THE TOP 10 GUIDE & RANKING FOR STATE-BY-STATE CANNABIS REGULATIONS IN THE US

Cannabis State-by-State Regulations

We recently received word that the Tracking Cannabis Blog announced their latest state-by-state ranking of state cannabis regulations based on how favorable they are to cannabis businesses. California leads the pack, but you might be surprised by which states make the top — and bottom — of the list.

Their guide provides a holistic review of the current cannabis laws in every state and the District of Columbia, from most favorable to cannabis businesses to most restrictive. In addition, you can find each state in alphabetical order below. Jurisdictions are ranked on the following factors:

  1. Cannabidiol (CBD) derived from marijuana plants (THC concentration equal to or greater than 0.3 percent on a dry weight basis) – legality and required qualifications.
  2. Medical cannabis – legality and required qualifications.
  3. Recreational cannabis – legality and issuance of commercial cannabis licenses.
  4. Non-profit cannabis entities – permissibility and requirements.
  5. Commercial cannabis licenses – availability, caps and restrictions.
  6. Cannabis regulatory agencies – authority and qualifications.
  7. Developments and trends – support for ongoing cannabis legalization measures.
  8. Business opportunities – number of operators, consumers and untapped industry potential.

Note that this ranking is subjective, and different factors weigh more heavily in different states. All of the information regarding each state is current as of August 2019. However, laws are constantly changing and with each election the statutes in any particular state may also change. In addition, this list does not consider federal laws, which may be consistent on a national level but can be applied selectively on a state level. To find any particular state, just click on the respective link below:

#1 California

California has legalized both adult use and medical marijuana, making it one of the most relaxed states in the nation with regard to cannabis use. The Compassionate Use Act of 1996 (Proposition 215) was the first legislation in the United States legalizing medical marijuana use under state law. It has subsequently been superseded by the Medical and Adult-Use Cannabis Regulation and Safety Act. California’s cannabis market recorded $2.5 billion in sales in FY2018.

CUA allowed patients and their primary caregivers to obtain marijuana for medical use by the patient without subjecting either to criminal prosecution. The Act authorized medical use for patients with one of 11 specific conditions and included a general purpose clause that also allowed use for any condition that substantially limited the ability of a person to conduct a major life activity as defined in the ADA.

Proposition 64, also called the Adult-Use Marijuana Act, took effect on November 9, 2016. It allows adults twenty-one and older to cultivate up to six plants and possess 28.5 grams of marijuana or 8 grams of concentrated cannabis. Adults can also give away up to one ounce of cannabis to other adults. It restricts the possession or use of cannabis in certain areas like public places, non-smoking areas, daycares, schools, and vehicles.

The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), enacted in June 2017, combined the regulatory framework for medicinal and adult-use cannabis. MAUCRSA designated three agencies to oversee cannabis activity:

  1. The Bureau of Cannabis Control, which is the lead regulatory agency and authorizes licenses
  2. The California Department of Public Health – Manufactured Cannabis Safety Branch; and
  3. The California Department of Food and Agriculture – CalCannabis Cultivation Licensing.

The licensing system created by MAUCRSA is complex, with a minimum of twenty license classifications and an elaborate set of regulatory requirements established under the emergency regulations adopted by each agency.

License types include, but are not limited to, adult use, medical use, types of cultivation and manufacture, retailor or distributor, testing, and microbusiness. Once a license is granted, it is non-transferable. There are no caps on the number of licenses, but the requirements are rigorous. MAUCRSA also grants municipalities the power to further regulate commercial cannabis or to prohibit it altogether.

To be granted a state license, applicants must be residents of California, pass a background check, provide proof of a legal right to use the proposed location, apply for and obtain a valid seller’s permit, provide proof of bond, and describe the applicant’s operating procedures in detail. As the largest cannabis regulatory regime in the world, the Bureau of Cannabis Control has struggled to fill positions and conduct investigations.

In such a large market, regulatory issues are inevitable. Los Angeles’ Department of Cannabis Regulation has been slow to roll out its social equity program, causing eligible businesses to bear the costs of rent on storage and retail locations without any idea of when they can begin sales.

