by Jeremy Roberts

On August 23, 2018, The Church of Jesus Christ of Latter-day Saints announced its opposition to Proposition 2, the citizen initiative seeking to create a state marijuana program. Speaking on behalf of the Church, Elder Jack N. Gerard of the Seventy said, “The Church does not object to the medicinal use of marijuana, if doctor-prescribed, in dosage form, through a licensed pharmacy.” He continued, “Our hope and expectation is to bring the broader community together, including all those who have a lot of experience and understanding in what we can do as followers of Jesus Christ to relieve human pain and suffering and to help those afflicted.”

As has come to be expected in our community, the statement was met with the typical derision and hostility any time the faith makes a statement. Almost any statement. Commentators were quick to demand, erroneously, the Church had violated the rules surrounding tax-exemption and demanded the that such status be revoked. Many offered critical, if not scathing, rebukes of the faith’s suggestion for medical cannabis to be prescribed. They said doctors may only legally “recommend” marijuana. They were critical of the proposal for marijuana to be sold through pharmacies, again stating pharmacies may not sell marijuana and it must be done through a dispensary. Proponents told us that no state has done what the Church stated because no state could. The faith was labeled as obstructionists, ignorant and self-serving.

The problem is, the critics were wrong.

The hasty responses and unjust criticism came from people who had not studied the issue out, it appears, as thoroughly as the Church had. Passed in 2015, Louisiana’s Act 261 authorizes physicians to prescribe (not recommend) medical cannabis and created a system of state medical marijuana pharmacies. You can read that law here: http://www.pharmacy.la.gov/…/d…/Cmtes/Legis/2015_Act-261.pdf. The criticism also ignored similar laws in multiple states, requiring state pharmacist licenses to dispense (often referring to them as pharmacies), demanding medical dosage form and requiring a prescription (not a recommendation). That’s to say nothing of the state’s own CBD law, which authorized CBD to be sold in pharmacies.

Setting aside the criticisms of the Church’s statement, proponents of the legislation seem unwilling to discuss what the bill does. Regrettably, opponents have been even less effective in communicating the very real problems with its language. Perhaps we can remedy that here.

Below I’ll offer a very few of my criticisms of the bill’s drafting, although this is not exhaustive. I may take the time to write more later.

Greatly Reduces Access to CBD

The proposition limits access to CBD to those patients who fall under the proposition’s qualifying condition list. The proposition also overrides, replaces and takes precedent over all other laws relating to medical cannabis that have already passed the legislature. That includes Senate Bill 130, passed in 2018. That legislation legalized CBD for any patient who has been recommended CBD by the patient’s physician. There is no restriction on the qualifying conditions for CBD under Senate Bill 130. It also allows businesses and pharmacies to sell CBD legally if it is properly labeled and tested. Under the scheme created by the proposition, CBD could only be sold in a dispensary and patients would be limited to 10 grams (26-60b-502).

We’ll Open the Door, Eventually

26-60b-501 requires a dispensary to be accessible only by an individual with a medical cannabis card or a valid cannabis dispensary agent. The dispensary is allowed only one public entrance. Because of these restrictions, the exterior public entrance door must always be locked (secured). Patients wishing to enter the dispensary would be required to wait outside until the dispensary is able to verify the validity of the patient card. There is no provision or rulemaking authority authorizing a lobby in a dispensary where patients may wait while their card is validated. Voters should imagine cancer patients, Lou Gehrig’s Disease patients and others waiting outside during our winter months or our warm summer months until the dispensary is able to comply.

Affirmative Defense

Under the provisions of the proposition (58-37-3.7) and before July 1, 2020, it is an affirmative defense both for residents and nonresidents to use, have possession of, grow and manufacture marijuana and drug paraphernalia. Medical cannabis may be lawfully grown immediately within a person’s residence or within 300 feet of the residence, depending on local zoning ordinances.

