Marijuana Dispensaries – Are They Essential Services?

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With the spread of COVID-19 fears, states and cities nationwide are in the process of issuing a variety of executive orders and other ordinances shutting down businesses that are considered “non-essential.”  However, what is considered “essential” differs by state and locality.  Across the board, these laws have included healthcare services as “essential.” The question many have is whether marijuana dispensaries will fall into this “essential” category.

New York:

At the time of publication, Governor Cuomo’s most recent executive order remained pending.  However, on March 18, 2020, he announced that non-essential services will be forced to reduce the number of employees reporting to work in person by 50 percent.  As part of his announcement, he stated that essential services included grocery stores, pharmacies, healthcare, and shipping.  At the same time, he voiced opposition to the shelter-in-place plan floated by Mayor de Blasio.

In advance of the passage of any such Orders, New York state health regulators issued guidance declaring licensed medical cannabis businesses to be “essential” services as medical providers.  This would allow such dispensaries to remain open if nonessential businesses are ordered to close because of COVID-19.  The guidance also strengthened safety and health protocols for Registered Organizations in the Medical Marijuana Program.  These include:

  • Allowing Registered Organizations to dispense goods from the doors of the facility provided that they maintain compliance with all current laws, rules and regulations including but not limited to dispensing on camera, checking the PMP as required and validating registry ID cards.
  • Permitting Registered Organizations (who have been approved to deliver medical marijuana products to the homes of registered patients and designated caregivers) to expand delivery services statewide without seeking the Department of Health’s prior written approval.  This directive is in place until April 16, 2020.
  • Issuing recommendations for delivery drivers, which include wearing masks and gloves, sanitizing or washing hands after each delivery, encouraging patients to use their own pens for signatures / sanitizing pens.  It also recommending instituting confirmation of receipt of delivery of medications through a phone call, text or email in lieu of getting a signature, although this confirmation should be documented and retrievable upon audit.
  • Encouraging businesses to have patients set up appointments in order to avoid overcrowding in dispensaries.
  • Encouraging businesses to institute a variety of COVID-19 planning practices for issues with ill staff, supply chain problems, and increased sanitation of facilities.

California:

As of 12:01am on Wednesday, March 18, 2020, thirteen California counties are now subject to shelter in place orders requiring all non-essential businesses to either operate remotely or close up shop for 2-3 weeks to help curb the spread of coronavirus.  The orders provided lists of essential services that could remain open, including grocery stores, pharmacies, gas stations, and medical facilities.  It left room, however, for interpretation for many other businesses, including the cannabis industry—which walks the line between medical and recreational markets, and generates hundreds of millions of dollars each year in state tax revenue.

Offering a slice of clarity, the City of San Francisco ruled on March 17th that its numerous dispensaries would be allowed to remain open under an “essential business” exception.  In doing so, the San Francisco Department of Public Health stated that cannabis is an essential medicine and that “[d]ispensaries can continue to operate as essential businesses during this time, while practicing social distancing and other public health recommendations.”

In addition to San Francisco, dispensaries in San Jose were also deemed by the city to be essential providers of healthcare needs and therefore exempt from the shelter in place orders, so long as the dispensaries comply with social distancing requirements.  Santa Cruz County is allowing cannabis dispensaries to continue operating via delivery or pickup only, with customers prohibited from gathering in shops.  Santa Clara County is allowing dispensaries to operate as essential businesses for medical purposes, but not recreational.  Alameda County dispensaries are reportedly still open for business despite the orders as well.

Other States Deeming Cannabis “Essential” During Business Closures

In addition to New York and California, several city and state health departments have stated that medical marijuana dispensaries are “essential” businesses, like pharmacies or grocery stores, and are allowed to remain open.  Specifically, Michigan, Illinois, Massachusetts, and Washington State all issued bulletins lessening the regulations on delivery and/or in-store transactions in efforts to limit contact between patients and vendors.

Michigan’s Marijuana Regulatory Agency will ultimately need to approve all delivery methods used by retailers, but in the interim, will temporarily permit delivery to customers and patients whose current addresses do not match their state-issued identifications.  They will also allow dispensaries to make curbside sales to their clientele.

The Illinois Department of Financial and Professional Regulation is still prohibiting delivery to patients, but will allow medical dispensaries to transact business “on the dispensary’s property or on a public walkway or curb adjacent to the dispensary.” Any recreational sales must still be made indoors, but the dispensaries must do so in “limited access areas” and comply with social distancing requirements.

Massachusetts’s Cannabis Control Commission recommended that medical dispensaries offering delivery services consider expanding service areas and to urge their patients to place larger orders to limit the amount of human contact.

Washington state’s Liquor and Cannabis Board announced that marijuana retailers are not required to close, so long as they designate an employee or officer to establish best practices in light of the virus.  The Board is also working to identify ways to help licensed businesses during this closure, specifically by tweaking regulations to allow for curbside delivery.

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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