Cannabis Law and Policy
Turning Insight Into Action
NFL Approving of Marijuana?
Two recent events serve as continuing examples of how attitudes towards marijuana are changing in the U.S. The National Football League (“NFL”), which strictly enforces its drug policies, may be changing its mind on medical marijuana. The NFL Players Association (“NFLPA”) has already been working on its own study for the potential use of medical marijuana for pain management. On August 1, 2017, the NFL wrote a letter to the NFLPA indicating its willingness to work together to study the potential use of marijuana for pain management and for acute and chronic conditions for players.
Further, former players have come out in favor of the use of marijuana for medical reasons. For example, on July 24, 2017, former New York Jets Defensive End Marvin Washington was one of five plaintiffs in a lawsuit filed in the Southern District of New York against Attorney General Jeff Sessions, the Department of Justice, and the Drug Enforcement Agency. See Washington, et al. v. Sessions, et al., No. 1:17-cv-05625 (S.D.N.Y.). The lawsuit seeks to remove marijuana from the list of Schedule I drugs, as it is currently classified under the Controlled Substances Act. Marijuana is classified in the same category as heroin, LSD, and Quaaludes, to name a few. However, drugs such as methamphetamine and cocaine are classified as Schedule II drugs and are subject to less strict enforcement.
Massachusetts Supreme Court Allows Disability Discrimination Claim For Use of Medical Marijuana
In Cristina Barbuto v. Advantage Sales & Marketing LLC and Joanne Meredith Villaruz, Massachusetts Supreme Judicial Court Case No. SJC-12226, the Massachusetts Supreme Court held on July 17, 2017, that an employee in Massachusetts can bring a claim of disability discrimination after being fired for using medical marijuana.
Medical marijuana was approved by Massachusetts voters in 2012, and the law provides that individuals who qualify for the use of medical marijuana cannot be punished for using it. Barbuto suffers from Crohn’s disease and was using medical marijuana two to three times per week, although never during the work day, when she began working for Advantage Sales in 2014. After failing a mandatory drug test, Barbuto was terminated by Advantage Sales on the basis that Advantage follows federal law and not state law, and of course the use of marijuana is illegal under federal law.
In upholding Barbuto’s right to bring a disability discrimination claim under State law, the Massachusetts’ high court stated that although an employee’s possession of medical marijuana may violate federal law, that fact does not make it a per se unreasonable accommodation. The court further stated that even if allowing the use of medical marijuana was unreasonable, Advantage should have still engaged in the interactive process with Barbuto to determine if there was another potential, reasonable accommodation, such as using another drug that did not violate the company’s drug policy. Advantage will have the opportunity to demonstrate the unreasonableness of medical marijuana as an accommodation on remand.
While the court allowed Barbuto’s disability claim to stand, it did state that employers do not have to tolerate the use of medical marijuana during work time, nor allow medical marijuana for individuals in safety-sensitive jobs or those covered by the federal drug-free workplace laws. The court additionally stated that there is no implied statutory cause of action for individuals alleging a violation of the state’s medical marijuana law.
As reported in prior postings, Ohio’s medical marijuana law is much more protective of employers than the law passed in Massachusetts, but it is of course difficult to prevent determined courts from finding ways around what would otherwise be clear provisions of the law.
The Trump Administration’s Ever-Wavering Position on Marijuana
The uncertainty as to how the Trump administration will proceed in the current environment of marijuana being illegal under federal law while legal, to some extent, in 29 states, has not yet caused significant angst within the $6 billion marijuana industry. Attorney General Sessions’ most recent statements on the issue may change that.
On Monday, June 12, 2017, Massroots.com published a letter it was able to obtain, that Sessions sent to Senators McConnell and Schumer, and Speaker Ryan and Representative Pelosi on May 1, 2017. In this letter, AG Sessions renewed the DOJ’s opposition to the Rohrabacher-Farr amendment. (The law which prohibits the DOJ from spending funds to interfere with the implementation of state marijuana laws.) He asked that Congress not include such restrictions in DOJ appropriations. Sessions cites “an historic drug epidemic,” “potentially long-term uptick in violent crime,” and that smoking marijuana “has significant health effects,” to support his position in this letter. Sessions also states that drug traffickers and criminal organizations cultivate and distribute marijuana and do so “under the guise of medical marijuana laws.”