Seed-To-Sale System

In two sections of the Proposition, 4-41b-103 and 26-60b-103, the proposition requires two types of software, an inventory control system(s) and an electronic verification system. In many states with sanctioned marijuana, these two systems are combined and are referred to as a “seed to sale” tracking system. The initiative has a few requirements with these systems that are unique. First, the inventory control system requires storage of video records for 45 days. Second, it gives rulemaking authority to the Utah Department of Health to establish compatibility standards for the inventory control system(s).

The proposition requires Utah’s Department of Agriculture and Food, Department of Health, Department of Public Safety and the Department of Technology to contract with a third-party provider to “develop and maintain” an electronic verification system. These departments must “enter into a memorandum of understanding in order to determine the function and operation of [the] electronic verification system.” The system must allow a patient to apply for a medical marijuana card at the physician’s office. Through the system, a doctor must be allowed to recommend marijuana as the treatment for a patient and must connect with all the various inventory control systems used by the various dispensaries, laboratories, processing facilities, and cultivation facilities. The system must be able to track, in real time, purchase history of each patient and store that data for no more than 60 days. Each of the departments included in the memorandum of understanding must be given access to the electronic verification system as well as state and local law enforcement. The system must keep a record of each time a state regulator or member of law enforcement accesses the database. And lastly, the system must be operational no later than March 1, 2020.

The proposition’s drafters appear uneasy with giving much rulemaking authority to state regulators and as such did not give the state authority to require dispensaries and production establishments to use the same inventory control system. Instead, whichever third-party vendor the state selects for the electronic verification system will be required to integrate with potentially dozens of inventory control systems. The electronic verification system will be required to integrate with systems currently used by the state’s Department of Agriculture and Food, Department of Health, Department of Public Safety and the Department of Technology as well as law enforcement throughout the state.

Each integration point means likely delays, increased costs and potential points of failure. And one does not need to look too hard to find this happening in our sister states. Washington’s vendor wasn’t ready to launch on November 1, 2017, as necessary. Of the multiple integrations the system required, only four were completed by January 2018. The state delayed the rollout until February 1, 2018, with laboratories not added to the system until March 2, 2018. The problems didn’t stop there.

In June 2018, the system had errors tied to tax reporting and regulatory compliance. The system began recording incorrect sales data, prompting one dispensary owner to say he was unaware of a single retailer who had correct information in the system. Then, the state sent marijuana establishment owners a notice saying they had to reset an important security feature because the system was compromised in a hack.

You can read about Washington’s multiple problems here:

https://mjbizdaily.com/washington-states-delayed-marijuana…/

https://mjbizdaily.com/mj-freeway-cannabis-software-system…/

https://lcb.wa.gov/…/t…/Job%20Aid–API%20Key%20Retrieval.pdf

When Pennsylvania issued its request for bid, seven companies responded. Five of the respondents were immediately disqualified as “non-responsible,” meaning, the state only had two vendors to choose from. The two remaining companies, BioTrackTHC and MJ Freeway, submitted bids. MJ Freeway, the company used in Washington, won the bid at $10.4 million. MJ Freeway has had frequent outages and has been hacked on multiple occasions. (https://www.thecannabist.co/…/marijuana-cyber-attack…/70948/ and https://www.potnetwork.com/…/mj-freeway-breakdowns-and-futu…). After only 18 months, Nevada decided to end its relationship with the company.

It is possible that Utah, like Pennsylvania, finds itself having only a very small number of respondent companies qualified to create the systems required in the proposition. And with such tight deadlines, the cost of the system will likely skyrocket. Voters should consider whether there is any reason to believe Utah’s system will be any less expensive than the system in Pennsylvania. They should also ask themselves what the likelihood is of having a functional, secure and integrated solution by the proposition’s March 1, 2020 deadline.

