Everything You Need to Know About Colorado’s Proposition 122

In what is undoubtedly a monumental victory for advocates, Colorado voters approved Proposition 122 in last Tuesday’s elections. Proposition 122 decriminalized five psychedelic substances and will enable adults 21 and over to use them at licensed “healing centers” in Colorado. Nearly 53% of Colorado voters voted in favor of the measure.

Proposition 122 specifically decriminalized the personal use, possession, growth, and transport, for adults 21 years of age and older, of the following hallucinogenic or entheogenic plants and fungi, which were previously classified as Schedule I substances and are now instead defined as natural medicines in Colorado: dimethyltryptamine (DMT); ibogaine; mescaline (excluding peyote); psilocybin; and psilocyn. Proposition 122 was also designed to create a natural medicine services program for the supervised administration of such substances; create a framework for regulating the growth, distribution, and sale of such substances to permitted entities; and create an advisory board to promulgate rules and implement the regulated access program. Proposition 122 does not provide for the retail sale of psychedelic plants and fungi.

Specifically, the initiative was designed to create the Regulated Natural Medicine Access Program for licensing healing centers to administer natural medicine services under the Colorado Department of Regulatory Agencies (“DORA” or the “Department”). The initiative also created the Natural Medicine Advisory Board within the DORA to advise the Department on implementing the Regulated Natural Medicine Access Program in accordance with specified rules and timelines. Governor Jared Polis has until January 31, 2023, to appoint 15 members to the Natural Medicine Advisory Board.  Under the program, individuals 21 and older can receive natural medicine services provided by a licensed healing center under the supervision of a facilitator. The natural medicine services were designed to include a preparation session, administration session, and integration session.

The Natural Medicine Advisory Board’s first recommendations are due by September 30, 2023, but the regulated access program will launch in late 2024 and will initially be limited to psilocybin. However, if recommended by the Natural Medicine Advisory Board, the program could expand to include DMT, ibogaine, and mescaline by June 2026. Further, Proposition 122 requires that the state issue rules for drug testing standards, license requirements, and health and safety warnings by January 1, 2024, and that the state begin accepting applications for licensed facilities to administer psilocybin by September 30, 2024.

Although Proposition 122 is not without its critics, the measure ultimately passed and signifies a huge step forward for advocates of psychedelic treatments. Passage of the measure comes as more and more scientific research shows the significant mental health benefits of psychedelic treatments. Coalition Director for Natural Medicine Colorado, Kevin Matthews, expressed that Colorado is often ranked as one of the states with the poorest mental health and that there is a need for more mental health treatment options. As such, “[t]he intent was to make these medicines accessible to as many people in Colorado who could possibly benefit, and especially for those who are suffering from things like major depression, extreme anxiety, PTSD, end-of-life distress, and other ailments.” Matthews believes that people should at least have the option of working with these natural medicines and now, thanks to the majority of Colorado voters, they will.

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Maryland & Missouri Legalized Marijuana for Adult Use: What to Expect Next

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In this November’s elections, voters in both Maryland and Missouri voted in favor of their states’ respective adult-use legalization measures, bringing the tally of states that have legalized marijuana for adult use up to a total of 21 states.

Maryland Question 4, the Marijuana Legalization Amendment, was on the ballot as a legislatively referred constitutional amendment, and the ballot measure passed with an overwhelming 66% in favor. Maryland is now only the second state to legalize marijuana for adult use via the passage of a popular referendum.

Question 4 amended the Maryland Constitution to add a new article which authorizes individuals 21 years of age and older to use and possess marijuana beginning July 1, 2023. The measure also directs the Maryland State Legislature to pass laws for the use, distribution, regulation, and taxation of marijuana. As such, it is now up to state lawmakers to efficiently adopt rules to establish and oversee a regulated adult-use marijuana marketplace in Maryland. Moreover, by approving Question 4, Maryland voters also triggered the enactment of separate but complementary piece of legislation which defines marijuana possession limits and facilitates the automatic review and expungement of low-level cannabis convictions. Under this legislation, adults will be legally permitted to possess up to 1.5 ounces of marijuana and/or 12 grams of marijuana concentrates beginning in July 2023. Adults will also be permitted to grow up to 2 marijuana plants in their homes for their own personal use. Further, possessing marijuana in amounts between 1.5 and 2.5 ounces will subject people to civil fines, while the possession of greater quantities will remain subject to existing criminal penalties.

