Alabama Legislature Considering Medical Marijuana Bill with Bipartisan Support

Firm Alert

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[This is the first in a series of client alerts regarding the status of medical marijuana efforts in Alabama.]

Is Alabama poised to join the growing number of states allowing the use of medical marijuana under state law? Late last month, State Rep. Mike Ball (R-Madison) introduced the Compassion, Access, Research, and Expansion (CARE) Act—a bill that would make medical cannabis available to Alabama patients for the first time. Sen. Tim Melson (R-1) introduced a companion bill on April 4, 2019. The text of Senate Bill 236 is identical to its companion in the House, and was referred to the Senate Committee on the Judiciary.

The Act provides for the growth, cultivation, sale, and consumption of all parts of the cannabis plant, including “the seeds, extractions of any kind … and every compound, derivative, mixture, product, or preparation of the plant.” The Act is supported by a bipartisan coalition that is composed of 20 co-sponsors, including the Republican Speaker of the House of Representatives, and it has been referred to the House of Representatives Committee on Health, where it awaits further action.

What Does This Mean for Patients and Healthcare Providers?

Under the terms of the Act as introduced, to receive a prescription for medical cannabis, patients must be 19 years or older and diagnosed with a “qualifying condition” by a physician, physician assistant, or nurse practitioner who has been certified to prescribe cannabis. The Act provides for 34 such qualifying conditions, including addiction, anxiety, cancer, cerebral palsy, chronic pain, chemotherapy-associated symptoms, depression, and a host of additional medical conditions. Patients with a “terminal condition” that causes “significant functional impairment” and is expected to result in death within six months after diagnosis likewise would be eligible to receive a prescription for medical cannabis. 

Under the Act, physicians, physician assistants, and nurse practitioners licensed in Alabama could prescribe medical cannabis after completing a two-hour course and examination.  Once patients receive a prescription, they or their caregivers are required to fill out an application form to obtain a medical cannabis card. The application must include proof that the patient is over 19 years of age, a written document confirming that the patient has been diagnosed with a qualifying condition, a full-face photograph, and be accompanied by a $65 application fee. Medical cannabis cards would expire two years from the date of issuance and would be renewable upon payment of a renewal fee. Patients would be tracked using a secure, statewide system that would record the name of patients or their caregivers, prescribing medical providers, the qualifying condition(s), and, if known, the type and quantity of medical cannabis product each particular patient is using. 

Importantly for patients, the Act explicitly states that it does not require insurers, managed care organizations, or health benefit plans to reimburse patients for the costs associated with medical cannabis. Similarly, employers are not required to make accommodations to patients that are prescribed medical cannabis. The Act likewise does not require any employer to allow use of medical cannabis in the workplace, modify job or working conditions for patients, or limit employers’ ability to establish and enforce a drug-free workplace program or policy.

Creation of the Alabama Medical Cannabis Commission

While the Act provides the broad contours for a potential medical cannabis regime in Alabama, it would largely place authority for specific regulations in the hands of a newly created Alabama Medical Cannabis Commission. The commission would be composed of nine members appointed by the Governor, Senate President Pro Tempore, and Speaker of the House of Representatives. The Governor would appoint one neurologist, one pain management physician, and one industrial systems or business professional. The Senate President Pro Tempore would appoint one oncologist, one general physician practicing in a rural or underserved community, and one member with experience in agricultural practices and multiple crop development. Finally, the Speaker of the House of Representatives would appoint a psychiatrist, a mental health or substance abuse professional, and a member with professional experience in agricultural systems management.

The commission would appoint a director who is required to be an Alabama-licensed attorney and that would serve as the chief administrative officer of the commission to oversee all personnel employed by the commission. The commission would also appoint a deputy director and, in consultation with the Alabama Department of Agriculture and Industries, a chief inspection and enforcement officer.    

What Does This Mean for Cannabis Growers, Distributors, and Retailers?

As is the case in every other state that permits medical cannabis at the state level, growers, distributors, and sellers of medical cannabis would have to be licensed. The Act provides for issuance of provisional fast track licenses prior to adoption of a formal process for approval of a licensing regime to govern growth and distribution of medical cannabis in the state. The Act requires the commission to adopt rules governing non-fast track license issuance no later than January 1, 2021.

The commission would be required to account for market demands for dispensaries, growth operations, and processing and manufacturing facilities when determining the number of licenses available. In issuing licenses, the commission is required to take into account the need for agricultural and business opportunities in communities, as well as the racial and economic makeup of the state. Licenses must be issued “in a manner that provides access to medical cannabis throughout rural and urban populations, taking into account the racial and economic makeup of the state.” This theme is carried throughout the Act—seemingly an attempt to ensure that medical cannabis is available throughout Alabama rather than simply in urban areas. Notably, though, and unlike other states with medical cannabis regimes, the Act in its present form does not set a limit on the number of licenses available.

A Source of Revenue?

Finally, the Act allows counties or local municipalities to tax the sale of medical cannabis up to 2.1% of gross sale proceeds. The Act taxes retail sales at 9% statewide, and imposes a tax “equal to 10 percent of the net worth for the previous fiscal year” for some medical cannabis companies. Interestingly, and consistent with the apparent effort to ensure that medical cannabis is available statewide, “rural licensees” are excluded from this 10% tax. The ultimate effect of this tax carve out would have to be seen upon adoption of a licensing regime, however it would seem to make rural areas more attractive for certain licensees. 

Conclusion

The Act’s likelihood of passage is uncertain at this point. Major stakeholders such as law enforcement and medical associations have not publicly taken a side and it is not yet evident whether an organized opposition from within these groups will emerge. The Rev. Joe Godfrey, director of the Alabama Citizen’s Action Program, issued a statement that the group opposed passage of the Act.

We will provide further updates on the Act as the legislative session—which is currently scheduled to end on June 17, 2019—unfolds. In the meantime, please do not hesitate to let us know if you have any questions or would like additional information about this area of the law.