NC Medical Marijuana Bill Passes Senate Finance Committee

Fox Rothschild LLP

Fox Rothschild LLP

On Wednesday afternoon North Carolina Senate Bill 711, the Compassionate Care Act, was approved by the Senate Finance Committee completing another step in the Bill’s journey to legalize medical marijuana in North Carolina.  The version of SB 711 the Finance Committee approved is virtually the same bill the Judiciary Committee passed a couple weeks ago.

Of note, the Finance Committee hearing included clarification regarding the 10 suppler licenses set to be given out by the Medical Cannabis Production Commission under the Bill. The North Carolina Department of Health and Human Resources will select 20 supplier applications and from those the Commission will pick 10 to issue licenses to.  The 10 license limit, which received some criticism from commentators at the hearing for constricting supply and demand, was reportedly chosen to control roll out.  Under the framework each licensee is permitted to have 4 medical cannabis centers (i.e. dispensaries) for a potential total of 40 state-wide.

Each licensee must still have two medical cannabis centers in Tier 1 counties, which are the 40 most economically distressed counties as annually designated by the North Carolina Department of Commerce.  In addition, each licensee will still be required to operate as a vertical organization, with cultivation, manufacturing/production, and dispensary/retail under the same license, which must be owned by majority NC residents.

During the hearing a significant point of discussion was the revenue side of approval, and the importance of the potential patient population in mind for an accurate revenue assessment. There are currently not specific revenue projections for the proposed medical marijuana program because state-by-state legalization varies widely and there is no uniform best practice—leaving North Carolina Senators with no fiscal comparator for revenue extrapolation.

In the end Senators voted unanimously to pass the bill.  The bill now moves to the Committee on Health and Safety which will be a major step in whether it is ultimately passed.

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