Cannabis Business Executive
Will Mississippi join the growing number of states allowing the use of medical marijuana under state law? Mississippi voters will decide this issue in November. On January 7, 2020, the Mississippi Secretary of State’s office certified that a group seeking to legalize medical marijuana in the state had obtained the needed signatures to place the measure on the November ballot. What follows is a summary of the proposed law, how it impacts potential patients and business owners, and how the state may benefit from the initiative.
What will voters be asked to decide?
When Mississippi voters go to the polls to vote in the presidential election, they will also be asked: “Should Mississippi allow qualified patients with debilitating medical conditions, as certified by Mississippi licensed physicians, to use medical marijuana?”
If a majority of Mississippi voters vote “yes” to what is known as Ballot Initiative 65, the Mississippi Constitution will be amended to allow licensed treatment centers to provide medical marijuana to qualified patients with certain debilitating medical conditions, as certified by Mississippi licensed physicians. The Mississippi State Department of Health would regulate and enforce the provisions of the proposed amendment.
This summary uses several key phrases, which the proposed amendment defines as follows:
- “‘Caregiver’ shall mean a person who is at least twenty-one (21) years of age, who complies with the regulations prescribed by the department, and who assists with a qualified patient’s use of medical marijuana. The Department may limit the number of qualified patients a caregiver may assist at any one time. A qualified patient may have more than one caregiver. A caregiver is prohibited from consuming medical marijuana provided for use by a qualified patient.”
- “‘Qualified patient’ shall mean a person who has been diagnosed with a debilitating medical condition and who has been issued a physician certification.”
- “‘Debilitating medical condition’ shall mean cancer, epilepsy or other seizures, Parkinson’s disease, Huntington’s disease, muscular dystrophy, multiple sclerosis, cachexia, post-traumatic stress disorder, positive status for human immunodeficiency virus, acquired immune deficiency syndrome, chronic or debilitating pain, amyotrophic lateral sclerosis, glaucoma, agitation of dementias, Chron’s disease, ulcerative colitis, sickle-cell anemia, autism with aggressive or self-injurious behaviors, pain refractory to appropriate opioid management, spinal cord disease or severe injury, intractable nausea, severe muscle spasticity, or another medical condition of the same kind or class to those herein enumerated and for which a physician believes the benefits of using medical marijuana reasonably outweigh the potential health risks.”
- “‘Medical marijuana treatment center’ shall mean an entity that is registered with and licensed and regulated by the department and that processes medical marijuana, related supplies, and/or educational materials. A treatment center may engage in one or more of the activities involved in the processing of medical marijuana.”
- “‘Process’ shall mean to acquire, administer, compound, convert, cultivate, deliver, develop, disburse, dispense, distribute, grow, harvest, manufacture, package, possess, prepare, process, produce, propagate, research, sell, test, transport, or transfer medical marijuana or any related products such as foods, tinctures, aerosols, oils, or ointments.”
The proposed amendment would allow physicians licensed in Mississippi to prescribe medical marijuana to qualified patients following an in-person examination via a physician certification form, which will remain valid for 12 months, unless the physician prescribes a shorter period. The patient must then present this certification to the Department, and the Department “shall issue” the patient a medical marijuana identification card within a reasonable time. Patients may have to pay a fee of up to $50 to obtain an identification card. Like the physician certification form, these identification cards also expire within 12 months of issuance. Once the patient obtains the identification card, he or she can receive medical marijuana from a treatment center by presenting the card at the treatment center. A patient can only obtain 2.5 ounces of medical marijuana during any one 14-day period, and no patient can possess over 2.5 ounces of medical marijuana at any one time. The weight limitation does not include ingredients combined with the medical marijuana to prepare edible products, topical products, ointments, oils, tinctures, or other products.
The proposed amendment provides that the Department and treatment centers will protect the confidentiality of all patients, and all records containing the identity of patients, caregivers, and physicians “shall be confidential and exempt from disclosure under the Mississippi Public Records Act or any related statute, regulation, or rule pertaining to the public disclosure of records.”
Importantly for patients, the proposed amendment explicitly states that it does not require health insurance providers or governmental agencies or authorities to reimburse patients for the costs associated with medical marijuana.
Importantly for employers, the proposed amendment will not impact any existing drug testing laws, regulations, or rules.
The full text of the proposed amendment can be found here.
