Obtained a license to test medical cannabis in Alabama | Bradley Arant Boult Cummings LLP

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Alabama became the 36th state to allow cannabis for medicinal purposes when Governor Kay Ivey signed the Darren Wesley ‘Ato’ Hall Compassion Act on May 17, 2021. The Act establishes a process by which applicants can compete for a limited number of licenses in the following categories: (1) cultivators; (2) processor; (3) pharmacy; and (4) “integrated facility” (which can grow, process, transport and dispose of medical cannabis under one license) and a number of licenses for safe carriers and testing laboratories to be determined. A 14-member Medical Cannabis Commission licenses and regulates the medical cannabis program, with the Alabama Department of Agriculture and Industries contributing to cultivation matters. The law requires the commission and department to issue ordinances by September 1, 2022 that allow license applications.

What is a State Testing Laboratory License?

Government testing laboratory licenses allow companies to “test cannabis and medical cannabis to ensure that the product meets the safety qualifications” required by the Alabama Medical Cannabis Act.

How many government testing laboratory licenses are issued?

In contrast to pharmacy, cultivation or processing licenses, the law does not set any clear limits for the number of test laboratory licenses issued.

What are the requirements for obtaining a state test laboratory license?

Breeder license applicants must pay a non-refundable registration fee of US $ 2,500. Every “owner, shareholder, director, [and] Board member ”of an applicant must undergo a“ state and national criminal record test ”along with every“ person who has an economic interest in an applicant ”. When an “owner, director, director, or controlling person” has been “found guilty or released” [any] Capital felony ”or“ convicted of an offense in connection with a controlled substance ”within the last 10 years, the applicant is not entitled to obtain a permit.

The law requires applicants to provide a wealth of information in their applications, including:

  • The identity of all persons with “direct or indirect ownership” of the applicant.
  • The identity of companies operating in the cannabis industry that are associated with the applicant, or any person who has an interest in the applicant.
  • A complete criminal history of the applicant’s owners, directors, directors and majority shareholders.
  • Estimated or actual number of employees of the applicant.
  • “Financial information” in the “nature and form” required by the Commission.
  • Records showing that “the majority of the property is attributable to one or more persons with evidence” [Alabama] Residence … for an uninterrupted period of at least 15 years prior to the application date. “
  • Records showing “that majority ownership is attributable to one or more persons … with accumulated business experience in the field of commercial horticulture or agricultural production for a period of at least 15 years.”

The law requires licensees to have at least $ 2 million in “liability and casualty insurance,” and the Commission can legislate that “set minimum levels of other financial guarantees” that licensees must maintain. If an applicant cannot demonstrate their ability to meet these requirements, they cannot obtain a license.

The law lists numerous criteria that the commission can use to evaluate license applications, including:

  • The “ability of the applicant to capitalize and carry out the business activities proposed in its business plan, including business experience in related areas”.
  • Several other criteria focused on the applicant’s financial support and business acumen.
  • Any history of non-compliance with regulatory requirements.
  • That the applicant’s “proposed location”[s] of all proposed medical cannabis facilities ”are“ suitable for all activities ”and“ not in conflict with the applicable zoning ”.
  • The “ability of the applicant to serve an identifiable geographic area”.

Before issuing a license, the Commission must introduce a 30-day period in which anyone can submit “written comments on the applicant” and the Commission must take into account any comments received. If an applicant is refused a license, it can request that the Commission “arrange for a public investigation to give the applicant the opportunity to provide testimony and evidence to determine whether or not they are eligible for a license”. The Commission must offer such a hearing upon request.

Every applicant (for all types of license) must certify in his application that he “has no economic interest in others” [Alabama medical cannabis] License. “Licenses and ownership interests in licensed entities cannot be transferred without the consent of the Commission.

What does the law require from a state test laboratory?

To meet the requirements of the law, an approved state testing laboratory must:

  • Performing tests to confirm that medical cannabis is reasonably free of heavy metals, chemical contamination, pesticide and growth inhibitor residues, and solvent residues;
  • Use validated test methods to determine cannabidiol levels;
  • Conducting tests to determine whether medical cannabis meets standards for microbial and mycotoxin levels;
  • Performing tests necessary to determine compliance with good manufacturing practice;
  • Have a secure laboratory that is not accessible to the public; and
  • Have an employee with an advanced degree in medicine or laboratory science.