Apr 9, 2019

Georgia Legislature Passes Hemp Farming and Medical Marijuana Bills

Hemp Farming

Last week, the Georgia legislature passed the Georgia Hemp Farming Act (HB 213), under which farmers may obtain licenses to grow and process hemp. The definition of “hemp” includes any part of the cannabis sativa L. plant and all derivatives, with no more than a 0.3% concentration of THC. Under the federal 2014 Farm Bill, higher education institutions and state agricultural departments were authorized to develop pilot programs and cultivate industrial hemp for research purposes. Georgia was not one of the forty one states that created an industrial hemp program following the passage of the 2014 Farm Bill. The federal 2018 Farm Bill removed hemp from the definition of “marijuana” and excluded THC in hemp from scheduling under the Controlled Substances Act. It also allowed states to develop their own programs for licensing and regulating hemp, and required USDA to develop a federal program.

Under Georgia’s hemp licensing program, the state Department of Agriculture will issue hemp grower licenses and hemp processer permits. Hemp grower licenses will be issued for one calendar year at an annual license fee of $50 per acre cultivated, with a maximum license fee of $5,000. Any person applying to be licensed as a hemp grower must be a qualified agricultural producer and submit, among other things, written consent for representatives of the Department of Agriculture and law enforcement to enter onto the licensed property for inspection and a criminal background check. To become permitted as a hemp processor, an applicant must pay an initial annual permit fee of $25,000 which is reduced to $10,000 for every subsequent year. In addition to what is required of a hemp grower applicant, a hemp processing applicant must also submit a surety bond in the amount of $100,000. Hemp processing permitees must have written agreements with each hemp growing licensee with which they do business, and must provide a copy of each such agreement to the Department of Agriculture within 10 days of execution. The Department of Agriculture or its contractor has the right to randomly test hemp at the fields of licensees or at the facilities of permitees, and to destroy any hemp with a THC concentration exceeding 0.3%.

The Georgia legislature also passed Georgia’s Hope Act (HB 324), which allows for the production, manufacturing, and dispensing of low THC oil (under 5% concentration) with a valid state-issued license. Sixty dispensaries will be approved by a state oversight board (the “Georgia Access to Medical Cannabis Commission”) to be comprised of seven members. The Commission is charged with reviewing and approving production licenses and retail dispensing licenses, and developing rules and regulations governing such licensees. Specialty dispensing licenses for pharmacies will be issued and regulated by the State Board of Pharmacy.

The Commission will issue up to two Class 1 production licenses, which will authorize licensees to grow cannabis in indoor facilities limited to 100,000 square feet of cultivation space, and up to four Class 2 production licenses, which will authorize licensees to grow cannabis in indoor facilities limited to 50,000 square feet of cultivation space. An applicant for a Class 1 production license must demonstrate that it holds at least $2 million in available cash reserves, and an applicant for a Class 2 license must demonstrate at least $1.25 million in available cash reserves. Applicants for production licenses are required to submit, among other things, a proposed production plan, comprehensive security plan, detailed employment plan, designs of all production facilities, letters of support from local governmental entities where the primary facilities will be located, a demonstration of significant involvement in the business by one or more minority business entities, documentation of the applicant’s industry capabilities and management experience, documentation showing a cash bond payable to the State of Georgia or an irrevocable line of credit, and fingerprints for a criminal background check. The application fee is $250,000 for Class 1 licenses and $100,000 for Class 2 licenses. Licenses will be revoked if the licensee is not operational within 12 months of the award date.

Prior to the passage of Georgia’s Hope Act, Georgia’s medical marijuana program allowed registered patients with any of 16 covered conditions including severe seizures, cancer, peripheral neuropathy and multiple sclerosis, to obtain a “Low THC Oil Registry Card” to use medical marijuana oils, but there was no legal way to grow or obtain medical marijuana within the state. Both the Georgia Hemp Farming Act and Georgia’s Hope Act are currently pending Governor Kemp’s signature to be signed into law.

For more information, contact Steve O’Day or Vickie Rusek.