Meanwhile, Missouri voters decided in favor of Amendment 3, the Marijuana Legalization Initiative, which was on the ballot in Missouri as a voter initiated constitutional amendment. Notably, the vote marks the first time that voters in a mid-western state have decided in favor of a citizens’ initiative legalizing marijuana for adult use, and the measure passed with over 53% of voters voting in favor.

Amendment 3 legalized the purchase, possession, consumption, use, delivery, manufacture, and sale of marijuana for personal use for adults over 21; allows individuals with certain marijuana-related non-violent offenses to petition for release from prison or parole and probation and have their records expunged; and enacts a 6% tax on the retail price of adult-use marijuana. Missouri’s adult-use legalization measure allows adults to possess up to 3 ounces of marijuana and to cultivate at home up to 6 flowering plants, 6 immature plants, and 6 plants under 14 inches for their own personal use. Further, Amendment 3 provides for the establishment of a lottery selection process to award marijuana business licenses and certificates; requires the issuance of equally distributed licenses to each congressional district; and places an emphasis on social equity in business licensing. Additionally, the measure allows for local cities and municipalities to opt-out of adult-use marijuana retail sales through a vote of the people.

While the passage of adult-use legalization measures in Maryland and Missouri undoubtedly represents significant victories for advocates and will help to build momentum for the federal legalization movement, it is important to note that it will take some time for the markets in these states to get up and running.

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Marijuana Being Sold in FL Gas Stations – Clarifying Misleading Clickbait Headlines

A few weeks ago, the internet exploded with headlines like, “Where to Get Legal Weed in Florida? Soon, at Your Local Circle K Gas Station,” “Circle K Gas Stations Are Adding a New Product for Convenient Pickup–Weed,” and “Pour Gas, Buy Some Weed? Cannabis to Be Sold at Circle K Gas Stations in Florida.” These headlines were hugely misleading.

Last week, new articles were published with headlines like, “Florida Steps in to Put Kibosh on Circle K Marijuana Plans,” which was also hugely misleading.

If you read the body of these articles, the misrepresentations made in their headlines become clear. The truth is as follows:

  • Contrary to the headlines, Circle K, a Canadian convenience store and gas station operator with hundreds of locations in Florida, is NOT going to be selling marijuana. Circle K teamed up with Chicago-based Green Thumb Industries (“GTI”), a national cannabis consumer packaged goods company that holds a Florida medical marijuana treatment center (“MMTC”) license and owns and operates several dispensaries in the state.  The parties have agreed that GTI will open ten “RISE Express” dispensaries adjacent to Circle K convenience stores in Florida. Through an exclusive agreement between the two companies, GTI simply plans to lease from Circle K retail spaces that are next to the Circle K convenience stores. According to a GTI spokesperson, each RISE Express dispensary will have a separate entrance and cannot be entered from inside the Circle K. GTI’s products will not be sold by or within any Circle K.
  • In response, the Florida Department of Health (DOH) simply stated that Florida has not yet approved the deal between GTI and Circle K. “This project has not been approved by the State. . . Florida has never approved a Medical Marijuana Treatment Center to operate out of a gas station.” The DOH did NOT “put a kibosh” on the agreement between GTI and Circle K as one headline suggested. Instead, the DOH merely stated what the law requires–namely, approval of the agreement by the DOH’s Office of Medical Marijuana Use (OMMU).