Controversy has also emerged over the definition of “financial interest holders” involved with cannabis companies, and what being listed as a financial interest holder may mean under federal law. Additionally, the majority of municipalities currently prohibit commercial cannabis activities, a state of affairs that Democratic Assemblyman Phil Ting attempted to address through a bill forcing municipalities where a majority of the community approved Proposition 64 to license pot retailers.

The proposed bill required such municipalities to approve one on-site cannabis retail license for every six liquor licenses, or distribute one license for every 10,000 residents, whichever is smaller. Ting has withdrew the bill for now, with plans to reintroduce it in 2020.

With regard to criminal punishment, California has very forgiving policies compared to most states. Underage use or possession often results in a small fine or counseling, with use on the grounds of a grade school having harsher punishments. Illegal cultivation and possession with intent to sell are both misdemeanors, though the latter can be enhanced to a felony depending on certain conditions. It remains a felony to employ a minor in cannabis sales or to provide cannabis to a minor.

Overall, California’s attitude toward cannabis legalization and regulation is welcoming when compared to other states. It was the first state to legalize medical marijuana and one of the first to legalize adult use. While some municipalities impose further restrictions or prohibit adult use, there are many that see legalization as an economic opportunity to be capitalized on. With a robust supply chain for both medical and adult use emerging throughout the state, California leads the nation in its regulation of commercial cannabis activity and cannabis use.

Source: The Sacramento Bee

#2 Nevada

Nevada legalized medical marijuana in 2001 and adult-use marijuana in 2017. Medical marijuana legislation is codified under Chapter 453A. Medical Use of Marijuana in Nev. Rev. Stat. §§ 453A.010 to 453A.810. Adult use marijuana is permitted under the Regulation and Taxation of Marijuana Act, which is codified in Nev. Rev. Stat. §§ 453D.010 to 453D.600.

The Nevada Department of Health and Human Services (the “Department”) is tasked with regulating commercial cannabis activity. To qualify for a medical prescription, a patient must be diagnosed with a “chronic or debilitating medical condition,” which includes conditions ranging from cancer to severe nausea.

Adult use marijuana restrictions are similar to restrictions on alcohol: users must be 21 years of age or older; marijuana may only be purchased from a business licensed in Nevada; selling or giving marijuana to individuals under 21 years of age is illegal; and driving under the influence of marijuana is illegal.

Medical marijuana establishment certificates are available for independent testing laboratories, cultivation facilities, production facilities for edibles and other products, or dispensaries. To obtain a certificate, an applicant must complete an application and pay the requisite fee.

The application requires evidence that the applicant controls not less than $250,000 in liquid assets to cover initial expenses and evidence that the applicant owns property on which the proposed medical marijuana establishment will be located or permission from the owner of the property. There is a cap on the number of certificates that may be issued, and the cap is based on county population.

Nevada’s medical marijuana businesses must follow certain rules, as set out in the statute. One such rule is that each medical marijuana establishment must have “an appearance, both as to the interior and exterior, that is professional, orderly, dignified and consistent with the traditional style of pharmacies and medical office, and have discreet and professional signage that is consistent with the traditional style of signage for pharmacies and medical offices.”

Other requirements, such as installing a video monitoring system, must also be followed. Additionally, if the city or county where the medical marijuana dispensary is located has enacted zoning restrictions, the establishment must be in compliance.

Source: Safety & Health Magazine

Licenses are issued for adult-use dispensaries if an applicant completes an application and pays the requisite fee. For 18 months after the Department began to receive applications for marijuana establishments in early 2018, the Department will only accept applications for licenses for retail marijuana stores, marijuana product manufacturing facilities, and marijuana cultivation facilities.

Currently, licenses will be issued to marijuana distributors only if the person holds a wholesale dealer license, unless an insufficient number of distributors results from that limitation. Moreover, the application is only accepted if the proposed establishment is not in violation of any zoning or land use rules adopted by the locality where the establishment would be located. There is also a cap on the number of licenses that may be issued based on county population.

Adult-use dispensaries must also follow certain rules regarding production, manufacturing, distribution, and/or sales of cannabis products. For example, cultivation, processing, and manufacture of marijuana must not be visible from a public place by unaided vision.