It is not yet clear what effect, if any, this letter will have. Nonetheless, it seems to signal a change in the Trump Administration’s stance on marijuana that could turn a $6 Billion industry on its head.
A copy of the letter can be obtained at: https://www.scribd.com/document/351079834/Sessions-Asks-Congress-To-Undo-Medical-Marijuana-Protections.
Ohio Marijuana Law Update: cultivator applications, processor rule changes, proposed THC limits, and the ever-shifting federal landscape
Has it really been more than a month since my last post? Holy cow, we’ve got a lot to cover. Here’s what you need to know about what’s been happening in Ohio’s medical marijuana industry.
Cultivator applications due in June
The biggest news is that the Department of Commerce has finally given us all an indication of when we can expect medical marijuana cultivator applications to be due:
- The applications will be released in mid-late April;
- Level II applications will be due in early-mid June;
- Level I applications will be due in mid-late June.
The Department has scheduled two separate deadlines for applications because it does not know how many applications to expect, and does not want to be overwhelmed at the outset. We should have a much better idea of the hard deadlines once the applications themselves are released.
Interestingly, following the release of the applications later this month, the Department will hold a webinar explaining the applications, followed by two 1-week periods in which the public can submit questions for clarification on the application. The webinar, as well as answers to any questions, will all be posted on the Medical Marijuana Control Program website.
We do not know much about the substance of the application yet, except that it will contain two main sections:
- Section 1: Applicants will be identifiable and will address mandatory requirements (presumably the required liquidity, compliance with tax laws, background checks, etc.). This Section will be scored on a pass/fail basis.
- Section 2: Applicants will be anonymous and will address the remaining portions of the application. This Section will be scored based on the rubric prepared by the Department. This Section will be scored by three teams, each identifying specific parts of the application:
- Operations & Quality Assurance Plans;
- Financial & Business Plans; and
- Security Plans.
Also, the Department of Commerce has totally eliminated the designated territories referenced in the last post, so it will judge all of the cultivator applicants in each Level against one another statewide. This is a welcome change, in my opinion. You can view the latest medical marijuana cultivator rules by clicking here.
The financial requirements for processors have been amended
The Department also has provided some information regarding updates to the rules for medical marijuana processors. To begin, the designated territories have been removed (as was the case for cultivators), although the total number of medical marijuana processors to be licensed in Ohio remains at 40.
There have also been changes to the financial requirements for processors:
- The liquid capital requirement for processors is $250,000, although if the applicant already holds a cultiavator provisional license and will be located within the same facility as the cultivator, then the liquidity requirement is $100,000;
- The escrow/surety bond requirements have been reduced from $500,000 to $250,000.
Various other changes have been made to the processor rules, including changes to non-solvent extraction methods, the ability to acquire expired medical marijuana from dispensaries, and packaging/labeling requirements. This updated draft will now be submitted to the Common Sense Initiative and, accordingly, there will be further opportunity for public comment. The updated rules for processors have not yet been posted publicly, but when they are they can be viewed by clicking here.
The Board of Pharmacy will limit medical marijuana possession based on THC content
The State Board of Pharmacy has taken an unusual step of limiting the statutorily-mandated 90-day supply based on THC content. Here are the limits of medical marijuana that may be possessed by Ohio patients in each 90-day period as initially proposed by the Board:
Note: for medical marijuana products the supply is limited based THC content, not the overall weight of the product. You can review the Board’s reasoning by clicking here. Read the full draft of form and method rules by clicking here.
Congress signals a willingness to consider marijuana reform while the Trump administration signals a willingness to engage in stricter enforcement
We are all watching Attorney General Jeff Sessions, Press Secretary Sean Spicer, and everyone else in the Trump administration to try to figure out how they will approach state-legal marijuana markets throughout the country. Initially, Sean Spicer warned that we might see stepped-up enforcement, although he also indicated that the administration may take different approaches for adult-use and medical marijuana markets.
