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Historic Night for Cannabis Legalization

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Tuesday night was the biggest electoral victory for cannabis reform since Colorado and Washington's 2012 approval of the recreational use of cannabis, with eight states passing ballot measures legalizing some form of cannabis use.

Specifically, voters approved new medical cannabis programs in North Dakota, Arkansas and Florida, while Montana's medical program was expanded. Voters also approved measures for the legalization of recreational use of cannabis by adults in California, Massachusetts, Nevada and Maine. Arizona was the only state that rejected a cannabis-related ballot measure, which would have permitted the use of recreational cannabis. However, it should be noted that the medical use of cannabis has been legal in Arizona since 2010.

While these states' pro-cannabis vote on Tuesday was certainly historic, the 2016 presidential election may have left the cannabis industry with much uncertainty going forward. Although GOP President-elect Donald Trump has stated that he is "in favor of medical marijuana 100 percent" and has indicated that he would reschedule cannabis from a Schedule 1 substance (under the Controlled Substances Act of 1970) to a Schedule 2 or even Schedule 3 substance, it is not clear how the President-elect will address recreational cannabis during his administration – though he has stated in the past that he would respect states' rights with respect to the cannabis industry. Thus, it is a possibility that the Trump administration will continue to operate under the August 29, 2013, "Cole Memorandum" in which the U.S. Department of Justice shifted away from strict enforcement of federal cannabis prohibition and toward a more hands-off approach in "jurisdictions that have enacted laws legalizing marijuana in some form and that have also implemented strong and effective regulatory and enforcement systems to control the cultivation, distribution, sale and possession of marijuana."

Medical Cannabis Ballot Initiatives

Arkansas: Arkansas voters said yes to Initiative 6, the Arkansas Medical Cannabis Amendment of 2016, which will allow patients with certain medical conditions to buy cannabis from state-licensed dispensaries. These medical conditions include cancer, glaucoma, HIV/AIDS, hepatitis C, amyotrophic lateral sclerosis, Tourette's syndrome, Crohn's disease, ulcerative colitis, PTSD, severe arthritis, fibromyalgia, Alzheimer's disease, severe nausea and several other conditions. The amendment limits the number of state-licensed cannabis growing operations to between four and eight facilities, and the number of state-licensed dispensaries to between 20 and 40 such dispensaries. The law may still face opposition from Republican Governor Asa Hutchinson, who once headed the federal Drug Enforcement Administration. The amendment also calls on Governor Hutchinson to appoint a committee that will make many of the determinations as to the licensing process. Additionally, municipalities will have to vote on whether or not to allow the dispensaries in their counties or cities.

Florida: Florida's medical cannabis act will allow the use of medical cannabis for treating non-terminal patients suffering from debilitating conditions such as cancer, epilepsy, glaucoma, AIDS, post-traumatic stress disorder, amyotrophic lateral sclerosis, Crohn's disease, Parkinson's and multiple sclerosis. Florida's law tasks the Florida Department of Health with setting up regulations and procedures establishing qualifications and standards for caregivers, who will grow and provide the medical cannabis to patients with a doctor's recommendation. The procedures will include conducting appropriate background checks, and procedures for the issuance and annual renewal of caregiver identification cards. The department may also limit the number of qualifying patients a caregiver may assist at one time and the number of caregivers that a qualifying patient may have at one time.

North Dakota: North Dakota's law now makes it legal for North Dakota residents who suffer from one of several debilitating illnesses to use cannabis with a doctor's permission, and to possess up to three ounces of cannabis for medical purposes from either a state-licensed dispensary or a personally grown supply. The North Dakota Department of Health will license non-profit compassionate care centers, which will cultivate a limited amount of medical cannabis and dispense it to registered patients. The law includes the most common severely debilitating medical conditions, as well as other types of medical conditions like chronic back pain.

Montana: Montana's law seems to be a reaction to the state legislature's restrictions on a previous medical cannabis amendment that passed in the state in 2004. The new law reverses the restrictions that a 2011 state law placed on the 2004 voter initiative legalizing medical pot in the state. These restrictions banned dispensaries, limited the qualifying medical conditions and rendered doctors that recommended medical cannabis to more than 25 patients a year subject to review. The new law details licensing requirements, fees and prohibitions for medical cannabis dispensaries and testing laboratories and allows providers to hire employees to cultivate, dispense and transport medical cannabis.

Recreational Cannabis Ballot Initiatives

California: Proposition 64 will put in place a comprehensive plan to control, regulate and tax the sale and purchase of cannabis to adults 21 years of age and older for recreational purposes. The new law will allow adults to possess, transport and purchase up to one ounce of cannabis and eight grams of cannabis concentrates, while also permitting adults to grow up to six plants. Proposition 64 imposes a 15 percent tax on all cannabis sales. The tax revenues will be placed in the newly established California Marijuana Tax fund, which will direct revenues to funding youth substance abuse programs, state and local law enforcement efforts, environmental restoration, medical cannabis research, and economic development and job placement.

Nevada: Question 2 will make it legal for adults 21 years of age and older to possess and use one ounce of cannabis, or one-eighth of an ounce or less of concentrate. Adults will also be able to grow six cannabis plants for personal use. Question 2 will put in place strict rules for the cultivation, production, distribution and sale of cannabis in Nevada. Question 2 will also impose rules on those whom operate facilities that cultivate, produce and dispense cannabis products in Nevada. Question 2 also imposes a 15 percent tax on cannabis, with the proceeds of such tax being put toward education.

Massachusetts: Under the new law, adults 21 years of age and older will be able to use, grow and possess less than ten ounces of cannabis inside their homes and less than one ounce in public. Adults will also be able to grow six plants in their home. Sales of cannabis will be subject to a 3.75 percent sales tax, in addition to the state's regular sales tax. The measure also puts in place the Cannabis Control Commission, which will issue licenses and regulate the industry.

Maine: Question 1 will allow adults 21 years of age and older to possess up to 2.5 ounces of cannabis and cultivate up to six flowering cannabis plants and 12 immature plants. The Maine Department of Agriculture, Conservation and Forestry will regulate the industry, and the measure will include a ten percent sales tax. Maine will also allow for the creation of cannabis social clubs.

Baker Donelson's Cannabis Law and Regulation Group is tracking these developments daily and is ready to advise clients with any questions regarding the cannabis industry. Please do not hesitate to contact Baker Donelson for more information on navigating the complex waters of these changes in the law.

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