Committee: JudiciarySponsor: Melson
Analyst: Pete GroganDate: 04/24/2019

FISCAL NOTE

Senate Bill 236 as introduced creates the 9-member Alabama Medical Cannabis Commission to implement and administer the provisions of this bill making medical grade cannabis available to qualified patients as follows: 1) establishing and administering a patient registry system for qualifying patients; 2) issuing medical cannabis cards to qualified patients; 3) approving health care providers to issue prescriptions for medical cannabis; 4) issuing licenses for the cultivation, processing, transportation, manufacturing, packaging, dispensing, and sale of medical cannabis; 5) inspecting licensed facilities; 6) procuring and using a secure seed-to-sale tracking system of all medical cannabis; 7) hiring appropriate staff to include a director, assistant director, chief inspection and enforcement officer (in consultation with Department of Agriculture and Industries), legal counsel, and other staff as appropriate; 8) contracting with the Board of Medical Examiners or other 3rd party to administer training to qualified health care providers; and 9) providing written annual reports tracking and implementing the provisions of this bill.

This bill authorizes: 1) the Commission to charge an application and renewal fee of $65 or other amount as determined by the Commission for medical cannabis cards and license fees for the cultivation, processing, transportation, manufacturing, packaging, dispensing of medical cannabis; 2) counties and municipalities to levy a 2.1% sales tax on the sale of medical cannabis; and 3) the levying of a 9% tax on the gross proceeds of medical cannabis when sold at retail in the state and a privilege tax of 10% on the net worth for the previous fiscal year on all persons except rural licensees.

This bill provides that all fees collected by the Commissioner, all state tax proceeds generated by the provisions of this bill, and any moneys appropriated by the Legislature for the initial operations of the Commission shall be deposited into the newly created Medical Cannabis Fund to be used to implement and administer the provisions of this bill. This bill further provides, that upon determination by the Legislature that the Commission has established sufficient revenues for the administration of the provisions of this bill, the Legislature shall direct the State Comptroller to transfer any excess balance in the Medical Cannabis Fund to the General Fund.

This bill will also increase receipts to the State General Fund and municipal general funds from fines; increase receipts to the State General Fund, county general funds, municipal general funds, and other funds to which court costs are deposited; and could increase the obligations of the State General Fund, local jails, community corrections programs, the district attorneys, the Department of Corrections, and the Board of Pardons and Paroles by an amount dependent upon the number of persons charged with and convicted of the offenses provided by this bill and the penalties imposed.

As substituted and reported by the Committee on Judiciary: 1) increases the membership of the Commission by 3 additional members; 2) provides requirements for qualified physicians to issue a physician certification for medical cannabis use by a qualified patient; 3) provides that a license for a stand-alone facility shall be a minimum of $10,000 and establishes a non-refundable application fee; 4) provides for the Commission to establish the fair market value or base price for the sale of medical cannabis products; 5) clarifies that the implementation and administration of this bill by the Commission shall be for medical grade cannabis grown in Alabama; and provides that everybody conducting business under the provisions of this bill shall be subject to the privilege tax of 10%, including rural licenses.


 Cam Ward, Chairperson
Judiciary