The actual amendment to the Mississippi Constitution that will become effective, should Ballot Initiative 65 pass, may differ from the content of this proposed amendment. Indeed, the proposed amendment contemplates that the Department will prepare reasonable final rules and regulations regarding the initiative no later than July 1, 2021, which will address issues such as:
- Tracking and labeling of medical marijuana;
- Qualifications for and safe and secure processing of medical marijuana by medical marijuana treatment centers;
- Restrictions on advertising and marketing;
- Issuance of medical marijuana identification cards;
- Standards for testing facilities;
- Use of medical marijuana in nursing homes, hospices, and assisted living facilities;
- Reciprocal agreements with other states for patients registered in medical marijuana programs;
- Qualifications of and limitations of caregivers and officers, owners, operators, employees, contractors, and agents of treatment centers;
- Implementation of a statewide database system to support the utilization of identification cards; and
- Penalties for violations of this article.
What Does This Mean for Medical Marijuana Growers, Distributors, and Retailers?
As is the case in every other state that permits medical marijuana at the state level, growers, distributors, and sellers of medical marijuana in Mississippi would have to be licensed. The proposed amendment does not specify the details of this licensing process, but instead anticipates that the Department will prepare no later than July 1, 2021, reasonable rules and regulations regarding qualifications for and safe and secure processing of medical marijuana by medical marijuana treatment centers.
The proposed amendment provides that each treatment center will be assessed a “reasonable fee” to operate, the rules and regulations will not limit the number of treatment centers nor set the price of medical marijuana, and the Department must issue licenses for treatment centers within a reasonable time following application for a license. The proposed amendment also states that contracts entered into under the new law and related to the operation of treatment centers will be enforceable and that Department of Revenue rules which apply to other similar businesses will apply to medical marijuana treatment centers, except that the processing and use of medical marijuana will be exempt from the application of state and/or local sales tax or other fee (except as discussed below in the section about potential state revenue). And, the proposed amendment contemplates that the Department will issue identification cards and treatment center licenses no later than August 15, 2021.
The proposed amendment provides that treatment centers cannot be located within 500 feet of a pre-existing school, church, or licensed child care center. However, the proposed amendment prohibits municipality or county zoning ordinances, regulations, and/or provisions from impairing the availability of and reasonable access to medical marijuana. It further states that any such zoning provisions regarding retail dispensaries can be no more restrictive than those for a licensed retail pharmacy, and zoning provisions regarding treatment centers can be no more restrictive than those applicable to comparably sized and staffed lawful commercial or industrial businesses.
The proposed amendment also exempts certain transactions that relate to activities associated with implementation and operation which do not exceed $250,000 from the Mississippi Department of Information Technology Services laws, rules, and regulations. This exemption will apply for two years from the effective date of the enacted amendment but will not apply to reporting requirements. This means, generally, that certain competitive bidding and other procedural and administrative requirements may not apply to qualifying transactions, such that the licensing of treatment centers and patients and implementation of the proposed amendment will be done in a timely fashion.
Every two years the Department will be required to provide the Mississippi Legislature with a comprehensive public report regarding the operation of the medical marijuana program.
A Source of Revenue?
The proposed amendment contemplates the creation of a special state treasury fund to house fees applied to the issuance of identification cards and the licensing of medical marijuana treatment centers. The proposed amendment also grants the Department authority to assess a sales tax on the final sale of medical marijuana that can equal Mississippi’s sales tax rate of 7%. This tax and the fees generated from issuance of identification cards and treatment center licenses will pay for the costs the Department incurs from implementing and enforcing the amendment, rules, and regulations. The Department will have authority to expend these funds without prior authorization or appropriation and will make expenditures from the special fund for costs or other services or programs associated with the new law. Further, the special fund balances will not become part of the state’s General Fund, and the Department will have authority to use special funds to escalate personnel positions in the Department as needed, as non-state-service, to administer and enforce the new law. Also, the state treasurer shall provide, upon request by the Department, a line of credit from the Working Cash Stabilization Fund or any other available special source funds maintained in the state treasury in an amount up to $2.5 million for deposit to this special fund to provide sufficient working cash to implement the provisions of the new law. Available funds that the Department has received will be used to repay any such loan.
The drafters of the proposed amendment used the medical marijuana program in Arizona as a basis for revenue projection in Mississippi and estimate that implementation of the proposed amendment will generate an annual special fund revenue of $6 million for Mississippi.
The proposed amendment’s likelihood of passage is uncertain at this point. Major stakeholders such as former Gov. Phil Bryant, some law enforcement leaders, and the Mississippi State Board of Health have publicly opposed Ballot Initiative 65, but some polling shows that approximately 77% of Mississippians support legalizing medical marijuana and Mississippi physicians issued a public release in favor of the initiative. And, because the proposed amendment is a ballot initiative, Mississippi voters will ultimately decide its passage.
This article first appeared on the Cannabis Business Executive on January 30, 2020.