Committee: HealthSponsor: Melson
Analyst: Pete GroganDate: 04/15/2021


Senate Bill 46 as substituted and reported by the Committee on Health creates the 14-member Alabama Medical Cannabis Commission to implement and administer the provisions of this bill regulating medical cannabis for qualified patients as follows: (1) establish and administer a patient registry system for qualifying patients and caregivers; (2) adopt rules for the issuance of physician certifications for patients to use medical cannabis; (3) issue medical cannabis cards to qualified patients and caregivers; (4) license facilities that process, transport, test or dispense medical cannabis; (5) establish license fees ranging between $10,000 and $50,000 for an annual license and sets a non-refundable license application and transfer fee of $2,500; (6) inspect and audit licensees and assess fines for violations as appropriate; (7) establish a statewide seed-to-sale tracking system for all medical cannabis; (8) hire appropriate staff, not subject to the State Merit System Act, to include a director, assistant director, inspection officer, legal counsel, and other staff as appropriate; (9) license up to five integrated facilities, no more than twelve independent cultivators, no more than four independent processors, no more than four independent dispensaries, state-wide testing laboratories, and secure transporters; (10) provide that the Alabama Department of Environmental Management shall retain authority to administer and enforce existing laws pertaining to environmental management; and (11) provide annual reports tracking the implementation of this bill. Commission members would receive $500 per diem and, if approved by the chair, payment of actual travel expenses, as other state employees.

In addition, this bill requires the Department of Agriculture and Industries to: (1) license independent cultivators and coordinate with the Commission on licensing integrated facilities with regards to cultivation; (2) investigate applicants for licenses; (3) investigate employees of licensees; (4) establish an on-site inspection process pre-and post-license; (5) establish security protocols of facilities; (6) establish standards and protocols for waste product storage and disposal; (7) establish chain of custody standards; (8) enforce good manufacturing practices; and (9) establish standards and procedures for license renewal, suspension, and revocation. This will increase the obligations of the Department, by an undetermined amount to implement the provisions of this bill. However, this increase could be offset from license fees established by the Commission for independent and integrated facility cultivators, by an undetermined amount dependent upon the provisions of the memorandum of understanding established between the Commission and the Department.

This bill could increase the obligations of the State Board of Medical Examiners, by an undetermined amount, to comply with the provisions of this bill, which includes (1) issuing registration certificates and registration numbers to each certifying physician that meets the requirements of this bill, and (2) establishing requirements for a certifying physician to maintain certification, grounds for revoking registration, and a process for renewing registration. This increase could be offset, in whole or in part, by an undetermined amount, dependent upon the number of physicians seeking registration as a certifying physician and paying a $300 initial registration fee and an annual renewal fee not to exceed $200.

This bill also authorizes: (1) the Commission to charge an application fee of $65 for each medical cannabis card; (2) members of the Commission to receive a per diem of up to $500 per day, plus actual travel expenses incurred in performance of duties; (3) the levying of a 9% tax on the gross proceeds of medical cannabis when sold at retail in the state; (4) the levying of an annual privilege tax not to exceed $15,000 on any person doing business under the provisions of this bill; (5) the Commission to impose civil fines up to $5,000 against individuals and $25,000 or amount equal to daily gross receipts, whichever is greater against a licensee for violations of this act; and (6) the establishment of the Consortium for Medical Cannabis Research, consisting of Hudson Alpha Institute for Biotechnology, the Southern Research Institute, and public and private four-year colleges and universities within the state designated by the Alabama Commission on Higher Education not later than January 1, 2022 for the purpose of awarding research grants relating to medical cannabis from the Medical Cannabis Research Fund created by this bill.

This bill provides that all state tax proceeds, license fees, civil penalties and other fees or charges shall be deposited into the Medical Cannabis Commission Fund created by this bill and used to implement, administer and enforce the provisions of this bill. This bill further provides that beginning October 1, 2025, any funds in the Medical Cannabis Commission Fund in excess of actual expenses from the previous fiscal year shall be distributed, less 10%, as follows: (1) 60% to the State General Fund, and (2) 30% to the Medical Cannabis Research Fund.

This bill further provides that any moneys appropriated by the Legislature for the initial operation of the Commission shall be deposited into the Medical Cannabis Commission Fund.

In addition, this bill could 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, the district attorneys, the Department of Corrections, and the Bureau of Pardons and Paroles by an undetermined amount dependent upon the number of persons charged with and convicted of the offenses provided by this bill and the penalties imposed.

 Paul W. Lee, Chair