The new year has kicked off with the long-awaited start of medical cannabis sales in Mississippi. The first legal sales of medical cannabis to qualifying patients have taken place. With licenses issued and medical cannabis cultivated and processed, the multi-million dollar question was when would qualifying patients have access to the cannabis product? The first-to-market cannabis licensees were previously in a holding pattern awaiting the final testing process to be completed. Now that medical cannabis product is available, all of Mississippi is watching as this new regulated industry takes shape.
Although it followed a tortuous path, the Mississippi Medical Cannabis Program is finally a reality. Mississippians voted to enact a medical cannabis program on November 3, 2020, with the passage of Initiative 65. The state’s ballot initiative process, and with it Initiative 65, was subsequently challenged and held unconstitutional by the Mississippi Supreme Court. After the Legislature’s approval of the Mississippi Medical Cannabis Act (SB 2095), the bill was signed into law by Governor Tate Reeves on February 2, 2022.
Although a clear majority of Mississippians were supportive of the legalization of marijuana in Mississippi for medical use and voted for Initiative 65, many still have lingering questions about how Mississippi’s medical cannabis program will work in practice and how it has been, and will be, regulated. This article will take a look at the regulatory program, current licensees, the qualifications and process for eligible patients to access medical cannabis, and what the future holds for medical cannabis in Mississippi.
The Regulatory Program
The Mississippi State Department of Health (MSDH) has primary regulatory authority over the medical cannabis program. MSDH is responsible for the licensing of medical cannabis cultivators, processors, testing facilities, transporters, and waste entities. Regular licenses will be renewed annually and licensees must demonstrate that they maintain compliance with the regulations. MSDH promulgated regulations for the Mississippi Medical Cannabis Program (MMCP) that address all aspects of the business.
From the beginning of the life cycle of medical cannabis with a cultivating entity to the end of the life cycle with a disposal entity, MSDH regulations make certain the medical cannabis industry is organized and monitored. MSDH’s regulations are detailed, and address, for example, the physical structures of medical cannabis establishments, the location and construction of the facilities, and the organizational requirements for recordkeeping and workflow. Examples of the level of detail include regulations of cultivation and processing facilities that discuss lighting, landscaping design, signage, and even video surveillance security systems. The MMCP utilizes the statewide seed-to-sale inventory management system Metrc that includes the use of sophisticated software and physical tags to track the product from its beginning stages of life to the point of delivery. That same regulatory technology system has been implemented in other jurisdictions like California, Louisiana, Missouri, and Oklahoma.
The employees of medical cannabis establishments are also subject to MSDH oversight. A medical cannabis establishment cannot employ anyone without a work permit issued by MSDH, which must be renewed every 5 years. An individual seeking employment must be 21, have no disqualifying felony offense, and complete a background check. Regulations outline additional training requirements and continuing education requirements for employees based on the scope of their employment. The medical cannabis establishments will be held to professional standards mandated by regulations such as the prohibition of consumption of cannabis and/or cannabis products on licensed premises or by employees during working hours.
The MSDH recently published proposed regulatory changes whose public comment period closed December 23, 2022. These additions and revisions included requiring a processing entity applicant to disclose the ownership structure of a legal entity with an ownership in the applicant. Proposed revisions to advertising and marketing included delineating that displaying pictures or images of cannabis and/or cannabis products on websites and social media is not a permissible branding activity. These are likely not the last of the regulatory changes the program will undergo.
Facility Licensees: Who Are They and What Are the Requirements?
A license is required for each developmental cycle in the medical cannabis business in a cradle-to-grave style regulatory approach, which includes separate licenses for cultivators, processors, transporters, disposal, and testing. There is a three-year residency requirement for an individual to apply for a facility license and an entity seeking a license is required to have at least 35% of the entity’s equity ownership held by a three-year Mississippi resident. That means that all of the currently licensed facilities will be at least partially owned by Mississippians. A listing of establishments licensed by the MMCP is available on MSDH’s website, and currently includes (31) cultivation facilities, (9) processing facilities, (7) transportation entities, (3) disposal entities, (35) micro-cultivation facilities, and (3) testing facilities. Several entities are vertically integrated (holding licenses in several different categories), while others are licensed in single areas.
