By Kathryn Burnham, MA
Roughly two-thirds of states have medical cannabis programs in place to address the growing demand in the US. As cannabis remains a Schedule 1 drug at the federal level, each state has control over their program, which means there is no agreed upon “best practice” when instituting a medical cannabis program (National Conference of State Legislators). This post will outline the history of legislation in West Virginia, how one applies to open a cannabis related business, the potential good the new market can bring to West Virginia, and finally a few recommendations as we move forward with the implementation of the medical program.
History of Legislation and Action in West Virginia
The Medical Cannabis Act (presented as Senate Bill 386) allowed for the formation of a medical cannabis program in West Virginia. SB 386 was signed into law by the governor in April 2017. At this point, there were limitations on the types of products that could be produced and sold in West Virginia. The production and sale of dry leaf was excluded, but consumers could obtain a 30-day supply of pills, oils, creams, tinctures, or vaporized products. Additionally, it outlined that West Virginians with any of 15 specific medical conditions can be prescribed cannabis for symptom management. The Medical Cannabis Act also provided funding for research related to how cannabis can be used for palliative care, substance abuse intervention, and law enforcement. The Department of Health and Human Resources (DHHR) would take the lead on developing the Medical Cannabis Program in the State.
During the following three years, there have been developments in instituting the Medical Cannabis Program, but the infrastructure has not been put into place as of March 2020. Issues related to banking were a point of contention. In early 2018, the state contracted bank refused to participate in the medical cannabis program. As cannabis is still federally illegal, federally regulated banks can have action taken against them and the money deposited within them will likely not be insured. This prompted the WV State Treasurer’s Office to begin a bidding process for a banking institution to handle the revenue from cannabis businesses. In August 2019, the Element Federal Credit Union was selected to handle banking for the Medical Cannabis Program. Given the way in which credit unions have been utilized in other states, the services applicable to cannabis related bankers may be limited.
Once the banking issue was resolved, the DHHR sent out a call for applications for dispensaries and growing and production permits in late 2019. The application process closed in early March 2020 and the DHHR estimates that no decisions would be made for up to six months. Most recently, legislation (SB 339) was signed into law in March 2020. Among other provisions, this bill assigned the DHHR the authority to institute rules related to the medical cannabis program and allows for the production and sale of dry leaf as a part of the medical cannabis program when an infrastructure is in place.
Opening a Medical Cannabis Business in West Virginia
There are a number of important considerations when applying for a permit to produce, distribute, or sell cannabis in WV. First, there are a limited number of permits available – 10 grower permits, 10 processor permits, and 100 dispensary permits. Moreover, one person may not be given more than one permit for a growing or distribution operation or 10 dispensary permits. Furthermore, there are restrictions related to the location of cannabis businesses stating that all businesses must be further than 1,000 feet from public or private schools or daycare centers. The DHHR also requires criminal background checks for all persons included on the application.
The cost of obtaining a permit for cannabis business in West Virginia differs based on the type of business one is interested in opening. For dispensaries, the non-refundable permit application cost is $2,500. When submitting the application, a $10,000 dispensary permit fee is also due, but is refundable should the application be denied. For growers and processors, the non-refundable permit application cost is $5,000 and the refundable permit fee due with the application is $50,000. In addition to application and permit fees, applicants must show proof of capital in varying amounts. For dispensaries, the applicant must show proof of $150,000 in capital available in liquid assets - which includes cash, currency, stocks, bonds, and investments – in the name of the business. For growers or processors, $2,000,000 in capital is required and $500,000 must be available in liquid assets. Growers and processors can use business related buildings and equipment as liquid assets.
Helping West Virginians in More Ways Than One
There are several ways in which cannabis can impact the lives of West Virginians. For instance, cannabis can help alleviate the symptoms of chronic diseases, address the opioid epidemic, and create an abundance of jobs.
West Virginians with Cancer. Medical cannabis is known for its pain reduction or relief properties, among other health related benefits – such as reducing nausea and increasing appetite - which can provide relief to the symptoms of a variety of chronic disease, including cancer. West Virginia has a high rate of cancer diagnoses and is 3rd in the country for cancer deaths. According to the Department of Health and Human Resources (DHHR), 1 in 8 adults in West Virginia is a survivor of cancer and 29% of West Virginians have had some form of cancer. Cannabis can directly improve the lives of West Virginians by reducing symptoms of chronic diseases, like cancer, while decreasing opioid prescriptions, which historically has been used to address pain management.
Addressing the Opioid Epidemic. On the subject of opioids, West Virginia has been hit hard by the opioid epidemic. West Virginia has one of the highest rates of opioid prescriptions(81.3 scripts for every 100 people) and the highest rate of opioid overdoses in the country(49.6 deaths per 100,000 people). While research related to the medicinal benefits of cannabis have been limited by its federal legal status, some research has found that cannabis use has reduced the reliance on opioids for chronic disease sufferers, can be used as a replacement for opioids for pain management, and can be utilized to help to minimize withdrawal symptoms for those with opioid addictions (Mack 2000;Boehnke, Litinas, and Clauw 2016;Haroutounian et al. 2016;Aviram 2018;Tilburg, Hodge, and Gourdet 2019). Cannabis prescriptions have the potential to help reduce the harm brought on by and the lethality of the opioid epidemic in West Virginia.
The Labor Market in West Virginia. West Virginia has an unemployment rate of 5%, which is higher than the national average and one of the highest in the US. This is generally attributed to declining coal production within the state which drastically limits jobs, especially jobs that pay a living wage. Needing new sources of revenue and job creation in the state, hemp production has flourished in West Virginia given the climate. From 2018 to 2019, the number of hemp farms has increased from 24 to 132, from which comes jobs and state revenue. The cannabis market could similarly provide the economic boost West Virginia needs, as with cultivation, distribution, and sales comes a number of skilled and unskilled job opportunities and revenue for the state.
Recommendations
There are several recommendations that can be made in regard to the legal market for job-seekers and consumers. There is an on-going debate in the US as to whether or not cannabis convictions should be expunged from criminal records. Over the last several decades, cannabis arrests and convictions have been concentrated among the most vulnerable populations – those who are low income and/or those who identify as a racial or ethnic minority. The West Virginia legislature has not indicated that expungement of convictions is on their radar, but the importance of this cannot be overstated. If anything, there should be measures in place to address how criminal convictions, especially related to cannabis, would preclude West Virginians from applying for cannabis related jobs, or jobs in general.
In regard to access, taxes on cannabis products and businesses should be reasonable, as other states have taken advantage of taxing cannabis to maximize their profit while they still have the ability to set tax rates on cannabis products. While revenue for the state is important, what is more important is to make sure those who need access to cannabis have access. On this subject, another recommendation would be to readdress the issue of home cultivation or agreements with other states to purchase products as part of their medical program, which is not allowed in West Virginia currently. While an infrastructure is put into place for the medical cannabis program, access to even a few plants will help some consumers get the help and relief they need. Additionally, states bordering West Virginia, such as Pennsylvania, Ohio, and Maryland, have an established medical program in place, but do not accept out of state medical cards. Working with these states to come to an agreement to allow West Virginians the ability to travel over state lines to buy medical cannabis could similarly provide them with the products they need to address their symptoms while waiting for the medical cannabis program in West Virginia to come to fruition.
The Medical Cannabis Program in West Virginia has the potential to physically and economically improve the lives of West Virginians in a variety of ways, such as, but not limited to, helping with symptom management for a range of medical conditions, decreasing opioid use and harm, and providing an increase in jobs. The creation and implementation of this program is exciting for the state and the TTSRC hopes to help understand its impact on West Virginia moving forward.