Ohio: Adult-Use Rollout, Site Demand, and Suburbs to Watch

Executive Summary (TL;DR)

• Ohio adult-use sales have been live through “dual-use” dispensaries since August 2024, with ongoing rule and licensing evolution that can materially impact underwriting for Ohio cannabis real estate.
• Local governments can restrict or prohibit adult-use operators, and timing windows can matter—so zoning verification + municipal approval should be treated as first-class diligence items, not afterthoughts.
• For buyers/investors: the best opportunities often sit at the intersection of (1) a compliant site, (2) a transferable/approvable operating structure, and (3) a defensible revenue story supported by a clean data room and credible Quality of Earnings (QoE).
• For business brokers: demand is shifting toward “execution-ready” deals—clear licensing path, landlord consent, and a practical transition plan—because regulatory and lease friction can kill timelines and pricing.
• Who should act next: buyers/investors and brokers screening Ohio retail/industrial opportunities tied to adult-use ramp (and sellers who want to position assets before rule changes take effect).

Table of Contents

• Ohio adult-use rollout: what changed and why it matters
• Ohio cannabis real estate: demand drivers and site criteria for 2026
• Suburbs to watch: a practical way to shortlist submarkets
• What buyers/investors and brokers should do next
• Valuation lens: dispensary + real estate (and why the lease can be the deal)
• Deal process overview: NDA → LOI → diligence → close
• Due diligence checklist (with table)
• Myth vs. Fact: Ohio market edition
• 30/60/90-day execution plan
• Next steps on 420 Property

Ohio adult-use rollout: what changed and why it matters

Ohio’s adult-use framework matters to real estate because it changes who can operate, where they can operate, and how quickly demand shows up in specific corridors.

A few market realities to bake into your assumptions:

• Adult-use sales began via dual-use dispensaries. That structure tends to concentrate early demand at existing medical locations and then “radiate” into new neighborhoods as licensing and municipal posture evolve.
• Local control is real. Cities and townships can adopt ordinances/resolutions to prohibit or limit the number of adult-use operators. In practice, this can split a metro into “open” and “closed” pockets—often block-by-block at municipal borders.
• The rulebook is moving. Ohio enacted significant changes through Senate Bill 56 (effective March 20, 2026). Even if you’re focused on a single site today, your diligence must include “what changes at effective date” and how that affects licensing, operations, and enforcement.

Takeaway: In Ohio, “great retail” is not enough. A site’s value depends on (1) its compliance path, (2) its municipality’s posture and timing, and (3) whether the business + lease structure can survive regulatory updates.

Ohio cannabis real estate: demand drivers and site criteria for 2026

When investors say “Ohio cannabis real estate,” they often mean retail storefronts. But in a ramping adult-use market, demand shows up across three core property buckets:

1) Retail dispensary sites (most visible demand)

Early adult-use demand typically pressures:

• Parking + ingress/egress (queue management is operational risk)
• Visibility (corner lots, endcaps, and strong signage rights)
• Security buildout (cameras, access control, secure storage)
• Neighbor sensitivity (schools, parks, civic uses, and local buffers)

Underwriting tip: In cannabis retail, “prime location” is more than traffic counts. You’re underwriting friction: landlord consent, zoning interpretation, and whether the municipality is stable on cannabis over election cycles.

2) Light industrial for processing/distribution (often overlooked)

As adult-use volume grows, operators look for:

• Light industrial with loading, power, and secure interior flow
• Locations that reduce last-mile friction to multiple dispensaries
• Sites compatible with “seed-to-sale” track-and-trace workflows (often involving systems such as METRC where applicable)

3) Cultivation-adjacent properties (selective demand)

Cultivation real estate can be opportunity—or a trap—depending on:

• Utility cost exposure (power and HVAC load)
• Envelope suitability (ceiling height, humidity control, insulation)
• Local appetite for industrial cannabis uses (not just retail)

Practical rule: Retail drives the headlines, but industrial often drives scalable margin—especially when operators can control shrink, fulfillment speed, and compliance workflow.

Suburbs to watch: a practical way to shortlist submarkets

“Suburbs to watch” should not be interpreted as “guaranteed friendly.” Ohio’s local control means you must verify each municipality’s ordinance posture and any pending votes. Instead, use this as a screening framework to identify suburban nodes that often check the boxes for cannabis retail/industrial—then validate.

The three suburban patterns that tend to attract demand

1. Border-and-bridge suburbs

• Sit near a municipal boundary where one side is restrictive and the other is permissive (or less restrictive).
• Capture “displaced demand” without needing downtown core entitlements.

2. Highway-interchange retail nodes

• Strong car access + parking + predictable retail co-tenancy.
• Easier to design security and crowd flow than dense urban blocks.

3. Mid-density mixed commercial corridors

• Often have flexible zoning districts with existing retail/office stock.
• Can support compliant retrofits without ground-up entitlement risk.

Shortlist examples by metro (validate locally)

Below are examples of suburban areas investors frequently evaluate for retail access, visibility, and commercial stock—not a statement that a specific city allows adult-use operators.

How to use this table: Start here, then run a “municipal reality check” before you spend money on design or LOIs.

The municipal reality check (what to confirm before an LOI)

For each target suburb/corridor:

• Is the municipality currently restricting or prohibiting adult-use operators (or discussing it)?
• Are there timing windows that matter (e.g., after a license issuance)?
• Are there overlay districts, conditional use permits, or spacing/buffer rules that change the address-level outcome?
• Are there additional business requirements (security/operations plan, hours, signage, odor mitigation) that effectively narrow the site set?

