State Recreational Marijuana Regulators Modify Licensee Operations During COVID-19 | Practical Law

State Recreational Marijuana Regulators Modify Licensee Operations During COVID-19 | Practical Law

US state governments have issued executive orders in response to the COVID-19 health emergency that may cause disruptions to the operations of marijuana businesses. This Legal Update contains brief summaries of COVID-19-related guidance issued to marijuana licensees and patients in states where adult use recreational marijuana sales are legal.

State Recreational Marijuana Regulators Modify Licensee Operations During COVID-19

Practical Law Legal Update w-024-8020 (Approx. 8 pages)

State Recreational Marijuana Regulators Modify Licensee Operations During COVID-19

by Practical Law Commercial Transactions
Published on 13 Apr 2020 • ExpandAlaska, California, Colorado...District of Columbia, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, USA (National/Federal), Vermont, Washington
US state governments have issued executive orders in response to the COVID-19 health emergency that may cause disruptions to the operations of marijuana businesses. This Legal Update contains brief summaries of COVID-19-related guidance issued to marijuana licensees and patients in states where adult use recreational marijuana sales are legal.
All state government have issued emergency orders in response to 2019 novel coronavirus disease (COVID-19) health emergency. Both general and industry-specific emergency orders and regulations apply to all businesses on the marijuana supply chain. At least one state temporarily closed recreational marijuana businesses as part of a larger closure of non-essential operations, though all states that allow medical marijuana are allowing those businesses to continue operating. In addition to state action, local governments are also taking measures that may impact marijuana businesses.

Emergency State Actions Relevant to the Marijuana Industry

In all states where medical marijuana is legal, medical marijuana dispensaries are either specifically listed by emergency order or agency guidance as essential or otherwise permitted to operate. In every state but Massachusetts, sales of recreational marijuana to the public continues (see Massachusetts). However, all marijuana businesses are subject to both industry-specific and general emergency public health rules.
Representative industry-specific measures for customer-facing marijuana businesses include:
  • Allowing curbside pickup or other loosening of requirements that retail transactions take place in a single secure area.
  • Relaxing rules on delivery of marijuana and marijuana products.
  • Expanding use of telehealth by medical marijuana prescribers.
In addition to state-level executive and agency actions, local governments have also implemented emergency ordinances that may change marijuana business operations.
The following are brief summaries of COVID-19-related emergency rules and related guidance for licensees in states where adult use recreational marijuana is legal:

Alaska

The state Department of Health and Social Services (DHSS) maintains authority to determine whether to allow businesses to continue operating. According to a COVID-19 health mandate issued by the governor and DHSS, all businesses can continue operations if they limit the number of individuals in a building at one time to ten and adhere to strict social distancing requirements.

California

The State Public Health Officer designated recreational and medical cannabis retailers as Essential Critical Infrastructure Workers. On March 21, 2020, the state Bureau of Cannabis Control (BCC) confirmed in a press release that licensees may continue operations. California permits telemedicine consultations for medical patients for both initial appointments and card renewals.
For more regulatory changes in reaction to COVID-19, see BCC: COVID-19 Updates and Regulatory Relief.

Colorado

Colorado's governor issued an executive order suspending certain regulatory statutes until April 18, 2020 due to the presence of COVID-19. As a result of this order:
  • Prospective medical marijuana patients are no longer required to undergo a personal physical examination to receive a medical marijuana card.
  • Medical marijuana patients may receive telemedicine consultations for card renewals during COVID-19.
  • Online sales of retail marijuana and marijuana products are permitted.
On April 2, 2020, Colorado's Marijuana Enforcement Division issued emergency rules governing marijuana business operations. These rules temporarily:
  • Extend deadlines for some license renewals.
  • Loosen rules on employee licensing.
  • Authorize:
    • curbside pickup for medical and recreational retail marijuana stores;
    • acceptance of payment over the phone or Internet.
  • Provide guidance on social distancing and other public health measures as they apply to all marijuana licensees.
At least one licensed social consumption establishment has been ordered to temporarily close under a public health order that directed all marijuana designated consumption areas that do not serve food to close to the public.

District of Columbia

Mayor Muriel Bowser's emergency order in response to COVID-19 lists medical marijuana dispensaries as essential businesses allowed to operate and the Department of Health issued emergency rules for medical marijuana dispensaries. No further COVID-19-related changes have been made to the District's medical marijuana program. Although recreational marijuana use is lawful, sales are barred by Congress, so the Mayor's emergency order does not address adult use marijuana.

