Cannabis Companies Deemed ‘Essential’ Businesses In Some States, But Not All

Fox Rothschild LLP

Like all businesses navigating the current COVID-19 crisis, cannabis companies are eager to understand how state and local orders will impact their operations. As states issue orders requiring all but essential businesses to close, a key question is whether cannabis businesses can continue to operate.

Some states have explicitly included cannabis companies as essential businesses, while others have not given explicit guidance.

The following is a list of states that have issued guidance as of the date of this alert. The rules are evolving and likely to remain in flux, so the information is expected to change as states further develop their policies. We will update this resource as needed.

Arkansas

Licensed cannabis businesses can remain open.

The Governor has closed all dine-in restaurants and bars, but has allowed them to remain open only for deliveries and takeout. There is no such order for cannabis stores at this time, but social distancing policies are highly recommended.

Arizona

Licensed cannabis businesses can remain open.

Arizona’s Department of Health issued guidance on March 17, 2020, indicating cannabis stores may remain open, but highly recommended social distancing policies for customers and employees.

California

Licensed cannabis businesses can remain open.

On March 19, 2020, following imposition of similar shelter-in-place orders in a number of California counties, Governor Gavin Newsom issued Executive Order No. 33-20, requiring residents to stay at home other than as needed for certain essential needs. Although the state order does not reference cannabis businesses, guidance posted on the state website indicates that licensed cannabis retailers may remain open. In addition, on March 21, 2020, the California Department of Food and Agriculture sent an e-mail out to its licensees indicating that cultivation is an essential business across the state. Los Angeles, San Francisco and Sacramento had previously indicated that cultivation operations could remain open. Social-distancing and other requirements are in place with respect to dispensaries, and certain areas, including Sacramento and Los Angeles, are allowing curbside pickup and home delivery.

Colorado

Licensed cannabis businesses can remain open.

On March 16, 2020, the Colorado Department of Public Health and Environment issued a public health order to close bars, restaurants, gyms, theaters, and casinos. Cannabis businesses were not included in that order and are allowed to remain open at this time. The Department of Revenue has also issued additional guidance and new emergency regulations to allow phone and online purchases as well as curbside pickup.

Connecticut

Licensed medical cannabis dispensaries can remain open.

On Friday, March 19, Connecticut Governor Ned Lamont ordered “non-essential” businesses to closed and urged residents to remain in their homes. That announcement noted that pharmacies are considered essential businesses. The state’s Department of Consumer Protection later clarified that medical marijuana dispensaries will be treated like pharmacies, and therefore remain open.

Florida

It is unclear whether licensed cannabis businesses can remain open in Miami-Dade and Broward counties.

On March 20, 2020, Governor Rick DeSantis issued three executive orders, including Order No. 20-71 ordering all non-essential businesses closed in Broward and Miami-Dade counties, mirroring the directives previously put in place at the local level. The order allows pharmacies to remain open, but does not reference medical cannabis and it is not yet known how the order will be interpreted.

Illinois

Licensed cannabis businesses can remain open.

On March 20, 2020, Governor Pritzker issued COVID-19 Executive Order No. 8, pursuant to which all individuals currently living within the State of Illinois were ordered to stay at home or at their place of residence until at least April 7, 2020, other than for Essential Activities, Essential Governmental Functions or to operate Essential Businesses and Operations, in each case as defined in the Executive Order. Any businesses and operations not qualifying as Essential Businesses and Operations are required to cease, and all Essential Businesses and Operations are required to comply with social distancing requirements to the greatest extent feasible. Licensed medical and adult use cannabis dispensaries and licensed cannabis cultivation centers are specifically included in the definition of Essential Businesses and Operations.

Louisiana

Licensed cannabis businesses can remain open.       

On March 16, 2020, Governor John Bel Edwards closed all casinos, bars, and movie theaters and limited restaurants to delivery, take out and drive-through orders only. Cannabis businesses are not required to close. Additionally, the Louisiana Board of Pharmacy relaxed its regulations to allow dispensaries to deliver patients their medication.

Maryland

Cannabis dispensaries can remain open.

On March 16, 2020, the Maryland Medical Cannabis Commission issued Bulletin 2020-006. The order temporarily changes certain rules related to dispensary operations, including prohibiting activities such as using sniff jars and deli-style sales, and allows inspectors increased latitude to suspend a company’s operations if they determine there is a public health issue. Among other requirements, dispensaries must follow social distancing guidelines and frequently clean and disinfect surfaces.

Massachusetts

Licensed cannabis dispensaries can remain open.

Although Massachusetts is currently under a “State of Emergency” ordered by Governor Charlie Baker on March 10, medical and adult-use dispensaries are currently able to remain open. Since that time, the Cannabis Control Commissions has released three “Bulletins” to licensees in the state, on March 13, March 18, and March 20. The March 13 and March 18 Bulletins encouraged licensees to implement procedures designed to protect the health and safety of employees and customers/patients. The March 20 Bulletin announced a procedure through which Certifying Health Care Providers could seek a waiver from the Commission allowing them to utilize “telehealth” to certify patients, whereas current law requires a physical visit by the prospective patient.