A key case in which 2018 applicants for dispensary licenses sued the state for an injunction when they did not receive licenses had yet to be decided in August 2019. State officials defended the process as impartial. Vegas hotels and casinos have not embraced adult-use legalization as much as the rest of the state has. Gaming is a $13 billion industry in Nevada, and casino licenses require following federal law. Vegas casinos and hotels may have too much at stake to allow marijuana smoking in their hotels, at least while marijuana use remains illegal at the federal level.

#3 Colorado

Currently, both medical and adult use of cannabis is legal within the State of Colorado. Colorado’s constitution was amended on December 28, 2000 to legalize cannabis for medical purposes, and amended again on December 10, 2012 to legalize adult use. In 2018, Colorado cannabis sales across medical and adult-use sectors were over $1.5 billion, totalling $6 billion since adult-use was legalized in January 2014.

As other states slowly move towards comprehensive cannabis legalization, Colorado’s overall attitude regarding legalization has consistently been ahead of the rest of the nation. Since the legalization of adult use marijuana in 2012, Colorado has focused on establishing a robust regulatory framework and increasing the effectiveness of these regulations through subsequent legislation.

For medical and adult use cannabis businesses wishing to operate in Colorado, the state issues licenses that vary depending upon the entity’s actual business interest. Required qualifications that must be met for every commercial cannabis license include: a background check, filing of a complete application, and payment of a licensing fee.

While Colorado does require many different qualifications to obtain a license, state law permits the transfer of commercial cannabis licenses. In some instances, local licenses might also be required which may have other restrictions on transferability. At the state level Colorado does not cap the number of licenses issued, but some counties and municipalities do restrict the number of licenses that may be issued and active within that particular county.

State cannabis regulations impose various restrictions on licensees. For example, a cultivator is only authorized to cultivate a maximum of 1,800 plants at any given time. According to the Colorado Department of Revenue, the intent of this rule is to encourage responsible production to meet demand for retail marijuana, while also avoiding overproduction or underproduction.

Additionally, the state limits the amount of cannabis that can be sold by retailers. A dispensary and its employees are prohibited from transferring more than one ounce of flower or its equivalent in a single transaction to a consumer.

One such legislative initiative proposed an increase in the punishment for a person not licensed to sell medical or adult-use marijuana advertising the sale of marijuana. Other legislative actions have been more permissive, increasing opportunities for cannabis investment in the state.

For example, HB 18-1011, signed into law on June 5, 2018, repealed a law that required limited passive investors to go through an initial background check when investing in a cannabis related company. HB 18-1011 also allows certain publicly traded companies to hold an interest in medical marijuana businesses and offer securities for investment in medical marijuana businesses.

On May 29, 2019 Gov. Jared Polis signed legislation authorizing marijuana hospitality spaces where cannabis can be consumed on the premises of dispensaries.

Source: KKTV.com


#4 Massachusetts

Massachusetts legalized the adult use of marijuana in November 2016. Any person 21 and over is no longer be penalized for possessing, using, purchasing, or giving away one ounce or less of marijuana. Individuals can also possess up to 10 ounces of marijuana from plants cultivated within their primary residence. The definition of marijuana is very broad, and unlike states like Arizona, encompasses cannabidiol.

Medical marijuana is governed by a separate act known as the Humanitarian Medical Use of Marijuana. It was enacted in 2012 and allows for the acquisition, cultivation, possession, processing, transfer, transportation, sale and distribution for the benefit of qualifying patients. The list of qualifying conditions is fairly broad and includes cancer, glaucoma, HIV, hepatitis C and Crohn’s disease. Other conditions not specified in the statute may also qualify if so determined in writing by the patient’s treating physician.

Under Massachusetts’ adult-use regulations, marijuana establishments must obtain appropriate licenses to operate legally within the state. Massachusetts offers eight types of business licenses: marijuana cultivator, craft marijuana cooperative, marijuana product manufacturer, marijuana retailer, marijuana research facility, independent testing laboratory, marijuana transport, and marijuana micro-businesses.