While we do not know the specific terms of the agreement between GTI and Circle K, we assume that GTI intends to comply with all regulations required of a MMTC dispensing location (i.e., those concerning security, lighting, waiting rooms, etc.). For instance, § 381.986(8)(f), Florida Statutes (F.S.), requires the following regarding safety and security. Where the dispensing of marijuana occurs, an MMTC is required to maintain a fully operational security alarm system that secures all entry points and perimeter windows and is equipped with motion detectors; pressure switches; and duress, panic, and hold-up alarms; and maintain a video surveillance system that records continuously 24 hours a day and meets certain criteria. An MMTC must also ensure that its outdoor premises have sufficient lighting from dusk until dawn; and that the indoor premises where dispensing occurs includes a waiting area with sufficient space and seating to accommodate qualified patients and caregivers and at least one private consultation area that is isolated from the waiting area and area where dispensing occurs. An MMTC may not display products or dispense marijuana or marijuana delivery devices in the waiting area. In addition, an MMTC must not dispense from its premises marijuana or a marijuana delivery device between the hours of 9 p.m. and 7 a.m. but may perform all other operations and deliver marijuana to qualified patients 24 hours a day; and it must store marijuana in a secured, locked room or a vault. Further, it is required that at least two of an MMTCs employees, or two employees of a security agency with whom it contracts, be on the premises at all times where the storing of marijuana occurs.

The Florida Statutes also require GTI to submit the agreement with Circle K for approval to the Florida Department of Health’s Office of Medical Marijuana Use (“OMMU”). In fact, most deals like this include a condition that the agreement is contingent upon approval from the OMMU. Licensed MMTCs must always obtain approval from the OMMU before opening new dispensary locations. Further, § 381.986(8)(e), F.S., requires a licensed MMTC (i.e., GTI) to maintain compliance with the criteria demonstrated and representations made in its initial application. Upon request, however, the DOH may grant a MMTC a variance from the representations made in the initial application. The DOH will consider such request based upon the individual facts and circumstances surrounding the request. However, a variance may not be granted unless the requesting MMTC can demonstrate to the DOH that it has a proposed alternative to the specific representation made in its application which fulfills the same or a similar purpose as the specific representation in a way that the DOH can reasonably determine will not be a lower standard than the specific representation in the application. Moreover, if the agreement contemplates some sort of revenue sharing with Circle K, then this would certainly be a problem. But, again, we do not know the specific terms of the agreement. Surely, the DOH will make sure GTI can comply with all the safety and security requirements listed above before granting a variance and approving new dispensary locations.

The bottom line is this: do not be quick to believe headlines and read the body of the article. Circle K will NOT be selling marijuana and the DOH has not put a stop to the GTI-Circle K deal.

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How to Get a Marijuana License in Mississippi

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Mississippi legalized medical marijuana in February 2022, when Governor Tate Reeves signed the Mississippi Medical Cannabis Act (or Senate Bill 2095). The Mississippi Department of Revenue (MDOR) is responsible for the licensing of medical cannabis dispensaries, while the Mississippi State Department of Health (MSDH) is responsible for licensing medical cannabis cultivation, processing, testing, and other facilities. The MDOR, in collaboration with the MSDH, has worked to design and implement an electronic application process, and both Departments will begin accepting license applications in the coming weeks.

 

The Alcoholic Beverage Control Enforcement Division is the division within the MDOR for licensing and regulating dispensaries, and it will also be responsible for enforcing medical cannabis laws as they apply to the proper purchase, sale, and distribution of medical cannabis at dispensaries. The Mississippi Medical Cannabis Act defines the medical cannabis dispensary as “an entity licensed and registered with MDOR that acquires, possesses, stores, transfers, sells, supplies, or dispenses medical cannabis, equipment used for medical cannabis, or related supplies and educational materials to cardholders.” A dispensary can only be located in an area zoned commercial or in an area that is not otherwise prohibited from having commercial businesses.

 

Applicants for a Medical Cannabis Dispensary License must meet the following requirements to be eligible: individuals must be at least 21 years of age; any owner, board member, officer, or anyone with an economic interest in the entity must be at least 21 years of age; they cannot be currently serving as a member of the state Senate or House or be a spouse of a member of the state Senate or House through December 31, 2022; they must not have previously held a cannabis-related license that has been revoked; they must have no outstanding tax liabilities owed to the state; and they must have never been convicted of a disqualifying felony, as defined by the legalization law. Notably, however, applicants are not required to be residents of the State of Mississippi to obtain a dispensary license.