Dispensaries
Because the dispensaries will be primarily responsible for the sale of medical cannabis to qualifying patients (and the collection of the taxes on that product), the Mississippi Department of Revenue (DOR) is responsible for the licensing of medical cannabis dispensaries. DOR maintains a public registry of medical cannabis dispensaries available on its website. There are currently 157 registered medical cannabis dispensaries from 32 counties spanning the coastal counties of Hancock, Harrison, and Jackson to the northern counties of DeSoto, Alcorn, and Tunica. Hinds, Harrison, and Lee counties currently have the most licensed dispensaries with 18, 16, and 12 respectively. Counties with a registered medical cannabis dispensary also include Adams, Bolivar, Forrest, Grenada, Lincoln, Lafayette, Lamar, Lincoln, Lowndes, Oktibbeha, Panola, Pike, Prentiss, Rankin, Tate, Walthall, Warren, Washington, Sunflower, Itawamba, and Yazoo.
How Will Patients Get Medical Cannabis?
For patients interested in the MMCP, the statute limits medical cannabis to 20 qualifying medical conditions including cancer, Parkinson’s disease, Huntington’s disease, muscular dystrophy, glaucoma, spastic quadriplegia, positive status for human immunodeficiency virus (HIV), acquired immune deficiency syndrome (AIDS), hepatitis, amyotrophic lateral sclerosis (ALS), Crohn’s disease, ulcerative colitis, sickle-cell anemia, Alzheimer’s disease, agitation of dementia, post-traumatic stress disorder (PTSD), autism, pain refractory to appropriate opioid management, diabetic/peripheral neuropathy, and spinal cord disease or severe injury. Patients could also qualify if they have a chronic terminal or debilitating disease or medical condition or its treatment that produces one or more of: cachexia or wasting syndrome, chronic pain, severe or intractable nausea, seizures, severe and persistent muscle spasms including, but not limited to, those characteristic of multiple sclerosis.
To qualify for the MMCP, a patient must have at least one qualifying medical condition and a written certification for medical cannabis use issued by a healthcare practitioner with whom they have a bona fide relationship. Mississippi-licensed physicians, certified nurse practitioners, physician assistants, and optometrists may sign written certifications for medical cannabis to treat conditions within their scope of practice, subject to additional conditions. Once signed, the healthcare practitioner registers the patient’s certification with the MMCP. Within 60 days of certification, the patient completes an application through the MSDH to participate in the MMCP. If the application is approved, the patient receives an electronic identification card that they will use to purchase medical cannabis from a licensed dispensary. A listing of patients enrolled in the program will not be made public; nor will a listing of participating medical providers. The MSDH website and Mississippi Cannabis Patients Alliance website provide helpful guides, diagrams, and videos to assist potentially qualified patients.
What Will the Future of Medical Cannabis in Mississippi Look Like?
The Mississippi medical cannabis industry appears to be brimming with capital, proven track records, and experienced professionals serious about promoting meaningful healthcare in Mississippi. The Mississippi cannabis program is currently a medical program—not a recreational one—so it should come as no surprise that the major cultivators and players in the industry more closely resemble those in the pharmaceutical industry. The new industry is also subject to a robust regulatory framework that will continue to evolve. A far cry from simply hanging a shingle or planting seeds in the backyard, participation in the Mississippi medical cannabis program requires significant investments of time and capital to ensure compliance with the strict regulatory framework. These same professionals and licensees are also committed to the safe and regulated production and use of these cannabis products.
As with any regulated industry, especially a new one, there will be tensions between the regulators and regulated entities. From an initial review of the regulatory framework, navigating the regulations for advertising and marketing could pose unique challenges for medical cannabis establishments. Generally speaking, the MMCP advertising and marketing regulations, as currently written, prohibit advertising or marketing by a Medical Cannabis Establishment; however limited “branding” activities are permissible. Businesses may find the current regulatory framework difficult to navigate given the “gray” areas in the framework and the legitimate need for “branding.” While the current set of regulations appear to unnecessarily restrict legitimate “branding” activities important to any business, we expect these tensions will be resolved over time, as the industry matures and the regulatory authorities gain comfort.
The cannabis industry has the potential to positively impact Mississippi business development beyond what one might expect. Mockingbird Cannabis, for example, has partnered with a number of food service entities for the potential development of edible cannabis products. This is just one example of the business venture opportunities available from a “budding” industry—pun intended. With the medical cannabis industry, ancillary businesses are likely to develop and expand as the program and its applicable regulations evolve.