If you treat these as post-LOI items, you risk paying for diligence on a site that cannot legally operate—or can operate only with a timeline that breaks your financing.

What buyers/investors and brokers should do next

For buyers/investors: build a two-track thesis (license path + site path)

In Ohio, deals stall when investors assume “license first” or “real estate first” is enough. Instead:

• Track A: License/operating rights
  • What exactly are you buying (license, entity, assets, management rights)?
  • Is it an asset sale vs. stock sale (and what approvals are required for ownership change)?
  • Are you inheriting compliance liabilities through the entity?
• Track B: Real estate
  • Does the site meet zoning and local requirements today—and are they stable?
  • Does the lease allow cannabis use, and will you get landlord consent in writing?
  • Can you survive a “no” vote or restrictive ordinance change through relocation rights?

For business brokers: package “execution certainty,” not just upside

Deals trade best when the Confidential Information Memorandum (CIM) tells a clean story and reduces buyer uncertainty:

• A tight data room (financials, lease, permits, SOPs, compliance)
• Clear staffing + transition plan (defined transition period)
• Evidence of compliance discipline (inventory controls, training logs, audit readiness)
• A specific diligence map (what’s already verified vs. buyer responsibility)

Valuation lens: dispensary + real estate (and why the lease can be the deal)

Valuation in cannabis often starts with operating cash flow, but real estate and compliance can dominate the outcome.

SDE vs EBITDA (and cannabis-specific reality)

• SDE (Seller’s Discretionary Earnings) is common for owner-operator businesses; it normalizes owner compensation and personal expenses.
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is the more standard metric for institutional buyers.
• Buyers will scrutinize add-backs aggressively, especially if compliance or staffing is thin.

Cannabis lens: If federal tax constraints (e.g., Internal Revenue Code 280E) are in play, “profit” can look different on tax returns than in management accounts. Expect buyers to request a QoE to reconcile that.

Real estate value drivers that move the multiple

• Lease term + options: short remaining term can crush value, even with strong revenue.
• Use clause: cannabis-specific permission (not “retail only”) reduces landlord risk.
• Assignment language: the ability to assign the lease (or pre-negotiate assignment) is often a hidden deal lever.
• Sale-leaseback: for owned real estate, sale-leaseback can recapitalize the seller and widen the buyer pool—but only if rent is supportable.

Bottom line: In Ohio cannabis real estate deals, the “real” asset is often the right to operate at that address under a compliant, financeable lease.

Deal process overview (NDA → LOI → diligence → close)

A clean process reduces churn and keeps regulators, landlords, and lenders aligned.

1. NDA (Non-Disclosure Agreement)
   • Buyers get access to the CIM and data room basics.
2. LOI (Letter of Intent)
   • Non-binding business terms: price, structure, working capital, timing, exclusivity.
3. Diligence
   • Financial: QoE, revenue quality, margins, customer concentration
   • Legal/compliance: ownership, regulatory posture, SOPs
   • Real estate: zoning verification, landlord consent, buildout requirements
   • Title/UCC: UCC/lien search to confirm secured creditors and encumbrances
4. Definitive agreements + close
   • Reps & warranties, covenants, closing conditions, and post-close transition
   • Common structures include seller notes and earnouts (use sparingly and define metrics tightly)

Due diligence checklist

Use this as a field-ready checklist for Ohio opportunities, especially where the address and municipality are as important as the P&L.

Myth vs. Fact: Ohio market edition

• Myth: “If adult-use is legal statewide, any suburb is fine.”
  • Fact: Local governments may prohibit or limit adult-use operators, so address-level diligence matters.
• Myth: “A great retail corner guarantees a premium valuation.”
  • Fact: If the lease can’t be assigned or cannabis use isn’t clearly permitted, the multiple compresses fast.
• Myth: “Buying the business is simpler than buying the real estate.”
  • Fact: In cannabis, the business is often inseparable from the site’s compliance path and local politics.
• Myth: “Seller financing fixes deal risk.”
  • Fact: A seller note can bridge valuation gaps, but it can’t fix zoning or licensing uncertainty.
• Myth: “You can diligence municipal posture after the LOI.”
  • Fact: Municipal risk belongs in the LOI timeline and contingencies—early.

30/60/90-day execution plan (buyers + brokers)

First 30 days: screen for “address feasibility”

• Build a target list of sites/operators and run a municipality-by-municipality check.
• Confirm zoning pathway and whether special approvals are required.
• Get landlord posture in writing early (use clause + assignment expectations).
• Decide your acquisition lane: operating business, real estate lease, or combined.

Days 31–60: lock the deal model

• Get NDA signed; request clean financial exports and start QoE planning.
• Draft LOI with real contingencies: zoning verification, landlord consent, and regulatory approval.
• Run UCC/lien search and preliminary title review if real estate is included.
• Stress-test the rent: can the business carry it across a conservative scenario?

Days 61–90: diligence to close (or kill quickly)

• Complete financial diligence and reconcile to POS and bank statements.
• Validate compliance: SOPs, security posture, track-and-trace workflow readiness.
• Finalize definitive terms (reps & warranties, seller note/earnout metrics, transition period).
• Close only when the licensing + lease path is executable—not just “likely.”

Next steps on 420 Property

If you’re tracking Ohio opportunities, use 420 Property to shorten your search and diligence cycle:

This article is for educational purposes only and does not constitute legal, financial, tax, or business brokerage advice. Always consult qualified professionals before making decisions, and verify all requirements with the appropriate authorities and counterparties.

Please visit:

Our Sponsor