 

Medical Cannabis Dispensary License applications will be available via the state’s electronic medical cannabis licensing system no later than July 2022. MDOR will issue licenses within 30 days of receiving the completed application, including all required information and documentation. Before applying for a license, applicants will need to (i) register for a Mississippi Sales Tax account and receive a sales tax permit via TAP; and (ii) register with the Mississippi Secretary of State, for any applicable entity. If a company plans to apply for licensure through the MDOR or the MSDH for any aspect of the Mississippi Medical Cannabis Program, the company must first register with the Mississippi Secretary of State’s Office. As part of this registration, the entity will be required to select a NAICS Code that is specific to the type of licensure sought by the entity. For instance, the applicable NAICS Code is 111419 for prospective cultivators or growers; 424590 for processors and wholesalers; and 453998 for dispensaries.

 

Additionally, the following information must accompany a dispensary license application for review. If all this information is included, the applicant’s application will be considered complete and the application will then be processed within 30 days:

  • legal name and physical address of the business (P.O. Boxes are not allowed);
  • proof of Mississippi Secretary of State Registration, if applicable;
  • Mississippi Sales Tax Permit Number;
  • Management Service Agreements, if applicable;
  • Deed of Trust, Lease Agreement, or Contingent Agreement, if applicable;
  • Land Survey by a Mississippi-licensed surveyor proving that the main entrance of the dispensary is not within 1,000 feet of a school, church, or childcare facility’s nearest property boundary line;
  • Waiver of Minimum Distance Requirements (school, church, childcare), if applicable (form available on the MDOR website);
  • local business permit or license registration, if required by the city or county (if under construction, the projected date of issuance of the city or county license);
  • list of all parties with 10% or greater economic interest;
  • Acknowledgment of Waiver and Authorization to Release Information for each member (form available on the MDOR website);
  • list of professional licenses held by each member and verification(s) of good standing;
  • Licensee Certification/Oath (form available on the MDOR website);
  • diagram of the licensed premises;
  • operation plan;
  • security plan; and
  • first year license fees of $40,000, which includes the $15,000 nonrefundable application fee plus the $25,000 annual license fee

 

Meanwhile, the MSDH is currently working to establish licensing and patient registry structures and by June 2022 plans to begin accepting online license applications for patients; medical practitioners; cannabis cultivation facilities; cannabis processing facilities; cannabis testing facilities; cannabis waste disposal entities; and cannabis transportation entities. Once the application process begins in June, there will be a 30-day approval time for licensure applications, and a five-day approval time for program patients. For cultivation, specifically, the Mississippi Medical Cannabis Act requires that the cultivation of marijuana occur indoors in secure facilities, and that these facilities be located in Mississippi if they provide products available to those with patient identification cards.

 

 

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How to Get a Marijuana License in Alabama

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In May 2021, medical marijuana was legalized in the State of Alabama. The Alabama Medical Cannabis Commission (AMCC) was subsequently established to administer and enforce the laws and rules relating to medical cannabis in the state. It is the AMCC’s responsibility to implement and administer the law by making medical cannabis derived from cannabis grown in Alabama available to registered qualified patients and by licensing facilities that process, transport, test, or dispense medical cannabis. The AMCC licenses and regulates all aspects of medical cannabis, excluding cultivation which is primarily licensed and regulated by the Department of Agriculture and Industries.

 

Beginning on September 1, 2022, a person may apply to the AMCC for a license for an integrated facility or for a license as a cultivator, processor, secure transporter, state testing laboratory, or dispensary. A nonrefundable application fee of two thousand five hundred dollars ($2,500) must be paid at the time of filing the application to defray the costs associated with the background investigation conducted by the AMCC. The AMCC will review all applications for licenses and must determine whether to grant or deny a license not more than 60 days after the date a license application was submitted (unless the applicant was notified of a deficiency). Keep in mind that the AMCC must ensure that at least one-fourth of all licenses are awarded to businesses at least 51 percent of which are owned by members of a minority group, meaning individuals of African American, Native American, Asian, or Hispanic descent.  Licenses must be renewed annually.