Commercial cannabis activity is regulated by the Cannabis Control Commission, but local municipalities can also regulate some activities. Although there is a cap on the number of licenses a licensee can obtain, cannabis businesses can operate as for-profit entities. As of July 2019, Massachusetts has issued 22 retail licenses, and Boston’s first retail store will open in fall 2019. The favorable regulatory climate and sizable market make Massachusetts a lucrative state for commercial cannabis operators.

#5 Oregon

Oregon legalized the use of medical marijuana in 1998 with the passage of Measure 67, known as the Medical Marijuana Act (OMMA). OMMA modified state law to allow the cultivation, possession, and use of marijuana by patients with certain medical conditions upon recommendation by a doctor and compliance with OMMA. The rulemaking authority pursuant to OMMA is vested in the Oregon Health Authority.

Under OMMA, in order to legally use marijuana for medical purposes a person must first obtain a registry identification card under 47B.797. To do so, a person must have a “debilitating medical condition” as defined in ORS 475B.791(6) and provide written documentation from an attending physician certifying the patient has “a debilitating medical condition and that the medical use of marijuana may mitigate the symptoms or effects of the applicant’s debilitating medical condition.”

Patients with medical condition that are not listed in 791(6), may petition the Oregon Health Authority, pursuant to ORS 475B.946, to have their condition included among the diseases and conditions that qualify as debilitating medical conditions. Employers are not required to accommodate the medical use of marijuana in the workplace.

Oregon legalized adult use of marijuana in 2014 with the passage of the Adult and Medical Use of Cannabis Act. The Act became operative on July 1, 2015. The Act expressly does not amend nor affect the Medical Marijuana Act. The rulemaking authority pursuant to the Act is vested in the Oregon Liquor Control Commission.

The Adult and Medical Use of Cannabis Act legalizes the possession, use, and cultivation of marijuana by adults age 21 or older. Pursuant to ORS 475B.301, persons aged 21 or older may grow up to four marijuana plants in their household, may possess up to eight ounces of useable marijuana, may produce and/or possess up to 16 ounces of cannabinoid products in solid form, produce and/or possess up to 72 ounces of cannabinoid products in liquid form, and may produce and/or possess up to 16 ounces of cannabinoid concentrates. A variety of licenses are available for activities such as production, processing, wholesaling and retailing.

Since legalizing cannabis, Oregon has increased its efforts to curtail illegal production and transportation of marijuana as black market activity has continued to grow. In a May 2018 memorandum written by U.S. Attorney for Oregon Billy J. Williams in which he stated “there can be no doubt that there is significant overproduction of marijuana in Oregon. As a result, a thriving black market is exporting marijuana across the country, including to states that have not legalized marijuana under their state laws.”

As of August 2019, Oregon licensed 1,136 recreational growers. Some growers have recently gone out of business, and prices have stabilized for the moment.

Due to overproduction, on May 30, 2018 the OLCC announced it would temporarily “pause” accepting new applications for licenses under the Adult and Medical Use of Cannabis Act. In addition, in June 2019 Gov. Kate Brown signed a state law intended to allow Oregon to negotiate with other states to sell a portion of the marijuana surplus.

#6 Illinois

Illinois legalized cannabis for medical purposes in 2014. Users of medical cannabis must have been diagnosed with a “debilitating medical condition” by a licensed physician. Users may only possess a maximum of 2.5 oz of usable cannabis during a 14-day period.

In July 2016, Public Act 99-0697 reduced penalties associated with the adult use of cannabis. In August 2018 the state legislature passed a law allowing medical cannabis to be used as an alternative to opioids for some medical conditions. The law allows state residents who are given an opioid prescription to ask their physicians for medical cannabis instead.

On June 25, 2019, Gov. J.B. Pritzker signed HB 1438, the Illinois Cannabis Regulation and Tax Act, into law. The bill legalized the adult use and purchase of cannabis. For recreational purposes, Illinois residents over 21 can possess 30 grams of cannabis flower, 5 grams of concentrate and 500 milligrams of THC in products such as edibles. Illinois visitors are able to possess half those amounts. Unlike medical marijuana patients, adult users are not permitted to grow marijuana at home.

