A major antitrust lawsuit filed in Ohio is putting the business practices of some of the country’s largest cannabis companies under a microscope, and the allegations could have implications far beyond the Buckeye State.
Ohio Attorney General Dave Yost filed a lawsuit in February against nine major multistate cannabis operators, accusing them of working together in ways that allegedly restricted competition and made it harder for smaller, independent cannabis businesses to compete.
The companies named in the lawsuit are Ascend Wellness, Ayr Wellness, The Cannabist Company, Cresco Labs, Curaleaf, Green Thumb Industries, Jushi, Trulieve and Verano.
According to Cannabis Business Times, Yost’s office alleges that the companies participated in reciprocal purchasing arrangements, shared competitively sensitive information and engaged in distribution practices that disadvantaged independent Ohio operators.
“Our investigation uncovered allegations of an industry wide scheme designed to push small Ohio businesses out of the market,” Yost said, according to Cannabis Business Times. “Ohio’s antitrust laws protect competition and consumers, not backroom deals that rig the system for a select few.”
At the center of the case is an allegation that senior representatives from some of the companies met in 2022 and reached agreements to prioritize one another’s products while reducing shelf space available to smaller competitors.
Yost’s office says the investigation began after receiving a tip from an Ohio cannabis industry employee in October 2024. The tip allegedly described reciprocal purchasing agreements that were negotiated at a national level and resulted in smaller Ohio cultivators and processors losing business with major retail operators.
The lawsuit claims these practices ultimately reduced consumer choice, limited innovation and helped keep cannabis prices higher than they otherwise might have been.
The allegations are particularly significant because Ohio’s adult use market generated approximately $700 million in sales during its first year, creating an enormous incentive for large operators to protect their market share.
The companies named in the case have pushed back against the allegations.
Curaleaf told Cannabis Business Times that it considers the complaint “novel and premature” and argued that the company had cooperated with the attorney general’s investigation. Curaleaf also said it believes its business practices are legitimate, necessary and pro competitive.
Ascend Wellness similarly disputed the allegations. The company said its Ohio stores have longstanding relationships with independent operators and that products from those businesses make up roughly two thirds of its third party inventory.
The case is still developing, meaning the allegations have not been proven in court. However, the lawsuit raises a larger question for cannabis markets across the country.
What happens when a highly concentrated industry combines limited licenses, vertically integrated companies and a small number of major retailers?
Illinois should be paying attention.
Illinois does not currently have a lawsuit comparable to the one filed in Ohio alleging that major cannabis operators created reciprocal purchasing arrangements or coordinated to disadvantage independent businesses.
That does not mean the issues raised in Ohio are irrelevant to Illinois.
In fact, Illinois may be particularly vulnerable to similar concerns because of the way its cannabis market was structured from the beginning.
Illinois operates within a limited license framework, meaning the number of businesses able to participate at different levels of the supply chain is restricted. At the same time, several of the largest operators in the state have substantial cultivation, processing and retail operations.
That structure can create an uneven playing field for smaller operators.
An independent cultivator may have an excellent product, but getting meaningful access to dispensary shelves can be a completely different challenge. Retail operators ultimately control which products consumers see, how much shelf space those products receive and how prominently they are marketed.
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When the same companies have interests across multiple parts of the supply chain, questions about competition become increasingly important.
Illinois has also seen ongoing criticism from smaller cannabis businesses over the difficulty of competing with established multistate operators. High operating costs, taxation, limited retail access and the enormous financial resources available to larger companies can make it difficult for independent operators to gain meaningful market share.
That does not prove that illegal coordination is taking place in Illinois.
It does, however, demonstrate why regulators should be watching the industry closely.
The Ohio lawsuit is important because it goes beyond the usual debate about whether large cannabis companies are simply better positioned to compete. The allegations focus on whether competitors may have crossed the line from ordinary competition into conduct designed to suppress competition itself.
That distinction matters.
A company successfully negotiating better purchasing terms is competition. A retailer choosing products based on consumer demand is competition. A company investing heavily in cultivation, manufacturing or retail is competition.
But if competitors secretly agree to favor one another’s products, share sensitive competitive information or deliberately restrict opportunities for independent businesses, regulators may view that very differently.
Illinois has spent years dealing with concerns about market concentration and the dominance of large operators. The Ohio case adds another potential issue to that conversation.
Could something similar eventually happen in Illinois?
I would not be surprised if it did.
Again, there is currently no Ohio style antitrust lawsuit against Illinois cannabis companies based on the allegations described in the Ohio case. But Illinois has many of the structural ingredients that can create disputes over market power, access and competition.
If independent operators continue to argue that they cannot obtain fair access to dispensary shelves while larger vertically integrated companies continue to expand their influence across the supply chain, eventually someone could decide that complaints and industry criticism are not enough.
They could take those concerns to regulators or to court.
The cannabis industry is still relatively young, but many of the business practices developing within it are not unique to cannabis. As markets mature, regulators increasingly have to determine where aggressive competition ends and anti competitive behavior begins.
The Ohio lawsuit could become an important test of that boundary.
For Illinois, the lesson should not be that major cannabis companies are guilty of wrongdoing. The allegations against the Ohio defendants still have to be litigated and proven.
The lesson should be that market structure matters.
If Illinois wants a cannabis industry where independent cultivators, processors and retailers can realistically compete alongside large multistate operators, regulators need to ensure that access to consumers is determined by competition, product quality and consumer demand rather than relationships or arrangements that could unfairly shut smaller businesses out.
The Ohio case may ultimately succeed, fail or settle without establishing any broader precedent.
But regardless of the outcome, it is a warning worth watching in Illinois.
The Cannabis Business Times reported on the Ohio lawsuit and the statements from the companies involved. Direct quotations in this article are attributed to statements reported by Cannabis Business Times.
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