One should also ask whether the systems are able to adequately regulate marijuana as is intended. Richard Wilkinson, a 38-year-old licensed cannabis processor in Oregon, was arrested late last year when the U-Haul he was driving through Nebraska was stopped by law enforcement. Inside, police recovered 110 pounds of cannabis flower, 25 pounds of cannabis extracts, 3,500 cannabis seeds and because there were so many, law enforcement at the time didn’t release the number of vials of hash oil.

On August 6, 2018, “An Initial Assessment of Cannabis Production, Distribution, and Consumption in Oregon 2018 – An Insight Report,” was released. You can read it here: (https://static1.squarespace.com/…/An+Initial+Assessment+of+…). The report was produced by a committee of city, state and federal agencies. The report says that between July 2015 and January 2018, 14,550 pounds of Oregon cannabis, legally grown under the state’s system, and worth $48 million, was seized en route to 37 other states.

Oregon’s marijuana program is strictly regulated by rules promulgated by the state’s Liquor Control Commission, including a “seed-to-sale,” tracking system like that required in Proposition 2. If those systems are effective tools in regulating cannabis, why then are they not able to discover $48 million in illegal exports or the marijuana being smuggled by Mr. Wilkinson? These systems claim to track marijuana to the gram yet are seemingly incapable of tracking millions in unauthorized transactions.

The requirement of a seed-to-sale system only increases the costs to medical marijuana producers, processors, retailers and patients. It delays the implementation of a state-sanctioned framework and puts patient data at-risk. Further, when you artificially increase the cost, you are inadvertently subsidizing black-market marijuana, which doesn’t have those costs. It also, unfortunately, gives talking points to prohibitionists, who believe legalization won’t work.

A Football Field Away

The proposition limits where a cannabis production facility and dispensary may operate. In 4-41b-201, a cannabis production facility may not be within 600 feet of a community location or within 300 feet of an area that is exclusively zoned for residential use. Likewise, 26-60b-301 states a dispensary may not be within 600 feet of a community location or within 300 feet of an area that is exclusively zoned for residential use.

Many rural parts of our state don’t have zoning ordinances that would expressly zone an area for residential use. And that doesn’t address many areas in Utah that are zoned as mixed use. Normally, you’d not have to worry about this, but the language of the petition greatly limits (and often completely prohibits) a municipality or county from enacting its own zoning regulations for medical cannabis establishments.

The proposition would allow medical cannabis production facilities and dispensaries to operate the length of a football field away from residential areas. The distances hold true for the proposition’s “grow your own” provisions, which will be discussed later.

The only requirements for cultivators are that the cannabis may not be visible from the facility’s perimeter. There is no requirement that the cannabis be grown indoors or that if the cannabis is grown indoors that filtration systems be used to limit the smell. Cannabis is a very aromatic plant. If you’ve ever smelled it, you don’t forget the pungent smell. Imagine, for a moment, what potentially hundreds of plants grown outdoors within a neighborhood or indoors without exhaust filtration, does to a community. And while the proposition doesn’t give rulemaking authority to the state to implement any changes, even at the 300-foot restriction for a dispensary or production facility, how strong do you believe the smell will be for hundreds of marijuana plants?

An Issue of Money

In order to qualify for a license for a cannabis cultivation, the applicant must demonstrate they have at least $500,000 in liquid assets available for each facility. A processing facility is required to demonstrate at least $100,000 in liquid assets. A testing laboratory also is required to demonstrate $100,000. There is no requirement for a dispensary to have any cash assets, at all. Voters should consider why those responsible for the proposition’s drafting felt it was necessary for every other type of marijuana establishment to show the financial wherewithal to perform but not a dispensary. They should also wonder why a laboratory would be required to have $100,000 liquid cash assets.

Laboratories

The only requirement for a laboratory is that they’re in possession of $100,000 liquid cash assets, that they have no ownership interest in a cultivation facility, a production facility or a dispensary. There is no requirement for the laboratory to have a science officer. Nevada, as an example, requires a laboratory to have a science officer overseeing the testing of the products. That person must have a doctorate in a related science and two years of laboratory experience, or a master’s degree in a relevant science with four years of laboratory experience or a bachelor’s degree in a relevant science with six years of laboratory experience. Proposition 2 is silent on the academic qualifications for a laboratory license. It also fails to give rulemaking authority to any state agency or department to enact such standards.

