ABC board ponders medical marijuana rules on advertising, 'edibles,' transport and more | Arkansas Blog

ABC board ponders medical marijuana rules on advertising, 'edibles,' transport and more

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THE ABC BOARD: (from left) Board members Mickey Powell, Steven Smith, Dan Greenberg, Jean Hervey and Jamie Anderson; staff attorney Mary Robin Casteel and ABC Director Bud Roberts. - BENJAMIN HARDY
  • BENJAMIN HARDY
  • THE ABC BOARD: (from left) Board members Mickey Powell, Steven Smith, Dan Greenberg, Jean Hervey and Jamie Anderson; staff attorney Mary Robin Casteel and ABC Director Bud Roberts.

UPDATE: The ABC board met briefly Tuesday to hear revisions to the rules and vote to accept them as amended. Here's the document.

The most significant change regards advertising. Rather than a blanket prohibition on TV, radio and print ads, the rules endorsed by the ABC board on Tuesday restrict such commercials based on their likely audience. Staff attorney Mary Robin Casteel told the board that ads can only appear on a broadcast program or in a publication in which audience statistics provide "reliable evidence that no more than 30 percent [of the audience] ... is reasonably expected to be under the age of 18." Casteel said those restrictions were "taken straight from another state’s advertising regs."

(A note of clarification about edits — I updated this post Tuesday morning to include the rules document and other changes, but not all of my edits were saved, due to technical problems. That lead to some confusion and internal inconsistencies in the post. It's now Wednesday, March 1, and I am reinstating my lost updates from yesterday as best I can. Apologies.)

Original post:

The board of the Alcoholic Beverage Control Division met Monday morning to discuss rules for the regulation of dispensaries and cultivation centers under Arkansas's new constitutional amendment legalizing medical marijuana.

After a review of the lengthy draft rules, the board suggested a number of changes. It will continue that discussion Tuesday morning and will likely vote to approve the amended rules, to be followed by a public comment period.

ABC is one of three state entities charged with regulating medical marijuana: The state Department of Health will govern patient registration and the testing and labeling of marijuana products, and the Medical Marijuana Commission is charged with licensing dispensaries and cultivators. Both the Health Department and the commission have finalized their drafts and are soliciting public comments in advance of separate public hearings. All rules must be in place by early May.

Mary Robin Casteel, a staff attorney for ABC who drafted the rules and presented them to the board this morning, said they were "taken from a review of several states that have implemented medical marijuana" or recreational marijuana. She cautioned the board that various marijuana-related bills now being considered by the General Assembly could require the crafting additional rules should they become law.

Among the questions that came up on Monday:

1) What advertising to allow, if any. As presented Monday, the rules would prohibit almost all medical marijuana advertising, including TV, radio, billboards and print media; internet advertising would be permitted only on a website restricted to audiences over the age of 18. That rule will likely change. (UPDATE: It did; see above.) Some board members pointed out that a near-blanket prohibition would make it very difficult for a patient to locate a dispensary, or vice versa. Dan Greenberg, the new chair of the ABC board, said, "I think at some level we have to keep standards of commercial reasonableness in mind" and suggested the board take up the issue Tuesday. (Proposed legislation also proposes a blanket ban on marijuana advertising.)

2) Limiting edible products. The draft rules would not ban "edibles," but would significantly limit the manufacture and sale of such products, out of concern for child safety. "The key is that it can’t look, taste, smell, whatever, like candy,” Casteel said. Among other things, the rules prohibit "products in the shape of an animal, vehicle, person or character." A bill in the legislature would ban edible products entirely. (UPDATE: The rules were amended to allow flavored products, as long as they don't resemble candy in appearance.)

3) Dispensaries' growing capacity. Although this did not come up in discussion Monday, the draft rules contain a definition of "mature marijuana plant" that could be crucial in determining the shape of the medical cannabis economy to come.

Although most of the marijuana to be sold in the state will be produced by a few big cultivators, the Arkansas Medical Marijuana Amendment allows dispensaries to grow up to 50 mature plants at any one time, plus seedlings. However, the amendment doesn't define "mature plant" — is it a plant over a certain height? one that's flowering? — and it doesn't restrict the number of "seedlings" a dispensary can grow. It's not hard to imagine a well-oiled dispensary maintaining a continuous growing cycle that allows it to have a large number of immature plants in various stages of growth, each of which is harvested once it matures — thus staying on the legal side of the 50-plant threshold. But the draft rules define a "mature" plant as one over 8 inches tall, which is far shorter than the average flowering, harvestable pot plant. That could make it harder for dispensaries to claim that "teenage" plants which are well on their way to flowering are still "seedlings" and indicates the 50 plant rule will likely be pretty ironclad. (Also note that the Medical Marijuana Commission has already established a much higher fee schedule for licensing those dispensaries that choose to grow — rather than those that will simply sell products grown by cultivation facilities — and the legislature has considered removing the ability for dispensaries to grow at all. All of that points to production being more tightly controlled by the big cultivators.)

