First Look: West Virginia Medical Cannabis Act

On April 19, 2017, West Virginia Governor Jim Justice signed a bill making West Virginia the 29th State to legalize medical marijuana. The West Virginia Medical Cannabis Act (“the Act”) permits doctors to recommend medical marijuana to treat patients suffering from a variety of debilitating medical conditions and sets the parameters for medical cannabis organizations (growers, processors, and dispensaries) who will operate in the new market.

The Basics. The new law provides West Virginians with legal access to medical marijuana, but it does not legalize performing a task under the influence of marijuana in which doing so would be negligent or constitute malpractice. Patients may not operate a motor vehicle, aircraft, or boat while under the influence of medical marijuana. Furthermore, smoking marijuana in a public place or motor vehicle is prohibited.

Qualified Medical Conditions. Doctors can recommend medical marijuana for the treatment of a limited number of qualifying conditions. These include: any terminal illness or cancer, HIV/AIDS, ALS, Parkinson’s disease, multiple sclerosis, spinal cord damage, epilepsy, neuropathies, Huntington’s disease, Crohn’s disease, post-traumatic stress disorder, intractable seizures, sickle cell anemia, or “severe chronic or intractable pain in which conventional therapeutic intervention and opiate therapy is contraindicated or has proved ineffective as determined as part of continuing care.”

Medical Cannabis Organizations. Under the new law, patients and caregivers may not cultivate their own medical marijuana. They must obtain medical marijuana from regulated dispensaries. Dispensaries will maintain an inventory of medical marijuana products, which the dispensary must purchase from state-licensed medical marijuana processors. Processing of medical marijuana is necessary under the law because only certain forms of medical marijuana will be made available to patients. Processors in turn may only process medical cannabis purchased from state-licensed growers.  

Forms of Medical Cannabis. Under the law, the only forms of medical marijuana allowed initially are pills, oils, gels, creams, ointments, tinctures, liquid, and forms medically appropriate for administration through vaporization, excluding dry leaf or plant form marijuana.[1]

Fees. Grower and processor permit applications must include a $5,000 initial application fee and a $50,000 permit fee. Dispensary applicants must pay a $2,500 initial application fee and $10,000 permit fee for each proposed dispensary location. All permits are valid for one year. Permit fees will be refunded if an application is denied. Application fees, however, are nonrefundable.

Eligibility. Applicants (including an applicant’s financial backers, principals, and employees) for all medical cannabis permits must not have been convicted of any felony criminal offense related to the sale or possession of illegal drugs, narcotics, or controlled substances. Waivers are available for some dispensary positions, but shall be at the discretion of the Bureau of Health.

Number of Medical Cannabis Permits. The Bureau of Health may issue up to 10 grower permits, and each grower may have up to two locations per permit. The Bureau may issue up to 10 processors. For growers and processors, the Bureau may not issue more than one permit to one person. Furthermore, a grower and processor may not also operate as a dispensary. As for dispensary permits, the Bureau may issue up to 30 dispensary permits, with no more than five in any region. Importantly, the Bureau may not issue more than two dispensary permits to one person.

Facility Limitations. Medical cannabis organizations may only grow, store, harvest, process, and dispense medical cannabis in an indoor, enclosed, secure facility located within West Virginia. A dispensary may not be located within 1,000 feet of the property line of a public, private, or parochial school or daycare center.

Local Support. The Act contains several provisions that reinforce the need for strong local approval and support before considering filing a permit application. Before a permit may be issued, an applicant must provide the Bureau with written approval from the Board of Health for the county in which the permit is to be located. Furthermore, an applicant must provide a written statement from the county commission in which the permit is to be located that the County has not voted to disapprove a medical cannabis organization. Under the Act, a county can pass ordinances prohibiting the operation or location of a medical cannabis organization within that particular county.

Capitalization Requirements. While there is no quantified amount of financial capitalization required, the Act states an applicant must be able to demonstrate they have the financial fitness necessary to operate their facility. The applicant must also show they can obtain land, building, and equipment needed to grow, process, or dispense medical cannabis in an expeditious manner.

Clinical Registrants. Similar to Pennsylvania’s Medical Marijuana Program, the Act includes an alternative means of licensing for medical cannabis organizations seeking to partner with academic research centers. Under Article 14, the Bureau may register up to four “Clinical Registrants,” that must pay the fees and meet all other requirements under the Act for obtaining a permit as a grower, processor and dispensary.

Analysis. For those familiar with Pennsylvania Medical Marijuana Act, the West Virginia statute looks very familiar. Like Pennsylvania and New York, the West Virginia model does not give patients and caregivers access to cannabis flower (i.e., whole-plant or dry leaf marijuana). That said, the Act authorizes the Bureau to permit cannabis flower at a later date. If cannabis flower is approved, patients will still be prohibited from smoking medical cannabis, but may use vaporization to inhale medical cannabis’ active ingredients without the harmful side effects associated with smoking. In the coming months, the Bureau will draft temporary regulations to govern all aspects of West Virginia’s medical cannabis industry.

Resources. Eckert Seamans is a full-service law firm with 15 offices located throughout the Northeastern and Mid-Atlantic states. Members of Eckert Seamans’ Regulated Substances practice group have experience counseling medical cannabis businesses in all aspects of corporate formation, real estate, taxation, government relations, and preparing applications for medical marijuana cultivation and dispensary operations. For more information please contact Peter S. Murphy at pmurphy@eckertseamans.com or Daniel Clearfield at dclearfield@eckertseamans.com.

[1] The Act authorizes the Bureau of Health to amend the program rules to include dry leaf or plant forms of medical cannabis in the future.

The Regulated Substances Blog is intended to keep readers current on developments regarding medical cannabis legalization and regulation and is not intended to be legal advice.  If you have any questions, please contact the author Peter Murphy at pmurphy@eckertseamans.com.  You may also contact Daniel Clearfield at dclearfield@eckertseamans.com or any other member of our Regulated Substances Group.