Jeff Sessions has also said that the 2013 Cole Memo was “valid,” and recognized that the Department of Justice may not have the resources to start prosecuting state-legal operators. That being said, he’s kept up his drug warrior rhetoric in public.
Most recently, a DOJ task force has been formed to address crime reduction and public safety. Part of their job will be to review policies relating to “charging, sentencing, and marijuana” to “ensure consistency with the Department’s overall strategy on reducing violent crime and with Administration goals and priorities.”
Here’s some unsolicited advice for Attorney General Sessions and his Task Force: if you want to reduce violent crime, then leave states alone to regulate marijuana to eliminate the black market, increase transparency and safety, and take money away from dangerous cartels.
Meanwhile, over in Congress there have been several bills introduced in both the House and the Senate — by both Republicans and Democrats — that would reform federal marijuana laws in various ways. Marijuana Business Daily provides a good summary of some of the proposed legislation that has been introduced, and their would-be impact on marijuana businesses:
- H.R. 331: States’ Medical Marijuana Property Rights Act;
- H.R. 714: Legitimate Use of Medicinal Marijuana Act;
- H.R. 715: Compassionate Access Act;
- H.R. 975: Respect State Marijuana Laws Act;
- H.R. 1227: Ending Federal Marijuana Prohibition Act;
- S.776: Marijuana Revenue and Regulation Act;
- S. 777: Small Business Tax Equity Act;
- S. 780: Responsibly Addressing the Marijuana Policy Gap Act;
- H.R. 1810: Small Business Tax Equity Act;
- H.R. 1820: Veterans Equal Access Act;
- H.R. 1823: Marijuana Revenue and Regulation Act;
- H.R. 1824: Responsibly Addressing the Marijuana Policy Gap Act; and
- H.R. 1841: Regulate Marijuana Like Alcohol Act.
While passage of these bills may be a pipe dream, this could signal an increasing likelihood of reform on the federal level sometime in the next few years.
Join me at the Marijuana Business Conference & Expo in Washington D.C.
Last but not least, come out to the Spring Marijuana Business Conference & Expo sponsored by Marijuana Business Daily! The conference will take place from May 16-19 in Washington, D.C., and takes place during the same time as the National Cannabis Industry Association Lobby Days. The Conference will feature over 60 presenters, 275 exhibitors, and attendance is expected to top 3,500 cannabis industry professionals. Believe me when I tell you that this is a terrific conference that you do not want to miss.
I will be speaking about Ohio’s market on the Friday of the Conference, so you know there will be some information directly applicable to prospective Ohio medical marijuana cultivators, processors, and dispensary owners. Message me if you would like a discount code to get an additional $50 off of your admission!
As always, if you are interested in becoming involved in Ohio’s medical marijuana industry, don’t hesitate to give me a call at (216) 566-8200.
Join me at the Ohio Canna-Business Seminar!
This Saturday, February 25, I will be speaking on a panel at the MPP Ohio Canna-Business Seminar in Columbus. My firm, Seeley, Savidge, Ebert & Gourash Co., LPA, is also one of the event’s sponsors.
MPP promises “a deep dive into Ohio’s emerging medical cannabis program in Columbus.” The Seminar will feature policy and industry experts, as well as Ohio medical marijuana regulators. Topics covered will include best practices for operating in Ohio’s medical marijuana market, accounting, tax, and liability issues.
The Seminar will be hosted at the Sheraton Columbus Hotel at Capitol Square, located at 75 East State Street, Columbus, OH, 43215. Tickets are $600 each, two for $1,000, or three for $1,300. The seminar will run from 10 a.m. to 5:30 p.m. and will include a boxed lunch. But, shoot me an email at tharen@sseg-law.com and I’ll give you a promotional code for a discount on your ticket!
Click here to register for the event. See you there!
Department of Commerce announced cultivator territories and draft processor rules, Board of Pharmacy hints at dispensary rule changes
Ohio medical marijuana cultivator territories announced
The Department of Commerce recently identified how it will designate territories for Ohio medical marijuana cultivators. By way of background, the current draft of Section 3796:2-1-01(A) provides for up to three Level I cultivators and three Level II cultivators in each of 4 designated territories. This is a change from the original drafts where the Department was to split up Ohio into 12 designated territories.
