On Thursday, a New Hampshire commission tasked with drafting legislation for legalizing marijuana through state-owned stores heard a representative from the office of the attorney general of the state who discussed some of the unique considerations of law that may arise as a result of the state-run model.
Myles Matteson is a senior assistant to the attorney general and heads the criminal justice bureau at the office. He told the commission that, while no state’s cannabis regulation regime is free of liability, New Hampshire could face additional scrutiny, including criminal prosecutions by the federal government as well as civil lawsuits.
Matteson stated that “the uniqueness of a particular regime or structure could attract some of these liabilities.”
The attorney general’s office does not know the probability or extent to which these liabilities will occur, but he did add that “any system controlled or managed by a state creates liabilities.” It’s a fact.
Matteson was one of 19 state Commission Members to Study State-Controlled Sale of Cannabis and Cannabis Products for the Purposes of Proposing Legislation. This commission was established by legislation in August. The panel is responsible for examining the possible effects of cannabis legalization on New Hampshire, and recommending legislation by December 1, 2018. The bill would be taken up by lawmakers in the 2024 session.
Last month, members of the panel began to examine an alternative franchise-style model. Under this model, stores would be privately-owned but under the supervision of the state government. Officials have compared the model with McDonald’s and Dunkin Donuts.
The novel regulatory model, which appears to strike a balance between state control of the economy and the private sector, raises many unanswered questions.
Rep. Jared Sullivan, a member of the panel (D), asked how a franchise would comply with federal law given that franchises were federally regulated. Matteson acknowledged he did not know the answer, but that there could be conflict issues between state and federal law.
Sullivan said, “If franchises were regulated by the federal government, I could see a potential conflict we hadn’t considered in this committee. I think we should dig deeper into that.”
Panelists also asked how to prevent state revenue being taken by federal law enforcement in the event that New Hampshire is prosecuted by the U.S. Department of Justice or if someone sues. Matteson stated that although there are ways to reduce the state’s risk, the plan still involves some risk.
Next Tuesday, October 24th, the commission will revisit this proposal. Panelists will then be taking public comments.
During the second part of the hearing on Thursday, the commission heard testimony from representatives of medical marijuana dispensaries in existence, also known as alternative treatment centres (ATCs) in the state. They raised issues such as the structure of these businesses and how the state will eventually integrate ATCs in an adult-use marketplace.
Matt Simon, director of public relations and government affairs at medical marijuana provider GraniteLeaf Cannabis spoke at length to the commission about the ATCs concerns. He said that, in general, the medical marijuana dispensaries of the state are ready to adopt a franchise-based model.
Simon, who believes that the commission will eventually proceed with the franchising model in an interview with Marijuana Moment less than one month and a quarter before the draft legislation is due.
He said, “My impression is that the Commission views the franchise model a possible compromise and that all work will be focused on fine-tuning this model.” “It was an productive discussion today and we look forward continuing it at future meeting.”
Simon raised concerns about the current state requirement that ATCs be organized as non-profit businesses. Dispensaries claim this increases the compliance burdens for patients and their costs.
He told Marijuana Moment via email that “the for-profit conversion” language doesn’t seem to be controversial. The provision was included in earlier versions of the bill as well as a draft that is currently being circulated. “I hope that we are done with the debate about this once and for all, and that there is an understanding that ATCs can transition.”
Simon also raised the question of who is responsible for the design and layout of adult-use marijuana stores that are based in medical marijuana dispensaries. According to the draft being discussed, the state regulators will control the branding, layout, and design of all adult-use shops. However, ATCs which are privately owned, worry this restriction could undermine their ability differentiate themselves from other competitors.
(Disclosure – Simon supports Marijuana Moment via a Patreon monthly pledge.
The commission’s chairman, Sen. Daryl Abbas, has repeatedly mentioned draft legislation during meetings of the panel, but he hasn’t made it public. Abbas promised to send the draft legislation to the other members of the commission and licensed medical marijuana companies at the group’s most recent meeting. However, his office did not respond to Marijuana Moment after the two last commission meetings.
A recommended bill is just the beginning. The next step is for lawmakers to work out the details in the upcoming legislative session and pass the measure.
Simon thinks that the legislative body will be able to handle the job.
He said that there was a great deal of demand in New Hampshire for legalization. “Lawmakers are trying to find a solution,” he added. “If it is possible to do this and meet the Governor’s standards then I believe the House and Senate will be open to this.”
He continued, “They will have many questions about the specifics.” “We will have to deal that through the legislative processes in 2024.”
According to a survey, some New Hampshire growers aren’t too keen on the state model. In a New Hampshire Cannabis Association survey of 69 farmers, 87 percent supported legalization and 78 percent expressed an interest in marijuana cultivation. Only 11 percent of respondents said they would be in favor of a state-run system, while 63 percent were against it and 26 percent were undecided.
The commission is also studying the feasibility and support of a state-run marijuana model. Chris Sununu, the commission was given the specific task of looking at the possible drafting of legislation that:
- Permits the state control distribution and access
- Keep marijuana out of the schools and away from children
- Controls the marketing of marijuana
- Prohibit “marijuana Miles” or oversaturation in marijuana retail establishments
- Municipalities can choose whether to restrict or prohibit marijuana retail establishments
- Multi-drug abuse is reduced
- Has no additional tax to stay competitive
John Hunt, the chairman of the House Commerce and Consumer Affairs Committee (R), and a member on the commission, have worked on marijuana reform issues extensively this year and tried to reach a consensus on legislation that would enact legalization via a multi-tiered approach, which includes state-controlled shops and dual licensing for medical cannabis dispensaries already in place, as well as businesses licensed privately to individuals by agencies within state.
was unable to reach a consensus on the complicated legislation after Sununu announced that he supported state-run legalization. The Senate , however, defeated HB 639 despite the bipartisan support.
The legalization study provisions in the underlying legislation of the commission that was signed into law by the governor would also remove the requirement that patients with pain first try opioid-based treatment before they receive a recommendation for medical cannabis.
The law also clarifies that it is not intended for the state to allow the sale of intoxicating hemp-derived products such as delta-8THC.
In May, a separate marijuana legalization bill that was proposed in conjunction with a Medicaid expansion measure was defeated by the House.
The Senate also moved to introduce another piece of legislation in the same month, which would have allowed designated caregivers and patients to grow up to 12 seedlings, 3 immature plants, and three mature plants for their own therapeutic use.
After rejecting reform bills in 2022 by the Senate, the House added legalization language to separate criminal justice legislation–but this was also rejected in the opposing chamber .
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The article Uniqueness of New Hampshire’s proposed state-run marijuana stores could create federal liability, AG’s office says first appeared on Marijuana moment.
