The Ohio marijuana tax on adult-use purchases is a 10% state excise tax, which stacks on top of Ohio’s 5.75% state sales tax and any county or transit sales tax of up to 3%. That brings the total tax on a recreational cannabis purchase to somewhere between roughly 16% and 18.75%, depending on the county. Registered medical marijuana patients skip the 10% excise tax entirely and pay only ordinary sales tax.
The 10% Adult-Use Excise Tax
Ohio Revised Code 3780.22 imposes a 10% excise tax on the retail price of adult-use marijuana sold at licensed dispensaries.1Ohio Legislative Service Commission. Ohio Code 3780.22 – Tax Levied on Adult Use Consumers The dispensary collects it from the buyer at the point of sale. It applies regardless of when the product is delivered or when the consumer finishes paying, so layaway-style arrangements don’t defer the tax.
The statute is explicit that this 10% is “in addition to” Ohio’s sales and use tax.2Ohio Legislative Service Commission. Ohio Code 3780.22 – Tax Levied on Adult Use Consumers That layering is what pushes the effective rate well past 10% at the register.
State and Local Sales Tax on Top
Every cannabis purchase is also subject to Ohio’s 5.75% statewide sales tax.3Ohio Legislative Service Commission. Ohio Code 5739.02 – Levy of Sales Tax Counties and regional transit authorities can add their own sales tax in small increments, up to a combined local maximum of 3%. That means the total sales tax rate in any given Ohio county can reach 8.75%.4Ohio Department of Taxation. Sales and Use Tax
Where you buy matters. A handful of rural counties levy little or no local sales tax, keeping the combined sales rate near 5.75%. High-tax counties like Cuyahoga sit at the top of the range. Add the 10% excise on top, and a consumer in a county with a 2.25% local rate pays about 18% total; in the highest-tax counties the total approaches 18.75%.
One thing cities cannot do: tack on a cannabis-specific local tax. Ohio law prohibits municipalities from imposing any tax, fee, or charge on cannabis businesses that they do not also impose on other businesses in the same area. If a city allows dispensaries at all, the rate structure is the same statewide 10% excise plus whatever sales tax already applies in that location.
Medical Marijuana Patients Pay Less
Registered patients and their caregivers in Ohio’s medical marijuana program do not pay the 10% excise tax. The amended version of ORC 3780.22 draws the line clearly: the excise applies to adult-use marijuana, and medical marijuana is excluded.2Ohio Legislative Service Commission. Ohio Code 3780.22 – Tax Levied on Adult Use Consumers To claim the exemption, present a valid medical marijuana registry card at the time of purchase.
Medical purchases aren’t tax-free, though. State and local sales taxes still apply, so a medical patient pays 5.75% to 8.75% depending on the county. For patients who buy regularly, avoiding the 10% excise adds up fast, and that is the main financial reason to keep an active medical card after adult-use legalization.
Home-Grown Cannabis Isn’t Taxed
Adults 21 and older in Ohio can grow up to six cannabis plants at their primary residence, with a household cap of 12 plants. The 10% excise tax applies only to retail sales at licensed dispensaries, so cannabis you grow at home for personal use does not trigger it. There is no state mechanism for taxing homegrown marijuana that never enters the commercial supply chain.
The cultivation must happen in a secured, enclosed area on the residence grounds, out of public view and inaccessible to anyone under 21. Selling or transferring home-grown marijuana for any compensation is illegal. The absence of tax is simply a function of how the excise is structured: it’s a point-of-sale retail levy, not a possession or production tax.
Where the Excise Revenue Goes
Every dollar of the 10% excise is earmarked under ORC 3780.23 for four specific funds. None of it flows into Ohio’s general revenue.5Ohio Legislative Service Commission. Ohio Code 3780.23 – Funds Created The split:
- 36% to the cannabis social equity and jobs fund, which supports communities most affected by past marijuana enforcement through grants, loans, legal aid, criminal justice reform, and entrepreneurship programs.6Ohio Legislative Service Commission. Ohio Code 3780.19 – Cannabis Social Equity and Jobs Program
- 36% to the host community cannabis fund, distributed to the cities and townships where dispensaries operate, proportional to how much excise tax each location generates.
- 25% to the substance abuse and addiction fund, which supports Ohio Department of Mental Health and Addiction Services programs.
- 3% to the division of cannabis control and tax commissioner fund, covering regulator and Department of Taxation operating costs.
From July 2024 through November 2025, the state collected roughly $33 million in cannabis excise tax revenue. Transfers to the funds happen quarterly.
How Dispensaries File and Pay
Dispensaries file and remit the adult-use marijuana (AUM) tax electronically through OH|Tax eServices, the Department of Taxation’s online portal.7Ohio Department of Taxation. Adult Use Marijuana Tax Returns and payments are due by the 23rd of each month for sales made during the prior calendar month. If the 23rd lands on a weekend or state holiday, the deadline shifts to the next business day.8Ohio Department of Taxation. Due Dates
To file, operators need their AUM account number, FEIN, adult-use gross sales, medical gross sales, sales to other AUM operators, and banking information for electronic payment.7Ohio Department of Taxation. Adult Use Marijuana Tax The return separates adult-use from medical sales, which is why clean daily point-of-sale records matter. Ohio requires licensed cannabis businesses to use the Metrc seed-to-sale tracking system, and the state cross-references Metrc data against what dispensaries report on their returns.
The Bigger Federal Problem: Section 280E
Ohio’s excise is only one layer. On the federal side, Internal Revenue Code Section 280E bars any deduction or credit for a business trafficking in Schedule I or Schedule II controlled substances.9Office of the Law Revision Counsel. 26 USC 280E – Expenditures in Connection With the Illegal Sale of Drugs An Ohio adult-use dispensary or cultivator cannot write off rent, payroll, utilities, or marketing on its federal return. The only offset allowed is cost of goods sold, because that is treated as a reduction in gross income rather than a deduction. The result: adult-use cannabis businesses pay federal income tax on something close to gross revenue, and effective federal rates can exceed 70% for some operators. That is where most Ohio cannabis businesses feel the real squeeze, not from the 10% state excise.
What Changed in 2026
On April 22, 2026, the Justice Department issued an order placing two categories of cannabis into Schedule III of the Controlled Substances Act: FDA-approved products containing marijuana, and marijuana products regulated under a state-issued medical license.10United States Department of Justice. Justice Department Places FDA-Approved Marijuana Products and Products Containing Marijuana Subject to a Qualifying State-Issued License in Schedule III Because 280E only blocks deductions for Schedule I or II substances, licensed medical cannabis operators in Ohio are no longer subject to that restriction as of the rescheduling date.
Adult-use cannabis remains on Schedule I and is still subject to 280E. An Ohio dispensary that sells both lines must carefully allocate expenses, deducting only those costs attributable to the medical side. The DEA has scheduled a broader administrative hearing beginning June 29, 2026, to consider rescheduling all marijuana from Schedule I to Schedule III, but until that process concludes, the adult-use side stays locked out of standard deductions.10United States Department of Justice. Justice Department Places FDA-Approved Marijuana Products and Products Containing Marijuana Subject to a Qualifying State-Issued License in Schedule III Whether operators can amend prior-year returns and reclaim deductions previously disallowed under 280E remains an open question; the IRS has not issued guidance on retroactive relief as of mid-2026.