The Department announced recently precisely how it intends to divide the state for purposes of cultivator licenses, and the result ends up with Northeast Ohio’s quadrant including what will likely be 4 of the more competitive counties in the state for medical marijuana cultivation: Cuyahoga, Summit, Mahoning, and Lorain. Here is an image from the Department’s announcement:
This design runs the real risk of making some quadrants so competitive that well-qualified applicants are shut out based solely on the number of applicants in that territory. In other words, the 5th best Level I applicant in Northeast Ohio may very well be a more qualified applicant than the top applicant in Northwest Ohio, but there will only be 3 Level I licenses awarded in Northeast Ohio. Furthermore, such large territories may encourage consolidation of applicants in closer proximity, as opposed to having cultivators more widely disbursed as would be the case if Ohio had a larger number of territories.
It will be interesting to see if this map changes at all as we continue with the rule-making process, and do not be surprised to see some border counties transition into neighboring territories (for instance, Lorain could very well end up as part of the Northwest quadrant).
Changes to Ohio medical marijuana dispensary rules
On January 27, the Ohio Medical Marijuana Advisory Board met and received an update from the Board of Pharmacy on the comments received relative to the proposed dispensary rules. Notably, the Board referenced three major changes to its initial draft rules:
- The number of licensed dispensaries will be increased from 40 to 60 statewide;
- The $80,000 biennial fee to renew a dispensary license will be reduced (although we do not know what the reduced fee will be); and
- The Board will remove the requirement of having a “clinical director” either on-site or available by phone during hours of operation (I discussed the clinical director previously).
New dispensary rules have not yet been issued, but rest assured I will post an update when they are.
Proposed Ohio medical marijuana processor rules
The Department of Commerce also proposed its initial set of draft rules for Ohio medical marijuana processors. The first round of public comments are being accepted through close of business on February 10, 2017. Here are the highlights:
- The Department will license 40 medical marijuana processors, with 10 processors in a given territory (my educated guess is that the Department will utilize the same territories for processors as it does for cultivators);
- Once an applicant is awarded a provisional license, the applicant will have six months to get its facility up and running before it can receive its certificate of operation;
- Processors must either maintain a surety bond in the amount of $750,000 or an escrow account in that amount, and must also demonstrate that it has $250,000 in liquid assets; and
- Processor application fees will be $10,000 to apply; $90,000 to obtain a certificate of operation; and $100,000 annually to renew a processor license.
Check out the latest draft processor rules by clicking here.
We know from the draft cultivator rules that Ohio will award “plant-only processor” licenses to cultivators who wish to sell plant material directly to dispensaries, although those entities will have to meet more stringent packaging and labeling requirements than other cultivators. These plant-only processor licenses will cost $5,000 for Level I cultivators and $500 for Level II cultivators.
Stay tuned as Ohio continues its rule-making process. And, in the event you are interested in getting involved in Ohio’s medical marijuana industry (whether as a cultivator, processor, or dispensary operator), don’t hesitate to contact us at (216) 566-8200 for a free consultation to discuss your plans.
Medical Marijuana in Ohio in 2017
Hi everyone – it’s been a little while since I’ve posted here. Our family moved, work got busier than anticipated (which is a good thing), and all of that occurred right smack in the middle of the holiday season. But fear not, the Ohio Marijuana Law Blog is back in full swing to keep you updated on all of the latest news on medical cannabis in the Buckeye State.
Ohio continues the medical marijuana rule-making process
The rules for Ohio medical marijuana cultivators will be finalized in May, with the rules for medical marijuana dispensaries, processors, testing laboratories, and recommending physicians finalized in September. The Ohio cultivator rules have been submitted to the Common Sense Initiative, and public comment on the rules are being accepted through this Friday, January 27. Ohio dispensary rules are in their initial draft, although this round of public comments closed on January 13 – there will be other opportunities to provide input.