Utah’s Department of Health establishes and enforces standards for the certification of environmental laboratories across the state. Those wishing to become licensed must submit an application, participate in proficiency testing programs and meet state laboratory standards. State certification officers must conduct an on-site survey of the laboratory to assess compliance with state standards. It’s a rigorous process that doesn’t apply to the proposition’s scheme. There are no accreditation requirements for the laboratories operating under the proposition’s language and no existing licensed laboratories are qualified to participate.

A laboratory is required to test for tetrahydrocannabinol (THC) and cannabidiol (CBD) in the cannabis product. It’s also required to test for the “presence of contaminants, including mold, fungus, pesticides, microbial contaminants, [and] foreign material.” There is no requirement for the testing laboratory to test for allergens, like a full A2LA ISO scope, or to test for ingredient authenticity, including PCR, ELISA and HRMA. The accuracy of labeling is required to be within 15 percent of the indicated amount, by weight. That standard does not follow established guidelines from the U.S. Food and Drug Administration.

The only applicable rulemaking authority with laboratories is that the state may determine the amount of THC, CBD or contaminants that are safe for human consumption. They lack any other authority to regulate cannabis testing laboratories. Voters should ask why there are no standards or certifications required for a testing laboratory. They should ask if this potentially puts patients at risk, patients who already have diminished immune systems. This is especially important as California found, in July 2018, that 20 percent of marijuana samples are failing testing standards (you can read about it here: https://www.mercurynews.com/…/first-tests-are-in-and-one-i…/).

Also, marijuana that is “homegrown” has no testing requirements.

Doctors May Not Participate

While a medical doctor may recommend medical cannabis for a patient, they are expressly prohibited from taking part in almost all other aspects of the proposition. 4-41b-301 expressly prohibits a doctor from serving as a cannabis production establishment agent. Voters should ask why medical doctors, specifically, doctors with a degree in pharmacology, are prohibited from participating in the formulation of products for the treatment of the proposition’s approved condition list. Wouldn’t physicians who study drug action and the physiological effects on cells, tissue, organs, and organisms be exactly who should be working on products for Utahns?

Application Fees

The proposition, in 4-41b-201, requires the state to charge an application fee that is necessary to cover the costs to implement the medical cannabis program. The Governor’s Office of Management and Budget estimated the cost to implement the law proposed by the proposition at $2,900,000. Utah’s Department of Agriculture and Food suggests their portion of the application fee could be over $100,000 per application. Neither of those costs include the proposed software expenses, which could reach over $10 million. If the application fee must cover the state’s costs, it is likely an application for a license (with no guarantee of being awarded a license) could exceed $250,000. Ultimately, those costs will be added to the price of medical cannabis products sold in the proposition’s dispensaries.

Violations of First Amendment Rights

4-41b-403 restricts a cannabis production establishment from advertising to the public in any medium. 26-60b-107 prohibits a physician from advertising except for a website that displays a green cross, the location and hours of operation for their office, a qualifying illness and a single scientific study on cannabis use. 26-60b-504 restricts a dispensary to have only a website that has their location and hours, products and services, personnel, and educational material. A dispensary, production facility, and physician, therefore, are prohibited from using social media. These provisions are likely violations of the First Amendment. The Supreme Court has issued multiple rulings on restrictions of commercial speech, none of which bode well for the state in having to defend these unconstitutional restrictions. Voters should consider their own views of the First Amendment and restrictions on free speech as they consider the impact of the proposition.

