Last verified: March 2026
The Tax Structure
Ohio imposes three taxes on recreational cannabis purchases:
| Tax | Rate | Notes |
|---|---|---|
| Cannabis Excise Tax | 10% | Recreational only; medical exempt |
| State Sales Tax | 5.75% | Standard Ohio sales tax; applies to medical and recreational |
| County/Local Sales Tax | 0–2.25% | Varies by county; no local cannabis excise allowed |
| Total (Recreational) | 16–18% | Depends on county |
| Total (Medical) | ~6.25–8% | Sales tax only; excise exempt |
Ohio does not allow municipalities to impose their own cannabis-specific excise taxes. The only local variation is the standard county sales tax rate, which ranges from 0% to 2.25% on top of the 5.75% state rate.
Medical Tax Exemption
Registered medical patients are exempt from the 10% excise tax. They pay only standard Ohio sales tax (~6.25–8% depending on county). For a patient spending $200 per month, this exemption saves approximately $240–$300 per year — making the medical card (which now costs as little as $75 total) one of the best financial decisions for regular consumers.
Revenue Numbers: FY2025
| Metric | Amount |
|---|---|
| Recreational sales (2025) | $836 million |
| Combined sales (2025) | $1.06 billion |
| All-time combined sales | $3.6 billion |
| Sales tax collected (FY2025) | $115.5 million |
| Excise tax collected (FY2025) | $61.9 million |
| Total tax revenue (FY2025) | ~$177.4 million |
SB 56: The Revenue Reallocation
This is where Ohio's tax story gets political. Issue 2 — the voter-approved legalization initiative — directed excise tax revenue to specific purposes:
| Allocation | Issue 2 (Voter-Approved) | SB 56 (Legislature's Rewrite) |
|---|---|---|
| Social equity & jobs | 36% of excise revenue | 0% — eliminated |
| Substance abuse treatment | 25% of excise revenue | 0% — eliminated |
| Host Community Fund | Not in original | 36% of excise (monthly to municipalities) |
| General fund | Remainder | 64% of excise |
SB 56 stripped out both the social equity funding and the substance abuse treatment allocation that voters approved. In their place, the legislature created a Host Community Cannabis Fund that distributes 36% of excise revenue monthly to municipalities with dispensaries, while the remaining 64% goes to the state's general fund with no earmarks.
Host Community Fund Distributions
The Host Community Cannabis Fund distributes money on a monthly basis to municipalities that host cannabis businesses. The largest recipients so far:
- Columbus: ~$2.6 million
- Cincinnati: ~$2.5 million
- Cleveland: ~$803,000
These funds go to general municipal budgets with no restrictions on how they are spent — a sharp contrast to Issue 2's original vision of directing revenue to communities harmed by cannabis prohibition.
Ohio medical patients skip the 10% excise tax entirely. If you spend $200/month on cannabis, the card saves you roughly $240–$300 per year in taxes — more than enough to cover the $75–$200 card cost.
For in-depth cannabis education, dosing guides, safety information, and research summaries, visit our partner site TryCannabis.org