On May 20, 2019, the West Virginia Legislature passed Senate Bill 1037 (“SB 1037”) to streamline and encourage West Virginia’s nascent medical marijuana market. The bill passed the Senate 23-7 and the House 81-17 during a special session. This comes two years after Governor Justice signed West Virginia’s medical cannabis bill, Senate Bill 386, making West Virginia the 29th state to legalize medical marijuana. The medical marijuana program was expected to ramp up in July 2019, but like similar programs in other states, has been beset by delays
SB 1037 makes a variety of changes to West Virginia’s medical marijuana market. It eliminates operational restrictions and allows growers, processors, and dispensaries to function under one umbrella, i.e. it allows for vertical integration. It clarifies several open questions regarding physicians, removing the requirement that a physician must be present in a dispensary at all times and removing language mandating that physicians first consider non-cannabis treatments such as opioids before issuing a certification to a patient. Other changes include:
- Mandating that licenses can only be awarded to an entity if West Virginia residents hold a majority interest in that entity.
- Increasing the number of dispensaries to 100, up from 30.
- Allowing one person to hold up to 10 individual dispensary permits, up from two.
- Imposing a 10 percent tax on gross sales receipts for dispensaries.
- Permitting private labs to test product.
Governor Justice had vetoed a previous version of the bill because it taxed non-vertically integrated entities at 10% of gross sales while taxing vertically integrated entities at only 5%. SB 1037 resolves that issue, and we anticipate Governor Justice will now sign it.
The passing of SB 1037 is another step in West Virginia’s effort to create a pro-cannabis environment. While the medical cannabis program is still expected to take effect on July 1, 2019, certain parts of the program will not begin until the following year. For further discussion surrounding the medical cannabis program, please refer to the state’s website here.
We will continue to monitor the implementation of the program as the state begins to roll out key aspects, including the issuance of business permits.
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