Some highlights from these latest drafts:
- The number of Level II cultivator licenses has increased to 12, and the “marijuana cultivation areas” of both categories has increased: Level I cultivators can have a cultivation area of 25,000 square feet, while Level II cultivators are limited to a cultivation area of 6,000 square feet.
- If approved by the Department of Commerce, cultivators can expand their facilities not more than twice, each time up to doubling their original size – meaning that Level I cultivators could potentially obtain 75,000 square feet of cultivation area, while Level II cultivators could potentially obtain 9,000 square feet of cultivation area.
- Ohio would license up to 40 medical marijuana dispensaries, dispersed throughout the state in yet-to-be-defined geographic territories.
- The Board of Pharmacy would require dispensaries to have a “clinical director” either on-premises or available by phone during all hours that dispensaries are operating. A “clinical director” can be either a pharmacist, physician, physician assistant, certified nurse practitioner, or clinical nurse specialist.
I’ll cover each of these drafts in greater detail here in the coming days. It is interesting to note that a draft of House Bill 523 originally required a pharmacist to be present in medical marijuana dispensaries, although that requirement was removed prior to the law going up for a vote. Now it seems the Board of Pharmacy is seeking to re-insert a similar requirement.
The United States Senate Has Yet to Confirm Attorney General Nominee Jeff Sessions
Alabama Senator Jeff Sessions, whom President Donald Trump has nominated to be his next Attorney General, is waiting on confirmation from the United States Senate. His confirmation hearings generally went off without a hitch, and when asked about legal marijuana, Sessions would not commit to “not enforcing federal law,” although he acknowledged the problem with scarce federal resources.
On Tuesday, Sessions was not quite as emphatic on the issue as he has been in the past. In reference to the guidelines issued by the Justice Department in 2013 that effectively left marijuana law enforcement up to individual states, Sessions told Sen. Leahy “some of them are truly valuable in evaluating cases, but, fundamentally, the criticism I think that is legitimate is that [the guidelines] may not have been followed.” Sessions went on to say he would need to use “good judgment” when deciding how to enforce federal marijuana laws, should he be sworn in as Attorney General, adding “I know it won’t be an easy decision, but I will try to do my duty in a fair and just way.”
Following his confirmation hearings, Sessions provided written responses that again addressed legal marijuana (which are conveniently packaged in Tom Angell’s new daily marijuana newsletter, which you should all subscribe to):
- “While I am generally familiar with the Cole memorandum, I am not privy to any internal Department of Justice data regarding the effectiveness and value of the policies contained within that memorandum… I will certainly review and evaluate those policies, including the original justifications for the memorandum, as well as any relevant data and how circumstances may have changed or how they may change in the future.”
- “I will not commit to never enforcing Federal law. Whether an arrest and investigation of an individual who may be violating the law is appropriate is a determination made in individual cases based on the sometimes unique circumstances surrounding those cases, as well as the resources available at the time.”
- A recent federal court ruling that a Congressional rider prevents the Justice Department from going after people complying with state medical marijuana laws “is relatively recent, and I am not familiar with how other courts may have interpreted the relevant appropriations language or the Ninth Circuit’s opinion. As an emerging issue, that is one that will need to be closely evaluated in light of all relevant law and facts… I will conduct such a review. Of course, medical marijuana use is a small part of the growing commercial marijuana industry.”
- On “good people don’t smoke marijuana”: “My words have been grossly mischaracterized and taken out of context… I was discussing the value of treating people for using dangerous and illegal drugs like marijuana, and the context in which treatment is successful.”
- “I echo Attorney General Lynch’s comments [on marijuana being illegal], and commit, as she did, to enforcing federal law with respect to marijuana, although the exact balance of enforcement priorities is an ever-changing determination based on the circumstances and the resources available at the time.”
- “I will defer to the American Medical Association and the researchers at the National Institutes of Health and elsewhere about the medical effects of marijuana. Without having studied the relevant regulations in depth, I cannot say whether they may need to be eased in order to advance research; but, I will review this.”
