Deadline Looms to Apply for Rhode Island's New Cannabis Cultivators License

Effective January 1, 2017, neither medical marijuana patients, nor their licensed caregivers, nor cooperative cannabis cultivations will be allowed to sell excess medical cannabis to dispensaries, known as Compassion Centers. Only licensed cultivators, a newly created category of legal cannabis growers, will be permitted to cultivate and sell medical marijuana to dispensaries. Both those presently participating in Rhode Island's medical cannabis industry, and those seeking to enter the marketplace, will have to meet the regulatory requirements of Rhode Island's Department of Business Regulation (DBR) to obtain licensed cultivator status.

The DBR recently released Emergency Regulation 1- Licensed Cultivators, along with a lengthy and laborious Application for Medical Marijuana Cultivator License. The regulations lay the groundwork for a complex regulatory scheme for would-be wholesale cannabis growers involving, among other things, mandatory participation in the State's to-be-established seed-to-sale tracking system, limitations on pesticides and various grow mediums, as well as rigorous product packaging and security requirements for cultivation facilities.

With these onerous standards, however, comes substantial opportunity for cannabis entrepreneurs. For one, cultivators will be permitted to operate as for-profit enterprises, by definition making them more lucrative than state-sanctioned dispensaries, which will continue to operate under nonprofit models. Additionally, whereas cooperative growers historically participating in the Rhode Island marketplace were capped at 48 flowering plants in any one grow cycle, the new regulations allow licensed cultivators to grow upwards of 500 flowering plants and 500 seedlings at any given time. And this limitation only applies until the State implements its seed-to-sale tacking system, after which time cultivators will, at least theoretically, be unrestrained in the quantity of plants that they may grow.

With all the benefits of obtaining a cultivator's license, interested parties should expect a highly competitive application process. This is especially true given that the DBR is accepting applications on a rolling basis - but only until April 30, 2017 - after which time the application period closes until January of 2018 with no guaranty that the DBR will issue additional licenses in subsequent years. At over 40 pages in length, an application will demand the submission of standard operating procedures for virtually every aspect of cultivator operations, and require strict substantive compliance with both Rhode Island's General Laws and the DBR's regulations. With the application deadline looming, those interested in submitting an application are wise to act quickly and with the assistance of legal counsel to best ensure a complete and professional application submission, or run the risk of falling short of due consideration from the DBR.

If you are interested in learning more about the cannabis industry or need assistance in reviewing the new law or completing the cultivators license application, please contact business attorney Benjamin L. Rackliffe, who is highly experienced in cannabis industry law, at 401-824-5100 or email brackliffe@pldolaw.com. We welcome your comments, questions and suggestions.

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