Illinois

Essential services under Governor J.B. Pritzker’s stay-at-home executive order include:
  • Cannabis production.
  • Licensed medical dispensaries.
  • Licensed adult use cannabis dispensaries.
  • Licensed cannabis cultivation centers.
The state’s Department of Financial and Professional Regulation issued guidance to dispensaries on March 17, 2020. This guidance states that medical marijuana dispensaries may sell medical cannabis to patients and Opioid Alternative Pilot Program participants outside a limited access area, such as a curb adjacent to the dispensary, until March 30, 2020, provided dispensaries follow certain guidelines. Illinois allows telemedicine consultations for card renewals only.
Adult use marijuana sales must still take place inside the limited access area.

Maine

On March 31, 2020, Maine Governor Janet Mills signed a stay home order, which classified medical marijuana dispensaries as essential. Maine allows telemedicine consultations for medical patients for both initial appointments and card renewals. On April 1, 2020, the state Office of Marijuana Policy issued a supplemental memorandum providing additional guidance to licensees. Though Maine has issued retail licenses, retail sales have not started.
On April 10, 2020, state Office of Marijuana Policy Director Erik Gunderson issued a press release announcing that there is no timeline for the start of retail marijuana sales, delaying a planned Spring 2020 start date.

Massachusetts

On March 21, 2020, Massachusetts Governor Charlie Baker signed an extension of the COVID-19 emergency order closing non-essential businesses in the state. Massachusetts Cannabis Control Commission (CCC) issued a cease and desist order interpreting the emergency order and mandating the closure of all adult-use recreational operators in the state but allowing the medical marijuana sector to remain operational as an essential service.
On April 7, the CCC issued a revised cease and desist order clarifying the scope of closures and the ongoing responsibilities of all licensees, including facility security and license renewal. For more information on adult use marijuana enterprise closures in Massachusetts, see Legal Update, Massachusetts Orders Temporary Closure of Recreational Marijuana Businesses.

Michigan

Both recreational and medical marijuana businesses are deemed essential under Michigan's state of emergency executive order in response to COVID-19, as clarified by an emergency bulletin issued by the state Marijuana Regulatory Agency (MRA) on March 23, 2020. The bulletin announced the agency is requiring licensed provisioning centers and marijuana retailers to engage in sales through curbside service and delivery only. Previously, retailers needed a separate license to deliver marijuana.
Other temporary COVID-19 measures that the MRA have taken include:
  • Extending the period of prequalification status for medical marijuana license applicants.
  • Suspension of on-site license pick-ups.
  • Relaxing customer identification requirements.

Nevada

On March 20, 2020, the Nevada Department of Taxation announced that medical and adult use marijuana sales will only be allowed by delivery. Storefronts must close and curbside pickup will not be permitted. The Marijuana Enforcement Division (MED) also implemented new virtual delivery vehicle inspection procedures to address any increase in market demand for marijuana delivery.
Cultivation facilities, production facilities, distributors, and independent testing facilities will be allowed to continue operations while following social distancing guidelines. Patient consultations should be limited to phone or video only, for both initial appointments and prescription renewals.

Oregon

Neither adult use or medical marijuana businesses are on the list of businesses to be closed in the governor's March 23, 2020 executive order. Therefore, they may remain open as long as they designate an employee or officer to establish, implement, and enforce social distancing policies, consistent with guidance from the Oregon Health Authority. The Oregon Liquor Control Commission (OLCC) has implemented the following temporary rules for marijuana licensees in response to the outbreak:
  • Retailers may, but are not required to, conduct on-site delivery, also referred to as curbside pickup to customers, as long as:
    • The customer's order is received prior to pick up;
    • The sale is made during regular business hours; and
    • The sale is recorded in a standard sales receipt with no delivery manifest.
  • Medical marijuana cardholders and caregivers can increase the amount of marijuana they purchase to 24 ounces per day and no more than 32 ounces per month.
On April 7, 2020, the OLCC issued updated guidance related to COVID-19.

Washington

Workers supporting the retail cannabis industry are classified as essential according to state guidance and marijuana businesses may remain open.
Modifications to existing cannabis operations include:
  • Expansion of curbside retail sales beyond qualified medical patients to adult use customers, subject to certain restrictions.
  • Minors are temporarily allowed in licensed marijuana producer and processor facilities to accommodate families due to school closures, subject to certain restrictions.

Vermont

Medical marijuana retailers remain open following the Governor's COVID-19 emergency order closing non-essential businesses. However, while recreational marijuana is legal in Vermont, there is no licensing and no recreational marijuana retailers.
For more information regarding: