MEMORANDUM DATE: November 19, 2014 TO: Senator Kohl-Welles FROM: Kathleen Buchli, Counsel SUBJECT: 2015 medical marijuana proposal You requested an outline that describes your 2015 proposal that addresses the differences between the recreational and medical marijuana markets. Your proposal intends to address both markets in a way that will simplify the process for the medical use of marijuana and will provide clear rules for law enforcement in addressing the two systems. The bullets below highlight areas that may be addressed in your proposal and may be incorporated into one or several bills, depending on subject matter. Home Growing. Currently, only medical users of marijuana are permitted to grow marijuana for their personal, medical use. These medical users are permitted to grow up to 15 plants or participate in a collective garden which may contain up to 45 plants. All users of marijuana, recreational or medical, may grow marijuana for their personal use. People who wish to grow marijuana must be 21 years of age or older and may only grow up to six plants. People who grow marijuana at home must do so in their own domicile and no more than one home grow is permitted per residence. People who grow marijuana may share up to one ounce of marijuana with another person who is 21 years of age or older. Sharing must be done without compensation; marijuana may not be sold nor may the grower accept cash donations for the product. Possession limits will be modified to reflect the larger amount of marijuana that may be produced by six plants. Eight ounces of marijuana would be permitted in the person's domicile where the plants are grown and the grower may not transport more than one ounce of marijuana. Hash oil may not be produced by anyone without a license. Collective gardens. Currently, collective gardens permit up to 10 qualifying patients to pool their resources and grow marijuana for the medical use of their members. Some patients have
modified their collective gardens to function as dispensaries with storefronts and which act as commercial enterprises. No agency regulates collective gardens and collective gardens are not required to be licensed. Current collective gardens will be phased out. People who operate collective gardens, have business licenses, and have been paying taxes to the Department of Revenue have until August 1, 2016 to become licensed with the Liquor Control Board (LCB). The LCB will, until August 1, 2016, accept applications from only those people who meet all these requirements. After August 1, 2016, other applications for retail licenses must be accepted by the LCB for review. o This provision effectively provides a "grandfather clause" for those dispensaries that are currently in operation. They have until August 1, 2016, to become licensed and must shut down if not licensed by that date. Applications during this time are limited to current dispensaries so as to provide them with an opportunity to become licensed and ensure patient access to marijuana during this transition period. o The date by which collective gardens must have business licenses and a history of paying taxes to the Department of Revenue is to be determined. Retail outlets. Currently, the number of marijuana retailer outlets is determined by the LCB. These outlets are authorized to sell marijuana and marijuana paraphernalia only. Employees are not required to be trained on the efficacy of marijuana or the medical use of marijuana; they are prohibited from discussing the medical use of the product. The restriction on the number of retail outlets is removed, allowing as many outlets as there are qualified applicants. Retailers are permitted to sell items other than marijuana and marijuana paraphernalia (such as t-shirts, topicals, and other products with a THC level of under.3 percent). All employees of marijuana retail outlets must take a class on the use of marijuana with a focus on the products that may be beneficial to people seeking marijuana for medical use. The class is to be developed by the Department of Health (DOH). Retailers may apply for a medical marijuana endorsement, which may be used by applicants who wish to focus on the medical side of the business. Between the effective date of the act and August 1, 2016, the LCB may accept applications from only those people who are able to establish they have been operating a dispensary as described above. DOH is to adopt rules on safe handling requirements for products intended for medical use. DOH is also to adopt rules on testing requirements for molds, pesticides and other contaminants. Medical specialty clinics. 2
DOH is to develop recommendations on establishing medical specialty clinics. These are clinics that would allow for the authorization and dispensing of marijuana to patients of health care professionals who work on-site and who are certified by DOH in the medical use of marijuana. Tax incentives. Currently, recreational marijuana is subject to taxation at each level of production. End users in both the recreational and medical markets must pay sales tax at point of sale. The excise tax currently paid by marijuana licensees is not deductible at the federal level, increasing their business. The three tiered taxation structure is consolidated to be the responsibility of the end user. This simplifies the structure for producers and processors of marijuana. Additionally, because medical users are likely the only consumers of products that are low in