4) Can dispensaries sell non-marijuana-related products? Board member Mickey Powell asked Casteel whether the rules would allow a dispensary to sell other products besides marijuana or marijuana-related items. She replied that the answer was unclear, but no such prohibition was written into the medical marijuana amendment, as exists for liquor stores (which cannot sell groceries).  “Let’s say that you have a beer and small farm wine permit, and you get a dispensary permit for some ancillary space that you have, separated by beer and wine by a secure door, all under the same roof. Could you do that?” Powell wondered. The board will likely take this up tomorrow. However, he also noted that the ABC board has no control over actually licensing dispensaries, which is the domain of the Medical Marijuana Commission. (UPDATE: On the advice of Casteel, the board Tuesday did not act on this item. Casteel said it likely falls outside the board's authority.)

5) Child-proof containers and packaging requirements. The state Board of Health requested ABC adopt a rule requiring "child-proof" containers, meaning they abide by a specific standard. Casteel noted that this would depart from most other states: "The norm, from what I can tell, is not actually child-proof." ABC will also require that packaging not be designed to appeal to children.

6) Regulating patient access. The amendment specifies that only a certain amount of marijuana within a certain time period can be dispensed to patients, who will have photo ID cards issued by the Health Department.  Some board members expressed concern that the system could be too lax. Casteel said an inventory tracking system is being developed by ABC and the Health Department that will require every sale of marijuana at a dispensary to be logged, "so that there’s a record of how much medical marijuana has been dispensed to the qualifying patients or caregivers within the designated time period."

7) Transportation and delivery. The draft rules require marijuana being transported from cultivator to dispensary to be packaged in a specially marked shipping container locked in a "safe and secure storage compartment" in a vehicle. Several board members worried about the possibility of theft, and asked whether armored vehicles, or armed drivers, should be required. Casteel said that other states typically requires no such thing, and that transport usually occurs in "a nondescript van" or similar vehicle. The rules would require at least two employees to be present in the vehicle, though. Out of concern for theft, they would also require two employees in a vehicle from a dispensary making a delivery to a patient. (One potential entrepreneur I spoke to after the meeting said this requirement, like many others discussed, sounded unnecessarily burdensome.)

Pending legislation may allow for the formation of businesses that only serve as "transporters," as well as "processors" and "distributors." If it passes, rules must be created to regulate these entities, too.

8) Outdoor growing operations will not be allowed. Cultivation must take place inside a fully enclosed building (a greenhouse is permitted).

9) Tracking of plants. When plants reach "mature" height, they will be tagged with a radio frequency identification tag. "Once it’s 8 inches, the plant itself is tracked throughout its life," Casteel said. That tag will follow a batch of marijuana product after harvest, and will be a part of its label.

10) Disposal of unused marijuana.
Cultivators will be required to abide by specific rules to render unwanted marijuana unusable (thus preventing it from being sold on the black market), such as composting it or mixing it with other plant matter or broken glass. The board indicated it would like an ABC agent to be present when the marijuana is being destroyed. Otherwise, “I don’t know how you keep it from going out the back door," Powell said. (UPDATE: On Tuesday, the amended rules presented by Casteel require video surveillance of any part of a facility that may be used for disposing of marijuana, but do not strictly require an ABC agent to be present.)

Casteel explained after the meeting that there are various reasons marijuana might need to be destroyed, from the presence of a plant-based disease to simply a bad crop that failed to meet some standard of the cultivator. Based on the language in the amendment, which defines "usable marijuana" very broadly to include all parts of the plant — including stalks and leaves and roots — it also appears that plant waste products left after harvesting must be disposed of in this prescribed way.

11) Registration of "agents" of marijuana-related businesses. Any employee or "agent" of a dispensary or cultivator must pass a background check and be issued a registry ID card, at a fee. (Those cards will be distinct from the patient ID cards but will all be stored in the same registry shared by ABC and the Health Department, Casteel said after the meeting; there will, however, be "walls" in the database between the two state agencies' information.)

UPDATE: On Tuesday, the board decided the cost of a registry ID card for an agent will be $50, with another $37 for an initial background check. If an employee works for multiple marijuana-related businesses, an ID card will be required for each, but not a separate background check. If an employee switches businesses, he or she would have to get a new registry ID but not a new background check.


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