There can be no doubt that Senator Sessions is a marijuana prohibitionist, but I do think it is fair to say that his responses are no worse than those given by President Obama’s Attorney General, Loretta Lynch, during her own confirmation hearings in 2015. She said the following when questioned by Senstor Lindsey Graham:
“Marijuana is still a criminal substance under federal law. And it is still a crime not only to possess, but to distribute under federal law.”
“With respect to the marijuana enforcement laws, it is still the policy of the administration and certainly would be my policy, if confirmed as attorney general, to continue enforcing the marijuana laws, particularly with respect to the money-laundering aspect of it.”
And she also said this when questioned by Senator Sessions:
“Well, senator, I certainly don’t hold [the view that marijuana should be legalized], and don’t agree with that view of marijuana as a substance. I certainly think that the president was speaking from his personal experience and personal opinion — neither of which I am able to share.”
Sessions can rescind the 2013 Cole Memo at a moment’s notice following his confirmation, although there are significant practical and political risks to doing so: more than half the country has legalized some form of medical marijuana and the industry supports thousands of jobs and a significant amount of taxes to cash-strapped states. For some additional context, see this great article over at The Cannabist: “Would he revive the war on drugs? Five myths about Sen. Jeff Sessions.“
It should also be remembered that Donald Trump has previously expressed his support for legal marijuana, including saying that he supported medical marijuana “100 percent.” His new press secretary, Sean Spicer, implied during Sessions’ confirmation hearings that any member of Trump’s cabinet would implement the “Trump agenda:”
[youtube https://www.youtube.com/watch?v=h96dbjDJbew]
Stay tuned as Ohio moves forward with implementing its medical marijuana program over the coming months.
Ohio Medical Marijuana Law Already Causing Confusion
The time between “legalization” and implementation seems to have caused confusion about the current use of medical marijuana in Ohio. HB 523 became “law” on September 28, 2016. Regulations for cultivators are set to be finalized by May 6, 2017. Regulations for physicians, testing laboratories, processors, patients, caregivers, employees, and dispensaries are scheduled to be finalized on September 8, 2017.
There is at least one medical center where a physician or physicians issue “recommendations” for medical marijuana to patients who are found to have a “qualifying condition” under H.B. 523. This center also issues an “affirmative defense card.” Since none of the procedures are in effect at this time, this practice presents several issues.
One issue is whether a physician can recommend marijuana to patients before he/she has a certificate to recommend. Currently, there are no final regulations in place for physicians to obtain a certificate to recommend medical marijuana. Additionally, according to H.B. 523, a patient can only legally obtain medical marijuana after receiving a written recommendation from his or her doctor that certifies a certain number of criteria are met. There are currently no regulations in place that would enable a physician to issue such a recommendation. Thus, it would seem to be currently impossible for a “certificated” physician to lawfully “recommend” the current use of medical marijuana in Ohio.
Under these circumstances, no individual can currently possess an “affirmative defense card” that would be valid in Ohio. Perhaps the “affirmative defense card” issued by this medical center is effective in states that have reciprocity with other medical marijuana states? The closest of these states to Ohio is Michigan. In Michigan, a visiting qualifying patient can only obtain medical marijuana if that patient has an ID card or its equivalent “issued under the laws of another state, district, territory, commonwealth, or insular possession of the United States.” Since the affirmative defense card is not issued by the State of Ohio, as that program is not yet operational, it is doubtful that Michigan dispensaries can legally dispense marijuana to patients who have been issued an ID card by a private Ohio medical center.
If Michigan dispensaries do dispense medical marijuana to Ohio patients with a private “affirmative defense card,” another related issue is whether patients are violating federal law by bringing marijuana across state lines to Ohio. Former Deputy Attorney General, James Cole, issued a memorandum to all United States Attorneys on August 29, 2013 to provide guidance on the proper prioritization of marijuana enforcement. One enforcement priority, where the Department of Justice may prosecute, is if there is diversion of marijuana from states where it is legal to other states.
Ohio has enacted a law that set forth a process that will make medical marijuana legal, but the details of that legalization are being phased in over a two-year period. This seems to have resulted in marijuana being recommended and dispensed to, and consumed by, citizens of the State of Ohio before these practices are lawful. We are not aware of any criminal prosecutions arising out of this situation, however, and we do know that individuals are acting as if they believe it is legal to consume medical marijuana in Ohio. We would say it is not.