Background Checks and Ages

In 4-41b-401, a cannabis production establishment may not employ anyone younger than 21 years of age. In 26-60b-301, a cannabis dispensary may not employ anyone younger than 21 years of age. Both a production establishment and dispensary are required to conduct their own background checks into the criminal background of employees. Only a felony restricts a person from working at either establishment. There is no distinction between violent and nonviolent felony convictions and is a departure from what most other states require. For example, Nevada’s list of excluded offenses includes any crime of violence or a violation of a state or federal law pertaining to controlled substances, or if they’re not complying with court-ordered child support.

A caregiver, however, must be at least 18 years of age and has his or her background conducted by the Utah Bureau of Criminal Identification. And a caregiver may be a felon.
Voters should also ask why background checks for dispensaries and production facilities are being conducted on their own and not by BCI like background checks for caregivers.

A Very Small Market with a Very High Price

Utah will likely have a very small medical cannabis market. As of February 9, 2018, Arkansas has only 3,883 patients. The state’s population closely mirrors Utah’s. Connecticut, a state with also about the same population, has 23,960 patients. However, Connecticut’s client condition list is much broader than that in the petition. For example, Utah’s proposition inexplicably leaves off glaucoma, one of the conditions that responds best to cannabis and is, perhaps, the most studied of all applications.

Utah is the youngest state in the nation. Because of this, we see far fewer incidents of the age-related conditions in the proposition.

According to the Centers for Disease Control, Utah has the lowest overall rate of cancer in the United States. For example, in 2018, Utah will only have an estimated 1,720 new cases of breast cancer. Arkansas will have 2,160. Utah will likely have 1,250 incidents of prostate cancer, which is approximately the same as Arkansas. Arkansas, however, will have 2,720 cases of lung and bronchus cancer, compared to Utah’s 900. Utah has only about 2,702 people living with HIV. Arkansas has 5,308. This trend continues with all of the other qualifying illnesses. Utah is among the lowest in the nation for incidents of Alzheimer’s disease. It is in the region with the lowest incidents of amyotrophic lateral sclerosis (Lou Gehrig’s Disease).

What’s more, Arkansas has even broader conditions than Connecticut. Their list includes Hepatitis C, Fibromyalgia, nausea, arthritis and Tourette’s syndrome, conditions with aren’t included on Utah’s list.

Because of this, voters should recognize that Utah will likely have a very small market. And any part of the petition that increases costs will have a limited number of patients whose retail sales will reimburse medical marijuana establishments. A recent survey of patients found the average customer spends between $50 to $150 per month for cannabis products (https://www.statista.com/…/medical-marijuana-user-monthly-…/). That means the likely annual retail market could be as low as $2,100,000 to a high of $6,300,000. Consider for a moment the state anticipates the cost to implement the program will be $1,800,000 a year in ongoing costs.

Voters should consider whether the scheme created by the petition is the most cost-effective infrastructure available to protect patients who are likely already facing the high cost of medical care for their qualifying illnesses.

Delays, Delays, Delays

Assuming voters pass the proposition in November, the state is immediately faced with aggressive timelines. The Department of Agriculture and Food has already stated that it does not believe it will likely be able to comply with the proposition’s timelines. Even then, patients looking for immediate relief from state-sanctioned cannabis tested and produced in the state should be prepared to wait. Perhaps a while. The state won’t begin accepting applications for a production establishment until January 1, 2020 (4-41b-201). The state is given only 15 days to review applications. We’ve already discussed the tight deadline on software, which is required to be operational no later than March 1, 2020, but is required to integrate with inventory control systems that won’t be selected until after that deadline. Beginning March 1, 2020, the state has 15 days to issue a patient card. Which is interesting, as no legal medical cannabis will be available at that time. The state has 90 days to respond to cannabis dispensary license applications. They must begin accepting dispensary license applications no later than March 1, 2020. The state may not issue more than 15 licenses for cultivation facilities.