HB 1438 also created a $30 million dollar loan program to help social equity applicants with cannabis industry start-up costs. Applicants qualify based on being in a disproportionately impacted area and having a cannabis charge expunged as a result of the new law.

HB 1438 does not affect medical marijuana users, except to the extent the bill mandates that any medical dispensary can apply within sixty days of the passage of HB 1438 for an Early Approval Adult Use Dispensing Organization License. In a shortage, such dispensaries must prioritize medical patients before recreational purchasers.

Illinois’ Department of Revenue projects the industry to generate over $57 million in tax revenue and fees in FY2020. An excise tax of 10% is imposed on products with less than 35% THC, and a tax of 25% is imposed on products with higher doses. The new law is in effect beginning January 1, 2020. Initially, medical marijuana dispensaries will be the only licensed retailers, but by mid-2020 new licenses will be granted to dispensaries, processors, cultivators and transporters.

Source: RobinOlimb/Getty

#7 Michigan

On November 6, 2018, Michigan voters legalized adult-use cannabis with the passage of Proposal 18-1, also known as the Michigan Regulation and Taxation of Marijuana Act (“MRTMA”). At the time of its enactment, Michigan became the 10th state to legalize recreational cannabis and the first to do so in the Midwest.

MRTMA authorizes and legalizes the possession, use and cultivation of cannabis products by individuals at least 21 years of age. The new law tasks the Department of Licensing and Regulatory Affairs with promulgating rules and procedures 8 | Thompson Coburn Blog Post for issuing cannabis licensing in the state. The state will not cap the number of licenses at the state level, although municipalities are authorized to do so. Non-Michigan residents are permitted to invest in cannabis businesses in the state.

Previously, in 2018, the Michigan Medical Marihuana Act (“MMMA”) legalized the use and possession of cannabis by any Michigan resident diagnosed with a debilitating medical condition. Presently, a debilitating medical condition includes cancer, glaucoma, Hepatitis C, Crohn’s disease, Alzheimer’s, and any other medical condition approved by the Michigan Department of Licensing and Regulatory Affairs.

The general regulatory framework established under the new law is particularly business-friendly, as it establishes tax rates (6% sales tax and 10 percent excise tax) lower than most states that allow adult use, and the state permits for-profit licensees. For medical-use cannabis-related businesses wishing to operate within the state, Michigan issues licenses that vary depending upon the company’s actual activities.

Each license is subject to different statutory qualifications. In 2016, Michigan enacted the Medical Marihuana Facilities Licensing Act, which provided for the licensure of growers, processors, secure transporters, provisioning centers, and safety compliance facilities. Once obtained, all of the aforementioned licenses may be transferred after state approval.

Statutory limitations restrict the production of medical-use cannabis. The limitation depends on the company’s class of license. For example, a “Class A” production license allows a company to produce 500 cannabis plants, while a “Class B” license permits a company to produce 1,000 cannabis plants.

Recreational sales are on hold until 2020, but the Marijuana Regulatory Agency accepts applications for business licenses starting November 1, 2019. Regulators have issued a set of emergency rules that anticipate more thorough guidance. Barriers of entry for business licenses are substantially lower than those for medical licenses; a business license does not require proving a daunting amounts of assets, fees are lower, and the license itself is a third of a medical license’s cost. Other emergency rules allow businesses to permit use at social events while banning drive-through, mobile marijuana shops and online sales.

Also in 2016, House Bill 4210 amended the Michigan Medical Marihuana Act to prevent a person from being penalized for manufacturing a marijuana-infused product if the person was a qualified registered patient or a registered primary caregiver. On the municipal level, cannabis activity is regulated by local governmental authorities. In towns such as Ann Arbor, where an annual “Hash Bash” event has been celebrated by residents and University of Michigan students for almost 50 years, local ordinances regulate and license cannabis dispensaries.

As evidenced by the recent passage of MRTMA, Michigan’s overall attitude regarding legalization has consistently been ahead of most states in the nation.

#8 Maine

On May 2, 2018, the Maine Legislature overturned a veto by then-Gov. Paul LePage in order to pass adult-use legalization. The Legislature voted heavily in favor of passing the bill, as the House votes tallied 109-39 in favor and the Senate votes tallied 28-6 in favor. The Marijuana Legalization Act legalizes adult use throughout the state without restrictions on tetrahydrocannabinol (THC) limits.