Trump taps Jeff Sessions for Attorney General nominee: what does this mean for legal marijuana?
The cannabis community has been eagerly waiting to learn whom Donald Trump would nominate as the nation’s top law enforcement officer, and it appears we have our answer: Alabama Senator Jeff Sessions. So what does this mean for legal marijuana?
Let’s first start with a quick overview of the current federal approach to marijuana in legal states. In 2013, Deputy Attorney General James Cole issued a memorandum to all United States Attorneys related to marijuana enforcement. Cole recognized that the Department of Justice had “limited investigative and prosecutorial resources,” and accordingly the Department was focusing its efforts on enforcement priorities that were “particularly important” to the federal government:
- Preventing the distribution of marijuana to minors;
- Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels;
- Preventing the diversion of marijuana from states where it is legal under state law in some form to other states;
- Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
- Preventing violence and the use of firearms in the cultivation and distribution of marijuana;
- Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
- Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and
- Preventing marijuana possession or use on federal property.
In other words, if a state’s regulatory system does not implicate these enforcement priorities, and if marijuana enterprises are compliant with state law, then the Department of Justice would exercise its discretion and allow those enterprises to operate. Importantly, this policy is not set in stone, and is subject to review by subsequent administrations. Which brings us now to Donald Trump and his nominee for Attorney General, Jeff Sessions.
In interviews throughout the election season, Donald Trump was actually fairly consistent in his open-minded approach to legal marijuana. He told the Washington Post that “In terms of marijuana and legalization, I think that should be a state issue, state-by-state[.]” He also told Bill O’Reilly that he was in favor of medical marijuana “a hundred percent,” even though he thought that diversion into other markets was a problem (so did James Cole).
Jeff Sessions, however, has not been as open when it comes to legal marijuana. A former Attorney General for the State of Alabama, he famously joked that he thought the Klu Klux Klan was fine “until [he] found out they smoked pot.” He was nominated for a federal judgeship in 1986, but his nomination was rejected by the Senate Judiciary Committee (which was controlled by Republicans at the time, and is now the same Committee that Sessions chairs in the Senate).
In an exchange with Michele Leonhart during a Senate hearing in 2010, Sessions said the following:
“I’m a big fan of the DEA[.] * * * These legalization efforts sound good to people[.] They say, ‘We could just end the problem of drugs if we could just make it legal.’ But any country that’s tried that, Alaska and other places have tried it, have failed. It does not work[.] We need people who are willing to say that. Are you willing to say that?”
Sessions’ attitude appears to conflict with the attitude of the President-Elect who nominated him, and perhaps he will adopt the President-Elect’s federalist approach to legal marijuana. But given Sessions’ prior comments, the best case scenario for the legal marijuana industry may be to maintain the current status quo. For instance, with Sessions as the nation’s top law enforcement officer, it is probably unrealistic to expect that the DEA will revisit its decision not to reschedule marijuana.
Hopefully Americans will get insight into how a Sessions-led Department of Justice will treat legal marijuana during the confirmation process. Until that happens, it looks like the waiting game continues for legal marijuana entrepreneurs.
Ohio Department of Commerce Proposes Cultivator Rules: The Highlights
Earlier this month, the Ohio Department of Commerce issued proposed rules for Ohio cultivators. The proposal was met with significant opposition, not the least of which was the low number of licenses the Department proposed awarding. There is an opportunity for public comment, as outlined below:
- The initial public comment period ended on November 15 — this was the first opportunity for Ohio citizens to comment on the substance of the proposed cultivator rules.
- The Ohio Medical Marijuana Control Program is required to prepare a Business Impact Analysis and submit the analysis to the Common Sense Initiative office. The public will have an additional opportunity to offer input on the rules at this time.
- The Ohio Medical Marijuana Control Program will hold a public hearing between 30-41 days after the rules have been filed with Joint Committee on Agency Rule Review, which cannot happen until the Common Sense Initiative has provided input on the proposed rules. Public testimony will be accepted at this hearing.