 

The application for a license must be made under oath on a form provided by the AMCC and must contain certain information as prescribed by the AMCC, including, but not limited to, the following:

  • the name, business address, business telephone number, and social security number or federal tax identification number of the applicant;
  • the identities of certain individuals and business entities that have any ownership interest in the applicant;
  • whether an owner, director, board member, or individual with a controlling interest in the applicant has been indicted for, charged with, arrested for, or convicted of, pled guilty or nolo contendere to, forfeited bail concerning any criminal offense under the laws of any jurisdiction, either felony or controlled substance-related misdemeanor, not including traffic violations, regardless of whether the offense has been reversed on appeal or otherwise, including the date, name and location of the court, arresting agency, and prosecuting agency, the case caption, the docket number, the offense, the disposition, and the location and length of incarceration;
  • whether an applicant has ever applied for or has been granted any commercial license or certificate issued by a licensing board or commission in the state or any other jurisdiction that has been denied, restricted, suspended, revoked, or not renewed and a statement describing the facts and circumstances concerning the application, denial, restriction, suspension, revocation, or nonrenewal, including the licensing board or commission, the date each action was taken, and the reason for each action;
  • whether an applicant has filed, or been served with, a complaint or other notice filed with any public body, regarding the delinquency in the payment of, or a dispute over the filings concerning the payment of, any tax required under federal, state, or local law, including the amount, type of tax, taxing agency, and time periods involved;
  • a statement listing the names and titles of all public officials of any unit of government, and the spouses, parents, and children of those public officials, who, directly or indirectly, own any financial interest in, have any beneficial interest in, are the creditors of or hold any debt instrument issued by, or hold or have any interest in any contractual or service relationship with an applicant;
  • the anticipated or actual number of employees and projected or actual gross receipts;
  • financial information in the manner and form required by the AMCC;
  • records indicating that a majority of ownership is attributable to an individual or individuals with proof of residence in the state for a continuous period of no less than 15 years preceding the application date; and
  • for an applicant seeking an integrated facility or cultivator license, records indicating that a majority of ownership is attributable to an individual or individuals, or an entity or entities, with cumulative business experience in the field of commercial horticulture or agronomic production for a period of at least 15 years.

 

Additionally, each owner, shareholder, director, board member, and individual with an economic interest in an applicant will have to submit to a state and national criminal background check. Further, an applicant must provide written consent to inspections, examinations, searches, and seizures and to disclosure to the AMCC and its agents of otherwise confidential records, such as tax records. An applicant must also certify that the applicant does not have an economic interest in any other license.

 

An applicant will be ineligible to receive a license if an owner director, board member, or individual with a controlling interest in the applicant has been convicted of or released from incarceration for a felony within the past 10 years or has been convicted of a controlled-substance related felony within the past 10 years, excluding any conviction overturned on appeal or any charge that has been expunged. Further, an owner, director, board member, or individual with an economic interest in the applicant cannot be a member of the AMCC. An applicant will also be deemed ineligible if they fail to demonstrate an ability to maintain adequate minimum levels of liability and casualty insurance.

 

Moreover, the AMCC, in determining whether to grant a license to an applicant, will consider several factors, such as the integrity, moral character, and reputation; financial ability and experience; and responsibility or means to operate or maintain a facility of the applicant. The AMCC will also consider the financial ability of the applicant; the sources and total amount of the applicant’s capitalization to operate and maintain the proposed facility; whether anyone involved with the business has a criminal record; whether the applicant has filed, or had filed against it, a proceeding for bankruptcy within the past 7 years; whether the applicant has a history of noncompliance with any regulatory requirements in the state or other jurisdictions; whether at the time of application, the applicant is a defendant in litigation involving its business practices; the applicant’s ability to capitalize and conduct operations as proposed in its business plan, including business experience in related fields; the applicant’s history of business activities as it applies to the specific license for which the applicant is seeking licensure; and the proposed location of all proposed medical cannabis facilities as being suitable for all activities, not inconsistent with applicable zoning, and the applicant’s ability to serve an identifiable geographic area.

