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Medical cannabis license chaos: Legal turmoil and oversight lapses

A cloud of confusion and apparent incompetence overshadows the licensing process, raising questions.

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In Alabama, ongoing legal turmoil surrounds the distribution of medical cannabis licenses, depriving those in need of its health benefits. This is despite the state Legislature and Gov. Kay Ivey’s intentions. A cloud of confusion and apparent incompetence overshadows the licensing process, raising questions and concerns.

Under the state’s medical cannabis law, the Alabama Department of Agriculture and Industries, alongside the Alabama Medical Cannabis Commission (AMCC), plays a pivotal role. However, the department’s responsibilities, especially concerning regulations and inspections, have been largely overlooked.

This neglect is becoming evident as the intricacies of the law unfold. State law mandates that the AMCC cannot issue licenses to any facility without prior inspection, ensuring compliance with stringent state requirements. However, the AMCC has circumvented this requirement by “awarding” licenses and deferring issuance until after inspection. When questioned about this deviation from the law, the AMCC cited staff shortages as a reason. But is this a genuine constraint, or is it a deliberate ploy, perhaps masking something more sinister?

Alabama Code 1975 § 20-2A-50 outlines the state’s preemptive regulation of medical cannabis from seed to sale. It specifies that all functions, including cultivation, must be licensed, with the Department of Agriculture and Industries responsible for cultivation. Despite this clear directive, the AMCC has not sought assistance or delegated application implementation duties to the Department of Agriculture and Industries.

A crucial unresolved issue in medical cannabis licensing is the lack of site inspections, critical for assessing potential licensees. Officially, personnel shortage is cited as the primary reason for bypassing this vital step. Notably, the Department of Agriculture, designated to oversee cannabis cultivation which includes inspections inexplicably been missing from the process.  

Under Ala. Code 1975 § 20-2A-50, the law states:

(a) The state hereby preemptively regulates medical cannabis from seed to sale and shall reasonably regulate and control all aspects of the medical cannabis industry to meet the intent of this chapter. All functions and activities relating to the production of medical cannabis in the state shall be licensed, and licenses shall be granted to integrated facilities, as well as to independent entities in the following categories: Cultivator, processor, dispensary, secure transporter, and testing laboratory.

(b) The commission shall license and regulate all aspects of medical cannabis under this article, excluding cultivation. The Department of Agriculture and Industries shall license and regulate the cultivation of cannabis. For integrated facility licenses, the commission and the department shall enter into a memorandum of understanding relating to the sharing of regulatory and licensing and enforcement authority over licensees with regard to the cultivation function.

Speculation is rife that manipulations in the licensing process, particularly post-2022 application guide and regulation releases, were tailored to favor certain entities, like multi-state cannabis companies. If agricultural inspectors had conducted site inspections, some facilities might have failed to secure licenses due to non-compliance. This raises suspicions of potential collusion, possibly to ease the pathway for selected applicants by sidelining the Department of Agriculture from its statutory role.

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In the summer of 2022, the Department of Agriculture established detailed regulations for cannabis cultivation. However, they unexpectedly ceased their involvement in this area without a stated reason, leaving the question as to why the department has withdrawn to the sidelines, especially given their regulatory and inspection mandate. The statute is still binding, and it requires Agriculture to be involved in the licensing and regulation of cultivation. The Agriculture Department wrote the regulations on cannabis cultivation, as was their statutory duty, and there’s no reason why Agriculture shouldn’t assist in licensing and inspection as required by the statute. The question arises, then, as to why they are not conducting these inspections.

Complicating matters from the beginning of the process was a complex scoring system that seemingly allowed some applicants to gain points, despite not meeting statutory requirements. The Department of Agriculture, despite its statutory obligation, has not conducted inspections, and the Cannabis Commission’s admission of insufficient manpower for site inspections casts doubts on their commitment to statutory adherence and their motives for excluding the Department from its role. This could be perceived as a maneuver to benefit multi-state operators who obtained licenses in the initial round by removing a key regulatory body from the process.

Currently, the AMCC is trying to protect its members from undergoing depositions that might shed light on these disconcerting issues. Montgomery Circuit Court Judge James Anderson is inclined to allow these depositions. It’s time to also scrutinize why the Department of Agriculture has been disengaged from its prescribed duties in this critical matter. Also, given the AMCC’s departure from the Legislature’s directive that the AMCC share regulatory duties with the Department of Agriculture and Industries, perhaps it’s time for the Legislature to weigh in and take action to ensure that the statutory requirements are effectuated.

Bill Britt is editor-in-chief at the Alabama Political Reporter and host of The Voice of Alabama Politics. You can email him at [email protected] or follow him on Twitter.

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