- Finally, the Joint Committee on Agency Rule Review will hold a public hearing addressing a limited number of issues that are within the jurisdiction of the Committee:
- Do the rules exceed the agency’s statutory authority;
- Do the rules conflict with an existing rule of that agency or another state agency;
- Do the rules conflict with legislative intent;
- Has the rule-making agency prepared a complete and accurate rule summary and fiscal analysis of the proposed rule, amendment, or rescission (ORC 127.18);
- Has the rule-making agency met the incorporation by reference standards for a text or other material as stated in ORC sections 121.72, 121.75, or 121.76; and
- If the rule has an adverse impact on business (ORC 107.52), that the rule-making agency has demonstrated through the business impact analysis (BIA), the Common Sense Initiative Office (CSI) recommendations and the agency’s memorandum of response to the CSI recommendations, that the rule’s regulatory intent justifies its adverse impact on business.
The Department’s proposed rules for Ohio medical marijuana cultivators will significantly affect the supply of medical marijuana in Ohio, as well as the operation of the industry more generally. Below are some highlights (no pun intended) of what the Department has proposed:
- The Department will issue two tiers of cultivator licenses — 12 Level I licenses capped at 15,000 square feet of marijuana cultivation area, and 6 Level II licenses capped at 1,600 square feet of marijuana cultivation area.
- Flowering marijuana cannot constitute more than 75% of the marijuana cultivation area.
- Various felony offenses (for instance, drug offenses under R.C. 2925) will automatically disqualify interested applicants from obtaining medical marijuana licenses, although the Department may grant a hearing to allow applicants with only misdemeanor versions of those offenses to obtain a license.
- The Department defines (but provides no substantive regulations for) “plant only processors,” which the Department defines as cultivators that have “received a license . . . for the limited purpose of packaging, selling, and delivering finished plant material directly to a licensed dispensary for sale to a patient or caregiver.
- H.B. 523 allows for Ohio patients to purchase plant material from dispensaries, and the Department proposes defining “plant material” as “the leaves, stems, buds and flowers of the marijuana plant, [not including] seedlings, seeds, clones, stalks, or roots of the plant or the weight of any non-marijuana ingredients combined with marijuana.”
- Licenses will be split among various designated territories within Ohio, although the Department does not identify what those territories will be.
- Ohio medical marijuana cultivator license applicants will have to submit applications that include a business plan, an operations plan, a quality assurance plan, a security plan, and a financial plan.
- Ohio will charge a nonrefundable $20,000 fee to apply for a Level I cultivator license, and a $2,000 nonrefundable fee to apply for a Level II cultivator license.
- The Department of Commerce will issue provisional licenses to successful applicants, and then the applicant will have 9 months to execute the plans included in their applications. If the applicant can successfully do so, then a “certificate of operation” will be awarded.
- During the application process, an applicant must demonstrate that real estate is either leased or owned, or that the applicant has the ability to lease or purchase the property where the cultivation facility will be located.
- Applicants for Level I cultivator licenses will have to show liquid capital in the amount of $500,000, while applicants for Level II cultivator licenses will have to show liquid capital in the amout of $50,000. This means that the applicant will have the ability to liquidate that mount of money within 30 days.
- Level I cultivator applicants must have either $2 million in escrow or a $2 million surety bond. Level II cultivator applicants must have either $200,000 in escrow or a $200,000 surety bond.
- Provisional cultivator licenses are nontransferable, and ownership changes of operating cultivators are subject to approval by the Department.
- Cultivators must annually renew their certificates of operation. Level I cultivators must pay an annual renewal fee of $200,000, while Level II cultivators must pay an annual renewal fee of $20,000.
These rules are not yet finalized, and this list does not include all of the rules proposed by the Department. There remains an opportunity for public input, and if you are considering applying for an Ohio medical marijuana cultivator license it makes a lot of sense to get involved in the public comment process. The State needs to hear from concerned entrepreneurs and cannabis professionals so that Ohio has a functioning medical marijuana market by the target operational date of September 2018.