Mississippi’s Medical Cannabis Program Officially Green-Lighted: What Now?

Gov. Tate Reeves signed the Mississippi Medical Cannabis Act into law yesterday, making Mississippi the 37^th state to adopt a medical marijuana program. The 445-page law is dense, and we previously summarized its highlights here. 

Now that what always seemed to be a pipe dream in Mississippi is a reality, you may ask what individuals and entities interested in entering this budding industry can be doing to best position themselves for success when applications can be submitted in June and July of 2022. Below we discuss some of the new law’s provisions that you should familiarize yourself with in these early stages.

1. Make Sure You Qualify for a License

• Individuals applying for a license to operate a cultivation facility, processing facility, dispensary, transportation entity, or disposal entity must:
  • Meet minimum age requirements;
  • Not have disqualifying criminal offenses;
  • Be in good standing with agencies with which the individual holds certain other licenses;
  • Prove ownership of the business;
  • Not have outstanding tax delinquencies owed to the State of Mississippi; and
  • Not be a sitting member of the Mississippi Senate or House or a spouse of such a member (disqualifying factor expires on 12/31/2022).

• Entities applying for a license to operate a cultivation facility, processing facility, dispensary, transportation entity, or disposal entity must:
  • Prove authority to act on behalf of the applying entity; and
  • Prove that the owners, board members, offices, and others with economic interest in the entity meet the criteria outlined above for individual applicants.

• Applicants for cultivation facility and processing facility licenses must also meet certain Mississippi residency requirements, depending on whether the applicant is an individual or entity.

• The act forbids any one individual or business entity of having more than 10% direct or indirect ownership or economic interest in:
  • More than one cultivation facility;
  • More than one processing facility; and
  • More than five dispensaries.

• Testing facilities cannot employ an individual also employed or who has ownership at any other medical cannabis establishment.

• Application and license fees vary depending on type of establishment and size of establishment and/or operations.

2. Is Your Business Location Compliant?

• The act sets forth zoning restrictions depending on the type of medical cannabis establishment.
  • Dispensaries, research facilities, and testing facilities may be located in commercial-use zones.
  • Cultivation and processing facilities may be located in agricultural or industrial-use zones.
    • May also be in commercial-use zones if a municipality or a county grants a variance that allows a cultivation or processing facility to operate in a commercial-use zone.

• Medical cannabis establishments cannot be located within a certain distance from a school, childcare facility, or church.

• A dispensary cannot be located within a certain distance from another dispensary.

• Local governments can, by May 3, 2022, opt out of allowing medical cannabis establishments to operate in their jurisdiction.
  • The act provides a method for the voters within the jurisdiction to override the opt out by special election.

3. What’s the Timeline for Implementation?

• By June 2, 2022, the Mississippi Department of Health (MDOH) should begin accepting applications from cultivation facility, processing facility, research facility, testing facility, disposal entity, and transportation entity applicants.
  • The MDOH should start issuing licenses 30 days after receiving the application or by July 2, 2022, whichever date is later.

• By July 2, 2022, the Mississippi Department of Revenue (MDOR) should begin accepting applications from dispensary applicants.
  • The MDOR should start issuing licenses 30 days after receiving the application or by August 2, 2022, whichever date is later.

These are some of the key, initial considerations for any individual or entity wanting to enter the medical cannabis industry in Mississippi. These considerations, though, are just the tip of the iceberg.  Like any other new business endeavor, you must also carefully deliberate about several other items.  Those include:

• Business formation steps, such as state registration requirements and corporate charter agreements or company operating agreements;
• Real estate purchases or leases;
• Taxation concerns;
• Insurance and risk management protections;
• Banking relationships and other funding options;
• Intellectual property needs and protections;
• Distribution and vendor arrangements;
• Regulatory compliance beyond what is set forth in the act; and
• Employment law considerations.

Bradley is a full-service law firm that not only has attorneys with experience advising clients on cannabis-specific issues, but also in all of the legal disciplines that relate to the above list of considerations. In the coming months, Bradley plans to publish issue-specific content on the different practice areas and issues any new business in this space must consider. Stay tuned for this additional content, along with other updates as the MDOH creates additional regulations to govern the Mississippi medical cannabis program.