Over the past few years, Maryland, Washington, D.C., and Virginia have made significant changes to their laws governing medical marijuana. As this fledgling new industry emerges, prospective growers, dispensaries, and processors of medical cannabis must navigate a constantly evolving thicket of licensing and business regulations. Similarly, zoning barriers and inconsistencies between state and federal criminal statutes will continue to complicate the prospects for new entry and business expansion opportunities. Moreover, physicians and other health care providers whose patients use medical marijuana need to understand the differences between the jurisdictions, and should take care to conform their practices to the unique set of laws in each.
Maryland has legalized marijuana for medical purposes under certain conditions. In 2013, the legislature created a state-regulated medical marijuana program, the Maryland Medical Cannabis Commission (the “Commission”). The Commission is responsible for overseeing and enforcing the state’s medical marijuana program and promulgating regulations. Since its inception, the Commission has developed the framework for certifying health care providers and implemented the program that licenses growers, processors, and dispensaries.
Under Maryland law, only “qualifying patients” may use medical marijuana. A “qualifying patient” is someone who lives in Maryland or is physically present in Maryland for the purpose of receiving medical care, has been provided with a written certification from a certifying physician, and has a chronic or debilitating disease or medical condition that causes one of the following conditions: cachexia or wasting syndrome, anorexia, severe pain, severe nausea, seizures, severe or persistent muscle spasms, glaucoma, post-traumatic stress disorder, and chronic pain. The Commission’s regulations permit a doctor to recommend marijuana for a patient if the doctor believes doing so would be in the patient’s best medical interest. Current medical marijuana legislation and regulations do not permit edible medical marijuana products, such as brownies, cookies, and gummies, although there has been some recent movement in that direction.
In order to recommend that a patient qualify to use medical marijuana, a physician must register with the Commission. To obtain a registration, the physician must have an active and unrestricted license to practice in Maryland, be in good standing with the Board of Physicians, and be registered by the state to prescribe controlled substances. Registrations must be renewed every two years. At present, there is no fee for a provider to register with the Commission.
Maryland also requires that a “bona fide physician-patient relationship” exists between the physician and the qualifying patient. In order to qualify as a “bona fide physician-patient relationship,” the physician must have ongoing responsibility for the assessment, care, and treatment of a patient’s medical condition. At a minimum, the physician must see the patient once per year. A registered physician can then issue a “written certification” to a patient who qualifies for medical marijuana usage. Physicians are required to submit a copy of each written certification to the Commission.
Dispensaries that are licensed by the Commission are permitted to distribute medical marijuana in a processed form or in the form of a dried flower. Dispensaries may also sell devices that administer marijuana and offer delivery services to patients. Dispensaries are required to keep on file for five years the name and address of each recipient of marijuana; the quantity delivered to each recipient; and the name, strength, batch number, and lot number delivered to each recipient. Dispensaries are also required to submit quarterly reports to the Commission, including the number of patients served, their counties of residence, their medical conditions, the type and amount of medical marijuana dispensed, and (where available) a summary of clinical outcomes, including adverse events and any cases of suspected diversion.
Finally, in response to the near total lack of supplier diversity that resulted from the Maryland Commission’s first round of issued licenses for growers and dispensaries in the emerging medical cannabis industry, recent regulations have placed increased emphasis upon efforts to enhance supplier diversity among the pool of license applicants. Such applicants will compete for a limited number of additional licenses to be issued by the Commission this year. The new regulations require the Commission to undertake an extensive list of outreach efforts to identify and encourage applications from minority and women business enterprises, and from ventures that include participation by diverse individuals. Moreover, the State has amended regulations that govern the Commission’s review and scoring of medical cannabis license applications to include evaluation criteria for the award of up to 15 points based upon an applicant’s diversity plan. Specifically, the regulations direct the Commission to evaluate prospective licensees for their various configurations for the inclusion of minority- and women-owned disadvantaged business enterprises, and diverse employees across various ethnic, gender, and geographic categories.
Similar to Maryland, the nation’s capital has legalized marijuana for medical purposes. Since 2013, Washington, D.C. has permitted the use of medical marijuana for qualifying patients with severe, debilitating, or life-threatening medical conditions as recommended by a health care provider who is licensed in D.C.
The laws governing health care providers who may recommend medical marijuana vary by provider type. For example, a physician may recommend marijuana to a patient only if the physician “has primary responsibility for the care and treatment of a qualifying patient,” and the physician has a D.C. medical or osteopathy license in good standing. Physicians that recommend medical marijuana are required to keep certain patient records (generally, a complete medical chart for three years), and must make their recommendations using a specific form promulgated by the D.C. Department of Health.
In addition to physicians, advanced practice registered nurses, dentists, physician assistants, and naturopathic physicians may recommend medical marijuana under certain circumstances.
In order to recommend marijuana to a patient, a health care provider may not have any affiliation with a dispensary, cultivation center, or testing laboratory. However, unlike Maryland, a health care provider need not obtain a special registration.
In Washington, D.C., a dispensary must register with the Department of Health, comply with various regulations, and tender a significant initial fee as well as annual renewal fees. Dispensaries may distribute medical marijuana to qualified patients “in any form deemed safe.” This regulation allows dispensaries to distribute edibles as well as inhalants.
Progress towards a Virginia medical marijuana market has moved at a slower pace as compared to Maryland and D.C. Under Virginia law, possession of marijuana for any purpose remains illegal; however, certain patients who are charged with possession of a particular marijuana extract have a legal defense from prosecution if they have a valid Affirmative Defense Certificate.
Under the program, certain patients may be eligible to obtain an Affirmative Defense Certificate authorizing them to use processed cannabis extract, known as cannabidiol (“CBD”) or THC-A oil. In order to issue the certificate, a physician must register with Virginia’s Board of Pharmacy using an online system and pay a $50 fee. To be eligible, the physician must hold a valid Virginia medical license, and be licensed with the Virginia Prescription Monitoring Program. Further, the Board of Pharmacy and the Board of Medicine are expected to issue a regulation capping the number of certificates that physicians may issue.
Dispensaries in Virginia are vertically integrated, meaning that every step of distribution (from growing the plant to distributing to patients) is performed by the same company, termed a “pharmaceutical processor.” Only five processors are licensed in the state, and they are scheduled to become operational in late 2019.
This article focuses only on medical marijuana, and not laws for non-medical possession, sale, and use, which vary across the three jurisdictions. Further, determining which state’s laws govern a particular transaction requires detailed legal analysis beyond the scope of this article.
Finally, readers should understand that marijuana remains illegal under federal law, and the U.S. Supreme Court has ruled that the federal government may still enforce the federal prohibition on marijuana, including in states that have legalized marijuana. This dynamic of conflicting federal and state laws will undoubtedly complicate industry provider efforts at obtaining financing and other services from financial institutions traditionally regulated by federal agencies. Similarly, there likely will be many courtroom and regulatory cases of first impression that will be addressed in the near term regarding the application of zoning laws, securities regulations, products liability, morals and indemnification clauses in leases, supplier contracts, and employment contracts in the medical cannabis industry. So, stay tuned to this space for further developments.
This information has been prepared by Tydings for informational purposes only and does not constitute legal advice.