Alabama Medical Cannabis Commission expected to grant production, distribution licenses

But with limits on the number of companies that can participate, litigation is likely

By: - June 12, 2023 7:01 am
A man tends a crop of marijuana plants in an indoor growing facility.

Americans for Safe Access found that the number of medical cannabis patients continues to expand across the country, now numbering more than 6 million. That represents an increase of close to 1 million patients from the 2021 State of the States report.

The Alabama Medical Cannabis Commission (AMCC) is expected to grant the long-awaited licenses for the state’s new medical cannabis program on Monday.

Brittany Peters, who oversees communications for the AMCC, said that the Monday meeting will begin at 9 a.m. and will resemble the last two meetings in which the commission recessed for an executive session to discuss the applicants.

The AMCC will review the application scores and application materials before returning to the open session around 1 p.m., but the executive session may run past that time, she said. Back in the open session, the commission will vote on awarding the licenses.

The University of South Alabama will score each application. But the AMCC will determine which applicant and how many will get a license.

“The commission ultimately has the decision on who to award licenses to and how many to award,” Peters said. “Scores are used to inform their decision.”

The medical cannabis commission received 96 applications for six different types of licenses. Up to five licenses will be awarded to integrated facilities, for which the commission received 38 applications, by far the most competitive set of applications. 

According to the commission, each integrated facility will operate five dispensaries, and they will be responsible for growing cannabis from seed to selling the product in dispensaries.

The commission will also award up to 12 licenses to cultivators, for which the commission received 12 applications. It also received 12 applications for processors, of which up to four licenses will be awarded. For dispensaries, the commission received 18 applications and will award up to four licenses.

The two other types of licenses will go to secure transporters and state testing labs. The commission can choose the number of licenses to award in those areas. It received 11 applications for secure transporters and three for state testing labs.

Alabama became the 36th state to legalize medical cannabis in 2019 and established the AMCC to roll out the program.

Aspiring medical cannabis companies

Several companies are aiming to get one of the few licenses available.

Carmelo Parasiliti, founder and CEO of Green Acres Organic Pharms in Florence, said he is hopeful Alabama will award his company a medical cannabis processing license on Monday.

Parasiliti started Green Acres in 2019 after the federal government greenlit hemp research and production through the 2018 Farm Bill. It was difficult at first, he said, and he and his wife struggled to get the business off the ground for at least one year. Parasiliti kept his job at his family’s business and chose to live in an RV to fund his business.

“We basically sold our house, got rid of all of our belongings and sold it to buy lab equipment,” he said.

With fewer than 10 employees, they have been able to process hemp for farmers, but the company also started developing its own brand of CBD products.

Because they have experience with processing hemp products, such as CBD extraction, and the process is so similar, Parasiliti is confident they can get medical cannabis products to Alabamians “safely and quickly.”

“We already have everything,” he said. “We need to kind of just flip the switch.”

Hornet Medicinals, which applied for an integrated facility license, partnered with the Alabama State University (ASU), a Historically Black College and University (HBCU).

Liberty Duke, president of Hornet Medicinals’ Board, said that the partnership with the university will provide ASU the capital to kickstart the program and provide dispensing locations, and the university will provide manpower and facilities, as well as research expertise.

“If ASU has the ability to fund 400, 500 scholarships a year with this money, by having the license and having that kind of permanent revenue – earning their own endowment – then we’re doing good things in communities that normally fell to addictions and then just bad options,” she said.

Duke said that the job training students could receive through the program would be the equivalent of working in the pharmaceutical industry.

“For us to not only be able to offer hundreds of scholarships a year from the proceeds to the foundation, but to be able to also give those internships and jobs and to keep all that here was attractive to me,” Duke said.

Litigation likely

With applications outnumbering available licenses, legal challenges are likely. The commission was sued in April over the rejection of licensing documents submitted through an online portal, according to Alabama Daily News.  

Two of the three companies, Med Shop and TheraTrue, will have their application reviewed, but RedBud Remedies’ complaint was denied.

On Tuesday, RedBud Remedies filed an emergency injunction to the circuit court of Montgomery County to prevent the AMCC from awarding the four dispensary licenses on June 12 pending the appeal, which court filings said “no findings of fact were included in the final judgment.”

The court denied the motion for an emergency injunction on Thursday morning.

RedBud’s legal counsel declined to comment on the case.

At least one medical marijuana company has already signaled that a challenge to residency requirements for cannabis cultivation could be coming. Out-of-state firms have argued that such provisions violate the commerce clause of the U.S. Constitution by restricting interstate commerce. 

Those challenges have yielded mixed results. In Maine, the U.S. First Circuit Court of Appeals struck down the residency requirement last year, but an U.S. District Judge upheld a residency requirement in Oregon in February.

If ASU is able to enter the medical cannabis industry through Hornet Medicinals, Duke said that it would position the university to build generational wealth and “shine in the big pharma of Perdue’s, Harvard’s and Emory’s.”

“The difference between some of these HBCUs and Ivy League colleges, those Ivy League colleges have been endowed with money that’s coming on a century at this point,” Duke said.“They have patents that pay them forever and ever. That’s what I want for ASU, to create projects that give them patents and residual revenue so that they can continue to grow.”

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Alander Rocha
Alander Rocha

Alander Rocha is a journalist based in Montgomery, and he reports on government, policy and healthcare. He previously worked for KFF Health News and the Red & Black, Georgia's student newspaper. He is a Tulane and Georgia alumnus with a two-year stint in the U.S. Peace Corps.