A lawsuit pending in the high court. More litigation possible. The agency tasked with running it doesn’t want to. An “alternative” program proposed late in the game.
Mississippi’s fledgling medical marijuana program — overwhelmingly enshrined in the state constitution by voters in November — is an uncertain mess at the moment, even as the clock ticks for it to start.
After years of inaction by the Legislature despite growing grassroots, bipartisan support, nearly 74% of voters in November approved Initiative 65. It’s a constitutional amendment mandating and specifying a state medical marijuana program.
The measure, which opponents still claim was drafted to favor the marijuana industry and is just short of legalized recreational use, puts the Mississippi State Department of Health in charge of the program, with no oversight by elected officials. It also prevents standard taxation of the marijuana, and any fees collected by the health department can only be used to run and expand the marijuana program, not go into state taxpayer coffers. The measure allows little regulation by local governments, no limits on the number of dispensaries and otherwise leaves many specifics… unspecified.
Lawmakers, in the eleventh hour before last year’s vote, unsuccessfully tried to have voters adopt an “alternative” measure that would have allowed more state government oversight and taxation. Voters rejected this.
But the adopted constitutional amendment now faces litigation, set to be heard in April by the Mississippi Supreme Court. Madison Mayor Mary Hawkins Butler brought the challenge, arguing the state’s initiative process is flawed and the measure was improperly before voters.
The Health Department — struggling for years with underfunding, understaffing and now a pandemic — and Mississippi and American medical associations have joined in, urging the court to overturn the initiative. The state Board of Health had opposed the medical marijuana initiative, and while the board and department claim to be earnestly working to stand up a program as required by the constitution, at least for now, they would appear to be very reluctant partners.
The voter-approved initiative requires the health department to begin issuing dispensary licenses and patient ID cards by Aug. 15. But some state leaders have said the deadlines will be hard to meet and it could be much later before Mississippi patients could receive medical marijuana.
Meanwhile, lawmakers are trying another Hail Mary.
Senate Bill 2765 would create an alternative or “parallel” medical marijuana program to the one voters put in the constitution. Its author, Senate Medicaid Chairman Kevin Blackwell, R-Southaven, said it’s a bill he started working on in 2018 in hopes the Legislature would have adopted a program — before voters took matters directly in hand.
Blackwell said the bill is needed largely because the state Supreme Court could overturn Initiative 65. Then the state would still have a medical marijuana program, as voters clearly want.
But if the court upholds the constitutional amendment, Blackwell said, “They would co-exist.” The state would have two medical marijuana programs.
Supporters of Blackwell’s proposal hope that should that happen, the medical marijuana industry would view the state law program as more stable and less likely to face further legal challenges — favored by legislators and the bureaucracy and local governments.
The new proposal, which faces a Thursday deadline for a first floor vote in the Senate, would tax medical marijuana. It would be subject to an excise of 4% at cultivation and a retail sales tax of 10% when patients purchase it.
Under Initiative 65, the health department could only charge an assessment up to the state’s 7% sales tax rate on final sale of marijuana, fees up to $50 for identification cards, and “reasonable” fees for dispensaries.
Under the new proposal, money collected by the state, which Blackwell said is estimated at $32 million for the first year then “hundreds of millions” a year subsequently, would go to education. The first 25% would go to the state’s early learning collaboratives program. The next 25% would to to the Mississippi Department of Education’s dual enrollment program, and the remainder to college and university scholarships of up to $6,000 each.
The measure would have the Department of Agriculture handling most regulations, Blackwell said, and would be closely monitored “from seed to sale.” It would allow local governments more regulatory and zoning control over dispensaries.
The measure also would have hefty licensing fees: $100,000 for growers and $20,000 for dispensaries. Dispensaries would have to show proof of assets or provide a surety bond of $250,000, and growers would have to do likewise for amounts set by the Department of Agriculture.
Sen. Chris McDaniel, R-Ellisville, said he’s concerned the new proposal includes too many “anti-competitive” measures that would prohibit Mississippi small business owners from participating. Blackwell said the law requires 60% Mississippi ownership of companies, but McDaniel said large marijuana corporations could easily find ways around that proviso.
McDaniel said he also questions the 10% sales tax on medical marijuana, when the state doesn’t tax prescription drugs.
Sen. David Blount, D-Jackson, questioned how any businesses or patients — should both programs be approved — would opt for the higher-taxed, more regulated state law program.
Blackwell, in pitching his bill in committee, told colleagues he has problems with Initiative 65, and believes it unconstitutional — protecting a particular product or industry in violation of the Equal Protection Clause.
“That horse has left the barn, Senator Blackwell,” Blount said. “… I wish we had done this last year.”
Blackwell responded, “2018 would have been a good year to have done it.”