New laws, ordinances, changes coming to Ohio in 2026

Ohio will implement a set of regulatory and policy changes effective in 2026, most notably an inflation-linked minimum wage increase of 2.8% raising non-tipped pay to $11.00 and the tipped wage to $5.50 as of Jan. 1, and raising the business gross-receipts threshold to $405,000. The state also requires school districts to adopt student cellphone bans, faces legal uncertainty over Gov. DeWine’s ban on intoxicating hemp after a temporary injunction and related lawsuits, and will enact several bills (HB57, HB248, HB144) affecting school policies, CPA exam rules, and first-responder disability data sharing. Locally, Cincinnati’s mayor Aftab Pureval was reelected, city leaders will be sworn in Jan. 6, and the mayor touts continued fiscal resilience—four consecutive balanced budgets, multi-year surpluses and a $1.6 billion infrastructure trust—alongside housing and downtown redevelopment initiatives that bear on regional real estate and retail dynamics.

Analysis

Market structure: The direct, immediate winners are regional banks (Cincinnati-headquartered lenders), multifamily/residential developers and firms able to repurpose office stock; losers are small, labor‑heavy retailers/restaurants and intoxicating‑hemp vendors. The Ohio minimum‑wage bump (+2.8% to $11; tipped $5.50) increases labor cost run‑rate by roughly 0.6–0.8% of revenues for typical low‑margin restaurants (assuming labor ~20–30% of sales), pressuring margins and accelerating automation/adoption of self‑checkout in retail.

Risk assessment: Tail risks include a court ruling upholding a statewide intoxicating‑hemp ban (write‑offs and fines for retailers) and a sustained public‑safety deterioration that cuts downtown event/tourism revenue >10% for multiple quarters. Time windows: wage change effective Jan 1 (immediate P&L impact in Q1 2026), hemp litigation resolution likely 30–180 days, major office‑to‑housing projects and municipal infrastructure impacts materialize over 12–36 months.

Trade implications: Favor exposure to local balance‑sheet beneficiaries (construction lenders, municipal bonds) and conversion winners (multifamily REITs); underweight small casual‑dining and independent retailers. Use options to express convexity on retail real‑estate redevelopment stories (buy call spreads) and buy downside protection for regional restaurant names via puts or put spreads ahead of Q1 comps.

Contrarian angle: The market’s crime narrative risks overdiscounting downtown demand — Cincinnati shows falling downtown vacancy and a $1.6B infrastructure trust fund; that implies selective local bank and REIT equity is underpriced versus national peers if office‑to‑residential conversion takes off over the next 12–36 months.

Key Decisions for Investors

• Establish a 2–3% long position in Fifth Third Bancorp (FITB) + 1–2% in Huntington Bancshares (HBAN) combined (total 3–5% net long) to capture construction lending and deposit inflows tied to downtown conversions; re‑evaluate after Q1 2026 earnings (look for >5% YoY loan growth in CRE construction tranche as trigger to add).
• Buy a 9–12 month call‑spread on Macy’s (M) sized to 1.5% portfolio risk (bullish on real‑estate conversion optionality): buy nearer‑the‑money calls and sell 25–35% OTM calls to fund cost; close or roll on positive redevelopment headlines or if implied vol rises >30% vs historic 6‑month avg.
• Overweight multifamily REITs (2% position in AvalonBay AVB or Equity Residential EQR) for 12–24 months to play urban housing demand and office‑to‑residential tailwinds; trim if same‑store rent growth falls below +2% YoY or vacancy re‑expands >200bp.
• Short 1–2% (notional) of select casual‑dining/independent restaurant exposure (e.g., Brinker EAT) and go long Kroger (KR) 1% as a pair trade for 3–6 months: thesis—wage‑driven margin compression hurts dine‑in operators more than grocery chains that can pass costs to consumers; exit if EAT reports margin expansion >200bp or KR same‑store sales decline >3%.