CCC Releases Draft Regulations

The Cannabis Control Commission issued its draft use regulations for the adult-use market in late December and have asked for public comment by February 15 so that the regulations can be finalized and released to accept applications for licensure in early April.  As we have noted here before,  the CCC deserves credit for moving as quickly as they have and for keeping themselves on track to have dispensing of adult-use cannabis in July.  Although there are some concerning issues contained in the draft regulations, the regulations for the most part are thoughtful and will not require radical modification for the final product.

Some highlights and areas that should be subject to modification:

  • The application process mirrors the DPH medical licensing process with applicants required to submit three packets:  (i) an Application of Intent packet; (ii) a Background Check packet; and (iii) a Management and Operations Profile packet.  Applicants who have previously submitted information to DPH should not have to submit the same information again although these provisions in the draft regulations could be clearer.
  • Although not required by the statute, the regulations propose a social consumption license.  According to the draft regulations, smoking will be allowed in social consumption licensees after October 1, 2018.
  • The draft regulations provide for a delivery only license and provide a series of requirements for those who want to deliver.
  • In addition to those dispensing as of April 1, 2018 and economic empowerment applicants, the regulations also allow any entity that has a provisional certificate under the medical licensing regime to be eligible for priority review.  It was an open question under the statute whether those entities with provisional certificates should qualify for priority review and it appears that the CCC decided to include more applicants rather than less as achieving priority status.
  • Applicants will not have to have local permits at the time of licensure but will need to affirmatively state that their proposed location will be in compliance with local zoning as part of the application.  Likewise, applicants will need to host a hearing in their local town before submitting an application.  After an application is deemed complete, then the CCC will submit a request to the municipality where the licensee is located to certify that the licensee meets local zoning requirements.  A municipality will have 60 days to respond.  It is concerning that under the draft regulations, the CCC will only request certification from the municipality after an application is deemed complete.  This may needlessly delay licensure and potentially endanger dispensing in July.  The final regulations should require the CCC to solicit municipal certification as soon as an application is filed.
  • The CCC will review completed priority applications on an alternating basis between existing dispensaries/holders of provisional certificates and economic empowerment applicants.  We worry that this provision needlessly delays approval of applications.  As a policy choice, the CCC could decide to review completed applications in any way it sees fit, but adding this requirement to the draft regulations only inhibits the flexibility of the CCC.
  • The draft regulations require that there be a physical barrier between medical and adult use product within the sales area.  This needlessly hinders the medical industry and there is no need for physical separation.
  • The drafts regulations appropriately provide for suitability reviews of key persons associated with licensees.  However, certain mandatory disqualifications standards such as if there is an unresolved investigation in another jurisdiction for more than six months are too draconian.

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