The Act allows a person to both use or possess up to five grams of marijuana or marijuana concentrate without legal ramifications. The Act restricts the amounts of marijuana plants adults can use and transfer and imposes many requirements on companies seeking a license to cultivate, test, manufacture, or sell marijuana or marijuana concentrate.

A bill signed by Gov. Janet Mills in June 2019 will launch Maine recreational sales in March of 2020. It maintains the strictest barrier to entry in the retail market by requiring business to be run by individuals who have been residents of Maine for four years. Edibles will be permitted in retail stores, but edibles in the shape of animals, people or characters are not permitted.

#9 Alaska

Alaska legalized the adult use of marijuana in 2014 with a successful ballot measure, making it the third state in the nation at the time (behind Colorado and Washington) to legalize adult use. Any person 21 and over is not subject to criminal or civil penalties under state law for possessing, growing, purchasing, or transferring to another adult one ounce or less of marijuana.

The state also permits businesses to possess, grow, process, transport, or transfer to another person 21 and over up to 6 marijuana plants. The statutory definition of marijuana is broad, and likely encompasses products like cannabidiol.

Commercial businesses must obtain appropriate licenses to operate legally within the state. Alaska offers four (4) licenses: retail marijuana stores, marijuana cultivation facilities, marijuana product manufacturing facilities, and marijuana testing facilities. The licensing framework in Alaska is favorable to cannabis businesses.

These licenses can be transferred with approval from the state’s Marijuana Control Board, the state agency charged with regulating commercial business within the state. A business can operate as non-profit or for-profit, but they must be run by Alaska residents. Beginning on April 11, 2019, dispensaries in freestanding buildings can set up separate designated smoking areas for patrons. The city of Anchorage only permits consumption of edibles at dispensaries, and other local regulations may vary.

Patients with certain debilitating medical conditions can apply to register and receive a medical marijuana identification card. The law provides an affirmative defense against state-law prosecution for the manufacture, delivery, or possession of marijuana if the patient is properly registered with the state. The list of eligible conditions is broad and includes, for example, cancer, glaucoma, chronic conditions resulting in severe pain, nausea, or seizures. Other conditions may also be approved by the state’s Department of Health and Social Services.

Although the Act legalized marijuana use on private property, the use of marijuana in bars or restaurants is still entirely illegal.

Source: MGN Online

#10 Washington

Washington has a history of being ahead of the curve on marijuana legislation. The state legalized medical use in 1998 via ballot measure (Wash. Initiative 692), just two years after California became the first state to legalize medical marijuana. On November 6, 2012, Washington became one of the first two states to legalize adult use (along with Colorado on the same day) by passing Washington Initiative 502.

This legalized adult-use marijuana for those 21 years and older. Sales began in July 2014, and while the first years of adult-use legalization led to double digit YOY increases, as of 2019 sales have slowed to single digit increases for the first time in the state’s short history. Wholesale cannabis prices have suffered a commensurate decline.

Given the longer duration of Washington’s medical and adult-use marijuana programs, the laws and regulations are more comprehensive than other states. The medical program is run through the Washington State Health Department, while the adult-use program is run by the Washington State Liquor and Cannabis Board.

Chapter 69.51A of the Revised Code of Washington offers full details on the medical program and its restrictions, while Washington Admin. Code Title 314-55 provides all regulations relevant to the adult-use program.

The adult-use program is heavily licensed, and heavily restricted. Residency requirements, financing regulations, and limits on the number of licenses per entity are all found in the Washington Administrative Code.

Source: The Portlander – Willamette Week

Weisz, Barry Weisz, and Michael Rosenblum. “The Ultimate Guide & Annual Ranking for State-By-State Cannabis Regulations in the US.” Cannabis Magazine, 11 Sept. 2019, cannabismagazine.com/the-ultimate-guide-annual-ranking-for-state-by-state-cannabis-regulations-in-the-us/.

2 thoughts on “

  1. I believe in Maine you are able to possess in public up to 2 ounces, not 5 grams. You can also possess an unlimited amount in your home.

    Like

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