THC and high in CBD, a sales tax exemption is provided for these products. This allows medical users of marijuana to purchase products at recreational stores or medical marijuana endorsed stores at a lower cost. As part of consolidation, the excise tax will be renamed to allow for deduction of these expenses. Qualifying medical conditions. Currently, a person qualifies for the medical use of marijuana must have one of the following conditions: cancer, HIV, multiple sclerosis, epilepsy, intractable pain, glaucoma, Crohn's disease, hepatitis C, and wasting diseases. Post-traumatic stress disorder (PTSD) is added as a qualifying medical condition. Valid Documentation. Currently, in order to be a qualifying patient a person must possess valid documentation. Valid documentation is a health care professional's authorization that the patient has a qualifying medical condition and would benefit from the medical use of marijuana. Because the proposal allows all users of marijuana to grow on their own and provides a tax exemption for high CBD products, using valid documentation to identify patients is no longer necessary. However, valid documentation will have limited uses in order to identify qualifying patients seeking a waiver as described below. A patient registry would not be created in the bill and is not necessary because all people are able to grow on their own and possess up to eight ounces in their homes. Minor Use / Waivers from plant limits. Currently, no person under the age of 21 may be a recreational user of marijuana. A person under the age of 21 may use marijuana for medical purposes and a person 18 and older may grow marijuana for the medical use of a qualifying patient. A person between 18 and 21 years of age may use marijuana for medical purposes. In order to do so, he or she must obtain valid documentation from a health care professional and apply to the Department of Health (DOH) for a waiver. DOH will confirm that the 3
patient has a qualifying medical condition and issue a waiver that allows the patient to grow at home and to purchase marijuana from a retail outlet. A person under the age of 18 may use marijuana for medical purposes if his or her parent or guardian agrees to such use. Valid documentation, establishing that the minor has a qualifying medical condition, must be obtained and a waiver sought from DOH. The waiver may be used by the parent or guardian to grow marijuana plants for the minor or to purchase marijuana from a retail outlet for use by the minor. The minor may not purchase or grow for him or herself. A person who believes that his or her medical use requires more than the allowed six plants, may apply to DOH for a waiver from the plant limits if he or she possesses valid documentation and has a qualifying medical condition. A person with a qualifying medical condition and valid documentation and who is likely to benefit from the use of a product with a high THC level may apply to DOH for a waiver to be eligible to purchase these products at retail stores without paying tax at point of sale. 1000 foot buffer. Currently, marijuana licensees may not site their businesses within 1000 feet of any elementary or secondary school, playground, recreation center or facility, child care center, public park, public transit center, or library, or any game arcade admission to which is not restricted to persons aged twenty-one years or older. This language is based on the federal drug free school zone language but is more restrictive than the federal requirements. Align the buffer language with the less restrictive federal language. Reduce the buffer zone to 500 feet. Permit local governments to adopt ordinances that would increase the buffer zone to 1000 feet. Third party carrier license. Currently, it is unclear how producers and processors may transport their product to retailers. Retail delivery, while prominent in the medical market, is not authorized in statute. Establish a third party carrier license to allow this third party to transport products from producers and processors to retailers and to transport money earned in the marijuana market to banks. License delivery services to transport marijuana from retail outlets to consumers. State Cannabis Board. Establish a state cannabis board. 4
Research License. Establish a research license to permit genetic research and THC/CBD research. Advertising. Currently, advertising of marijuana is prohibited. Permit advertising for retail outlets, those outlets with medical endorsements may advertise themselves as medical outlet and may include a symbol such as a green cross in their advertisements. This symbol may also be used on the store front of the business. Processor to Processor Sales. Resolve existing issues that deter processor to processor sales. Local Governments. Based on court decisions and an Attorney General Opinion, local governments may ban the siting of marijuana licensees within their jurisdictions. Local governments that want to ban marijuana licensees within their jurisdictions must put the ban to a referendum of the voters in their jurisdictions. Only voter-approved bans may go into effect. Local governments that ban marijuana licensees within their jurisdictions may not participate in marijuana revenue sharing. Low THC products. Products that do not meet the definition of marijuana because they contain a THC level of.3 percent or less may be sold in retail outlets, but are not limited to sale only in retail outlets. 5