Michigan

Licensed cannabis dispensaries can remain open.

To date, there has not been any announcement from the State of Michigan ordering the widespread closure of businesses. However, on March 16, the state’s Marijuana Regulatory Agency released an “Advisory Bulletin” which authorized licensed medical and adult use dispensaries to begin making home deliveries and allowing customers to utilize “curbside pickup” as opposed to entering the dispensary.

Minnesota

Licensed cannabis businesses can remain open.

On March 17, 2020, Governor Tim Walz ordered the closing of all restaurants, bars, cigar and hookah bars, theaters, museums, country clubs, amusement parks, and gyms. Cannabis businesses are not required to close at this time. Social distancing policies are strongly recommended.

Montana

Licensed cannabis businesses can remain open.

On March 20, 2020, Governor Steve Bullock closed all dine-in food service businesses, alcoholic beverage businesses, cigar bars, gyms and health clubs, theaters and casinos. Cannabis business were not specifically listed and the Department of Public Health has not issued any further guidance the time of writing.

Nevada

Licensed cannabis business can remain open.

On March 18, 2020, Governor Steve Sisolak announced that all non-essential businesses should shut down and listed cannabis businesses as essential businesses. On March 20, 2020, Nevada issued emergency regulations. Pursuant to those regulations, licensed cannabis entities, including dispensaries, producers, and cultivators are considered essential businesses. Licensed cannabis dispensaries must ensure sales to consumers are by direct delivery only. Licensed cannabis producers and cultivators are required to strictly adhere to social distancing protocol.

New Mexico

Licensed cannabis businesses can remain open.

On Wednesday, March 18, 2020, Governor Michelle Lujan Grisham issued an order closing in-person dining options for restaurants and bars and closing theaters, indoor malls, gyms, and resort spas. Cannabis businesses are not required to close.

New Jersey

Licensed cannabis dispensaries can remain open.

On March 21, New Jersey Gov. Phil Murphy issued Executive Order 107 that goes into effect at 9 pm on March 21. EO 107, among other things, mandates the closure of all non-essential businesses. Medical marijuana dispensaries, however, are specifically mentioned in the list of entities deemed to be “essential retail businesses” and permitted to remain open. It is worth noting that EO 107 further requires that when in public individuals must practice social distancing and stay at least six feet apart whenever practicable. As such, the social distancing requirements should be implemented by the medical marijuana dispensary.

New York

Licensed cannabis dispensaries can remain open.

On March 20, 2020, Governor Andrew Cuomo issued the “New York state on PAUSE” executive order, ordering all “non-essential businesses closed” effective at 8 p.m. Sunday March, 22. Although the order did not state whether cannabis businesses would be considered essential, a spokesperson for the governor previously told National Public Radio that organizations registered under New York’s Medical Marijuana Program “are essential medical providers and will be allowed to remain open.” All retail businesses remaining open must adhere to social distancing guidelines.

North Dakota

Licensed cannabis businesses can remain open.

Governor Doug Burgun signed an order on March 19, 2020, closing bars, restaurants, gyms, and movie theaters. Cannabis businesses are not required to close at this time, but social distancing policies for customers and employees are highly recommended.

Oklahoma

Licensed cannabis businesses can remain open.

Governor Kevin Stitt issued an executive order urging people to follow CDC guidelines, to avoid gatherings of more than 10 people, avoid discretionary travel, avoid eating and drinking at bars and restaurants, rather, use drive-thru, pickup, or delivery options. There are no orders for cannabis business to close at this time.

Oregon

Licensed cannabis businesses can remain open.

Governor Kate Brown issued an order on March 16, 2020, that allowed cannabis businesses to remain open if they physically distance customers, or use takeout and delivery services.

Pennsylvania

Licensed cannabis business can remain open.

On March 17, Pennsylvania Governor Tom Wolf ordered the closure of certain businesses deemed non-essential as part of each state’s COVID-19 mitigation efforts. The initial announcement indicated that pharmacies and other healthcare facilities were deemed “essential.” The Pennsylvania Department of Health later clarified in a statement that medical marijuana dispensaries fall into the same classification as pharmacies, and can remain open as essential businesses.

Washington

Licensed cannabis businesses can remain open.

The Washington Liquor and Cannabis Board issued an order on March 16, 2020, allowing cannabis businesses to remain open but requiring they practice social distancing and not allow customers or employees within six feet of each other. The Board also amended its regulations to allow for medical cannabis stores to deliver patients their medications through curb-side pickup. The patients must have a valid medical recommendation. Curb-side pickup is still unavailable for recreational stores.

Utah

Licensed cannabis businesses can remain open.

On March 17, 2020, Governor Gary Herbert ordered statewide restrictions to close dine-in options at restaurants and bars. Cannabis businesses are not required to close at this time, but social distancing policies for customers and employees are highly recommended.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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