On Thursday, the Alabama Medical Cannabis Commission (AMCC) met in Montgomery to award licenses to 24 entities for the fledgling Alabama medical cannabis industry. These 24 were chosen from a pool of 90 applications accepted by the Commission.
The AMCC had previously awarded 23 medical cannabis licenses in June. Errors were later discovered in how the scores were tabulated, so the licensing process was suspended pending an outside review of the AMCC’s processes, and those license awards were stayed. Confident that those problems are behind them, the AMCC awarded the licenses on Thursday.
Rex Vaughn is the Chairman of the Commission.
“Since the Commission’s inception, we have worked to develop a fair, honest, and equitable process to select licensees,” explained Chairman Vaughn. “It is regrettable that the tabulation errors occurred. However, we have acknowledged the miscalculations and have taken the necessary steps to ensure that the data provided to the Commission was accurate. We are sincerely appreciative of the Court for allowing us to take corrective actions.”
Dr. Sam Blakemore is the Vice Chairman of the AMCC and a pharmacist.
“Formulating the application process, assessing all 90 applications, and making determinations on who to award licenses to has been a monumental task,” explained Vice Chairman Blakemore. “We received numerous applications from applicants who would make terrific licensees, which made the selection process extremely competitive. I have spent countless hours reviewing the applications myself and feel confident that we have selected a great slate of licensees.”
The Commission awarded licenses for marijuana growers, processors, transporters, dispensaries, and integrated facilities. An integrated facility does everything under one entity. There were also licenses awarded for cannabis laboratories. The most sought-after license was the one for integrated facilities.
The University of South Alabama (USA) was engaged by AMCC to coordinate the application review process and recruit evaluators to assess the scored exhibit items for all 90 applicants. USA utilized 66 evaluators with experience relevant to the application content to review one of eight scoring categories: (1) Financial Ability; (2) Business/Management Approach; (3) Operations Plans & Procedures; (4) Facility Suitability & Infrastructure; (5) Security Plan; (6) Personnel; (7) Quality Control & Testing; or (8) Marketing & Advertising.
Chey Garrigan is the founder and executive director of the Alabama Cannabis Industry Association (ALCIA) – an affiliate of the National Cannabis Industry Association (NCIA).
“The Alabama Cannabis Industry Association congratulates the ones who were awarded Alabama’s first historical medical cannabis licenses,” Garrigan said in a statement. “This is only the beginning.”
‘Now, it’s time to get to work and provide products for patients with a qualifying illness,” Garrigan said. “Patient count will be the deciding factor to a licensee’s success or failure.”
The Alabama Medical Cannabis Industry Coalition, which represents several of the entities that were awarded licenses, also responded to Thursday’s AMCC licensure awards.
“We applaud the efforts of the commission today,” the Cannabis Coalition said in a written statement. “The additional review by the independent auditors KPMG, along with procedural changes by the board, delivered what should be a respected decision. There will, of course, be those who are disappointed because they didn’t win. Everyone knew there would be losers because there were more applicants than there were licenses. And, of course, there will be litigation because, among those who lost, there are deep pockets.”
There is a strong likelihood that applicants denied by the AMCC on Thursday will seek relief from the courts. There have already been several lawsuits during the application process.
“We need to bring closure to this portion of the process and move towards verifying the ability of the awardees to deliver on what they have promised,” the Cannabis Coalition added. “In this next stage, the new licensees must show their ability to deliver on their commitments. We need to see this next step completed so that we can determine if there will be new vacancies among the segments to which other applicants could fill the void.”
Both the ACIA and the Cannabis Coalition felt additional legislation is needed.
“On the federal level, we support the Safe Banking Act,” Garrigan said. “We (ALCIA) are one of very few Southern Cannabis Associations included in the petitions that influence both our U.S. Senators to openly support safe banking.”
Under current federal law, banks may not be involved in the cannabis industry as marijuana remains illegal. This means that business-to-business transactions and consumer-to-business transactions are normally done with large amounts of cash rather than credit cards or checks. U.S. Senator Tommy Tuberville (R-Alabama) has advocated for the passage of the Safe Banking Act to allow these businesses to access the banking system.
The Alabama Legislature passed, and Governor Kay Ivey (R) signed legislation making medical cannabis legal in the state of Alabama in 2021. That legislation established the AMCC and authorized it to regulate the establishment of a medical cannabis industry in Alabama.
Medical cannabis will be tightly regulated in Alabama. All of the cannabis will be grown and processed in Alabama. The state will not export or import products to other states into Alabama. Dispensaries in the state will not honor medical cannabis cards from other states. THC limits are tightly controlled by the original legislation, except where the patient is terminal. No smokable product will be sold, and no raw plant product will be sold. “Home-grow” of marijuana plants for personal use will remain illegal in Alabama.
Garrigan said that the Legislative session will begin early next year to consider adjustments to the original legislation.
“We have begun to draft bills and secure sponsors in the Legislature,” Garrigan said.
“The legislature will return in 2024,” the Cannabis Coalition said. “They have the ability to expand licenses if they feel the process wasn’t perfect or there are additional needs.”
Only doctors who have gone through special training will be allowed to issue marijuana recommendations, and only patients with one of the listed qualifying conditions may receive a recommendation for cannabis from their doctor.
The AMCC said that Under the rules promulgated by the Alabama Board of Medical Examiners, physicians may begin the certification process to recommend medical cannabis to patients after business licenses have been issued. For a patient to qualify for medical cannabis, the patient must have at least one of the qualifying conditions and be recommended for medical cannabis by a certified physician.
No insurance, including Medicare, Medicaid, and Veterans benefits, will pay for any of the costs of marijuana, so all the costs will have to be paid for by the patients upfront out of pocket. The AMCC will collect a 9% tax on all medical cannabis sold.
It is expected that medical cannabis will not be available for purchase until early 2024 – at the earliest.
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