and millions of pounds of biomass,” Carter said.

Michigan simply has more product, which drives prices down. And sometimes oversupply drops prices below what it costs to produce.

PharmaCann, one of the country’s largest cannabis operators, closed its Michigan operations in January.

“It’s hard to say if (prices) will ever exactly be the same,” Ohio Cannabis Coalition Director David Bowling said. “Ohio will have a better-quality product over the long-term because you didn’t flood the market and that race to the bottom didn’t occur.”

Mature vs new market

Michigan’s cannabis markets are more mature than Ohio’s as well.

Our northern neighbors legalized medical marijuana in 2008 and recreational in 2018. That’s a big head start on Ohio, where medical marijuana launched in 2016 and recreational sales began last summer.

“There’s been a much larger runway for Michigan to develop its infrastructure and capacity,” Carter said.

Prices, in his opinion, tend to jump when a state expands into recreational sales. And it takes time for growers, processors and sellers to figure out their work flows.

“The price still isn’t where it used to be in the fall of 2023,” Ohio State University’s Drug Enforcement and Policy Center Director Jana Hrdinova said. “I guess where I am left is Ohio patients are probably paying more than they used a year ago.”

Her survey of Ohio medical cannabis users found that 9% are “always obtaining their product” from another state.

“And while it’s technically not legal to do so, who is going to stop them,” Hrdinova said.

Marijuana remains illegal at the federal level which makes it unlawful to carry it over state lines.

Ohio is on par with national cannabis prices though.

According to data compiled by the Oxford Treatment Center, the average price for high-quality marijuana in Ohio this March was $330 per ounce. The national average was $326.

Prices were higher in nearby states, but Michigan had the lowest price in the region at $290.

Oregon had the lowest average in the country at $211 per ounce. The District of Columbia was the highest at nearly $598.

Intoxicating hemp

Another factor driving Ohio’s marijuana price problem is the widespread sale of intoxicating hemp products — like delta-8 THC — at gas stations, smoke shops, and convenience stores.

“It’s huge, honestly,” Bowling said. “They’re illegally stealing from our market, and because they don’t have any regulatory hurdles to get through, they can sell it much cheaper.”

Ohio lawmakers are trying to close that loophole.

Read more: Senate Republicans move to restrict sales of Delta-8, CBD products

Republican Sen. Steve Huffman, of Miami County, expects a committee vote Wednesday on his bill limiting sales of most products with at least 0.3% THC concentration to dispensaries and adults 21 and older. That would subject sales to the same rules as marijuana.

Republicans led by Gov. Mike DeWine have raised alarms over how easily children can purchase intoxicating hemp products.

The U.S. Hemp Roundtable supports age restrictions but says “reputable retailers” deserve to keep their businesses.

More changes to come

Ohio’s recreational cannabis market is still in its infancy, but Huffman told cleveland.com he thinks de-regulation is on the horizon.

“I certainly believe in a couple of years we should look at de-regulation on the cultivators and bring the price down,” he said. “The best guy who grows the best marijuana is going to be able to sell it.”

DeWine and House Republicans also have proposals that would restructure Ohio’s recreational cannabis market.

DeWine proposed raising Ohio’s sales tax from 10% to 15%. Huffman floated the idea of going as high as 20%.

These changes alone could have a big impact on pricing.

Huffman’s also pushing to lower the number of plants individuals can grow at home, reduce the square footage growers can use and outlaw outdoor smoking.

Read more: Senate Republicans pass major changes to Ohio’s marijuana law

“I think sometime in the next two months all four bills will get mixed up,” Huffman said. ”We’ve taken a very conservative and slow approach to marijuana, and that’s what Ohio will continue to do.”

Anna Staver covers state government and politics for Cleveland.com/The Plain Dealer.