Once a cultivation facility, as an example, is licensed, the agents will begin to build out a facility to grow marijuana. Voters should consider how long they believe it will take to set up a facility that can grow potentially hundreds of plants, acquire the necessary building permits, have the plans reviewed, inspections completed and begin growing, harvesting and curing. It is likely that an applicant awarded a license in January 2020 will not have product available until summer of 2021. We can look at other states as an example.

Grow Your Own With the Help of an 18-year-old

If, after January 1, 2021, there is not a dispensary within 100 miles of a patient’s primary residence, the patient or their caregiver, is allowed to grow up to 6 plants, in an enclosed and locked space, not within view of the public and not within 300 feet of an area zoned exclusively for residential use. Since this part will likely apply mostly to rural areas of the state, that means that most people in rural areas of the state will be allowed to grow cannabis in their home due to local zoning ordinances. And a political subdivision isn’t able to change zoning to respond to medical cannabis, regardless.

According to 26-60b-202, caregivers can be felons. They only need to be 18. They’re allowed to grow marijuana for patients with no qualifications to do so. The marijuana they grow does not need to be tested in a laboratory. There is no inventory control system or electronic verification system. There is no requirement to register with the state the location of where the marijuana is to be grown. There is no requirement for exhaust filtration. There is no limit on the number of plants at a specific location. There is no limit to how many patients a caregiver may assist in growing plants.

One of the biggest problems with this section is that the caregiver card is valid for no longer than six months. From the time you plant a seed until the plant is ready to harvest varies greatly by strain. There are strains that grow quickly but produce only a few grams of harvest. With the limit on the number of plants, this isn’t likely a viable solution for patients. The average time it takes to grow marijuana from seed is between 4-7 months. Once harvested, it takes a minimum of an additional two weeks for the marijuana bud to “cure.” It is possible for a caregiver’s license to expire before the plants they’re growing on behalf of a patient are ready to be harvested.

Another difficulty is that a caregiver is not allowed to be paid to act as the caregiver. How else, other than potentially, and illegally, supplying a caregiver with marijuana, is a patient expected to find a qualified caregiver with the knowledge of how to grow marijuana that will likely result in any therapeutic effect for the patient? Marijuana is a plant that requires both dark and light photosynthesis. Perhaps the residents of Roosevelt, Utah have the experience we’re not aware of.

Which brings up another concern. A patient who is given a recommendation and is required to grow their own marijuana is likely going to have to wait upwards of seven months before they have any product to consume. How is that helpful to a patient undergoing chemotherapy treatment or who suffers from chronic pain? If a patient is unable to find a qualified caregiver, do the proponents of the proposition believe many people suffering from Lou Gehrig’s Disease will be able to set up their own grow and adequately tend to it? Or will patients have access to the equipment and the financial resources to set up their own grow, particularly if it can’t be in their own home?

Some Patients Risk Everything

An amendment to the federal budget by Rep. Dana Rohrabacher restricts the Department of Justice from expending any money for the prosecution of anyone participating in a state-sanctioned medical marijuana program. However, these protections do not apply to the federal government’s immigration laws. Immigration officials are asking noncitizens if they have ever used marijuana. If a noncitizen admits to an immigration official that he or she has ever possessed marijuana, the person will likely face very serious immigration problems. That it is permitted under state law is not a defense. It can also make a lawful permanent resident deportable. You can read more about this from the Immigrant Legal Resource Center here: https://www.ilrc.org/…/marijuana_advisory_jan_2018_final.pdf.

There’s an alternative

In 2018, Utah passed HB 197, which requires the state to begin growing medical cannabis by January 1, 2019. It opens the state’s first dispensary by July 1, 2019. If the proposition fails, the program goes into effect. The only remaining thing for the state to do is pass the qualified patient list. The state already has the authority to create state-sanctioned cannabis pharmacies. That program will get medical cannabis to patients faster, with lower costs, fewer delays and none of the problems of the proposition.

Like I said earlier, these are but a very few of the many problems with the proposition’s drafting. I’ll write more later.

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