Obtaining a license to transport medical cannabis in Alabama | Bradley Arant Boult Cummings LLP
Alabama became the 36e State to allow cannabis for medical use when Governor Kay Ivey enacted the Darren Wesley ‘Ato’ Hall Compassion Act on May 17, 2021. The law establishes a process by which applicants will compete for a limited number of licenses in the following categories: (1) cultivator; (2) processor; (3) dispensary; and (4) “integrated facility” (which can grow, process, transport and distribute medical cannabis under a single license), as well as an TBD number of licenses for secure carriers and testing laboratories. A 14-member Medical Cannabis Commission authorizes and regulates the medical cannabis program, with input from the Alabama Department of Agriculture and Industry on cultivation issues. The law requires the Commission and the Ministry to pass regulations authorizing license applications by September 1, 2022.
What is a transporter license?
“Secure transporter” licenses allow individuals to transport medical cannabis between licensed facilities within the state. Licenses allow a carrier “to store and transport cannabis and medical cannabis for a fee at the request of a license holder.”
How many carrier licenses will be issued?
Unlike dispensary, grower or processor licenses, the law does not set clear limits on the number of transporter licenses that will be issued.
What are the conditions for obtaining a transporter license?
Applicants for a cultivator license must pay a non-refundable application fee of $ 2,500. Each “owner, shareholder, director, [and] a candidate’s board member ”, as well as each“ person with an economic interest in a candidate ”, must undergo a“ national and national criminal background check ”. If an “owner, director, member of the board of directors or person holding a controlling interest” has been “convicted or released from incarceration for [any] felony ”or“ convicted of a controlled substance felony ”within the past 10 years, the applicant is not eligible for a license.
The law requires applicants to include a lot of information in their applications, including:
- The identity of all persons with “direct or indirect property interests” in the applicant.
- The identity of the entities involved in the cannabis industry and related to the applicant or of persons having an interest in the applicant.
- A complete criminal record of the owners, directors, board members and majority shareholders of the applicant.
- The expected or actual number of employees of the applicant.
- “Financial information” in the “manner and form” required by the Commission.
- Documents indicating “that a majority of the property is attributable to one or more individuals with proof of [Alabama] residence… for a continuous period of at least 15 years preceding the date of the application.
- Records indicating that “a controlling interest is attributable to one or more individuals … having cumulative business experience in commercial horticulture or agronomic production for a period of at least 15 years.”
By law, licensees must maintain “liability and damage insurance” coverage of at least $ 2 million, and the Commission can promulgate regulations that “establish minimum levels of other financial guarantees.” that licensees must maintain. If an applicant does not demonstrate the ability to meet these requirements, they cannot be licensed.
The law lists many criteria that the Commission can use to assess license applications, including:
- The “applicant’s ability to capitalize and conduct operations as proposed in their business plan, including business experience in related fields”.
- Several other criteria were aimed at the candidate’s financial support and business acumen.
- Any history of non-compliance with any regulatory requirement.
- That “the location proposed by the applicant[s] of all proposed medical cannabis facilities ”are“ suitable for all activities ”and“ are not inconsistent with applicable zoning ”.
- The “ability of the applicant to serve an identifiable geographic area”.
Before issuing a license, the Commission must open a 30-day period during which anyone can submit “written comments regarding the applicant”, and the Commission is required to consider all comments received. If an applicant is denied a license, he or she can request that the Commission “organize a public inquiry hearing at which the applicant has the opportunity to present testimony and evidence to establish their suitability for a license”. The Commission must provide such a hearing upon request.
Each applicant (for all types of license) must certify in his application that he “has no economic interest in other [Alabama medical cannabis] License. ”Licenses and interests in authorized entities may not be transferred without the approval of the Commission.
What does the law require from authorized carriers?
To comply with legal requirements, licensed carriers must:
- Certify that every employee handling medical cannabis has not been convicted or released from prison for a felony in the past five years, and has not been convicted of an offense involving controlled substances in the past five years ;
- Enter a route plan and manifesto into the statewide seed-for-sale tracking system and carry a copy in the transport vehicle;
- Transport medical cannabis in sealed containers that are inaccessible during transport; and
- Do not transport medical cannabis in a vehicle marked with or indicating that it is carrying medical cannabis.