 

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Pigford/Black Farmers Litigation Marijuana License Finally Becomes Available

Since medical marijuana regulations were established by the Florida legislature in 2017, there has been a marijuana license set aside for an applicant from the “Pigford Class” (“Pigford”) or a member of the “Black Farmers Litigation” (“BFL”). A Pigford class is one of two groups of Black farmers who had won a judgment from the U.S. Department of Agriculture for the agency’s history of racial discrimination in Pigford v. Glickman, 206 F.3d 1212 (D.C. Cir. 2000). In addition, a BFL is class member of In re Black Farmers Litigation, 856 F. Supp. 2d 1 (D.D.C. 2011). Florida’s Department of Health (“DOH”), which oversees the state’s medical marijuana industry, has not developed rules to award a medical marijuana treatment center (“MMTC”) license to a Pigford or BFL applicant until almost five (5) years after the creation of the state’s marijuana industry. On October 14, 2021, the rules to issue a marijuana license to a Pigford or BFL applicant were finally released. The DOH will issue one (1) marijuana business license to a Pigford or BFL applicant.

 

The DOH will adopt a separate rule that establishes the exact dates of the application window for qualified applicants to submit their application. The application window shall be a five (5) day period.  Along with the application, the applicant will pay a non-refundable application fee in the amount of $146,000.  Any application submitted in the Pigford/BFL batching cycle will not be considered for any other MMTC application batching cycle that may be held in the future.

 

In each MMTC application, the applicant must submit the following information:

 

Application Contents: Maximum Number of Pages Number of Points
Applicant Information Requested Form Only N/A
Declaration of Exempt Information No Page Limit N/A
Florida Business Registration No Page Limit N/A
Cultivation Plan + Cultivation Infrastructure + Ability to Secure Cultivation Infrastructure 24 200
Processing Plan + Processing Infrastructure + Ability to Secure Processing Infrastructure 24 200
Dispensing Plan + Dispensing Infrastructure + Ability to Secure Dispensing Infrastructure 24 200
Premises Security + IT Security + Diversion, Unlawful Access, and Transportation + Personnel Screening and Training + Recalls 24 200
Business’ Experience in the Marijuana Industry + Other Relevant Experience + Business Plan + Prior Enforcement Action 15 (for Experience and Business Plan) 200
Medical Director’s Experience in the Marijuana Industry + Other Relevant Experience + Oversight + Managing Conflicts of Interest + Medical Director Acknowledgement of Course Completion 11 200
Personnel Qualifications + Drug-Free Workplace + Personnel Training 18 200
Certified Financial Statements + Available Funding + Projected Budget 10 (for Funding and Budget) 200
Ownership Information + Capitalization Tables, Change of Control, and Related Entities Requested Information and Documents Only N/A
Applicant Acknowledgment Requested Documentation Only N/A
Pigford and BFL Documentation Requested Documentation Only N/A
  150+ pages 1,600 points

 

During the first round of evaluations, the DOH will determine if the applicant submitted all requested documentation, including evidence of being a Pigford or BFL applicant. Once it’s determined that all required documentation is submitted, applications will be graded in subsequent rounds. To grade each application, the DOH will select and assign nine (9) evaluators who will substantively review, evaluate, and score each section of the marijuana business application where points are awarded. In the event of a tie for the Pigford or BFL license, the Department will conduct a series of tiebreakers which include:

  1. The first tiebreaker will be for the section Financial Information and Available Funding. The applicant with the highest score in in this section among the tied applicants shall be awarded the license. If does not resolve the tie, then:
  2. The second tiebreaker will be based upon the score for the section Ability to Execute Proposed Cultivation, Processing, Dispensing, and Security and Accountability Plans. The applicant with the highest score in this section among the tied applicants will be awarded the license.

There are nine (9) total initial tiebreakers. If the nine (9) initial tiebreakers cannot successfully choose the winning MMTC license, the tied applicants’ applications will be independently reviewed again by the evaluators for the sole purpose of determining which of the tied applicants is best as between the tied applicants only. Each evaluator will be asked to select the best of the tied applicants in the evaluator’s designated applicant section. No scoring will be performed during the section round of tiebreaker evaluations. The Pigford or BFL applicant who is selected as best by the highest number of evaluators will be awarded the MMTC license.

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Webinars: New Jersey Cannabis Licensing Q&A

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