Mississippi Weed Laws

Mississippi Weed Laws

After Governor Reeves signed the recent legislation, the Mississippi Department of Revenue (MDOR) has 150 days to start the licensing process for cannabis businesses.

On February 2, 2022, the bill was signed into law. MDOR is currently collaborating with the Mississippi Department of Health (MDOH) on the application process’ design and implementation. The ABC Permit Department will begin taking license applications no later than July 1, 2022, and will grant dispensary licenses to qualifying applicants within 30 days of receiving the completed application, which must include all relevant information and documentation. Counties and/or municipalities have 90 days to start voting to opt out of the program.

If a business wants to apply for medical cannabis dispensary licensure through the Mississippi Department of Revenue’s Mississippi Medical Cannabis Program, the company should first register with the Mississippi Secretary of State’s Office.

Types of Mississippi Cannabis Establishment Licenses

According to the Mississippi Medical Cannabis Act (SB 2095), there would be nine types of permits, namely:

  • Patient’s cards
  • Medical Practitioners
  • Cannabis Cultivation Facilities
  • Cannabis Processing Facilities
  • Cannabis Testing Facilities
  • Cannabis Waste Disposal Entities
  • Cannabis Transportation Entities

Mississippi Cannabis Licensing

The Mississippi Department of Revenue is in charge of medical cannabis licensure, regulation, and enforcement. The Mississippi Department of Revenue’s Alcoholic Beverage Control Enforcement Division will be the point of contact for licensing and regulating dispensaries. It will also be in charge of policing medical cannabis rules regarding the purchase, sale, and distribution of medical cannabis at dispensaries.

The Mississippi Department of Health will be in charge of overseeing the medicinal cannabis program and will be in charge of licensing, regulating, and enforcing licensing rules.

Eligible Applicants

  • Individuals at least twenty-one (21) years of age
  • Any owner, board member, officer, or anyone with an economic interest in the entity must be over the age of twenty-one (21) years of age
  • Not currently serving as a member of the Mississippi Senate or House of Representatives or spouse of a member of the Mississippi Senate or House of Representatives through December 31, 2022
  • Has not previously held a Cannabis related license that has been revoked
  • Has no outstanding tax liabilities owed to the State of Mississippi
  • Has never been convicted of a disqualifying felony as defined by the Mississippi Medical Cannabis Act

General Cannabis Dispensary License Information

The Mississippi Medical Cannabis Act defines the medical cannabis dispensary as an entity licensed and registered with the MDOR that acquires, possesses, stores, transfers, sells supplies, or dispenses medical cannabis, equipment used for medical cannabis, or related supplies and educational materials to cardholders. A dispensary can only be in an area zoned commercial or in an area that is not otherwise prohibited from having commercial businesses.

Permit Fees:

  • First Year: $40,000
    • Non-Refundable Application Fee: $15,000
    • Annual License Fee: $25,000
  • Yearly Renewal: $25,000

RELATED POST: Mississippi cannabis cultivator license

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Requirements for Dispensary Permit:

  • Legal Name of Business and Physical Address
  • Proof that main entrance of proposed location is not within 1,000 feet of the property boundary line of any school, church, or daycare (Distance Waiver form required if within 1,000 feet)
  • No medical cannabis dispensary may be located within a 1,500 feet radius from the main point of entry of the dispensary to the main point of entry of another medical cannabis dispensary
  • Proof that location meets county or city zoning / sworn statement certifying proposed location is compliant with said restrictions
  • Proof of local license registration if required by city or county in which proposed premises is located
  • List of all owners, partners, members, officers, board members and anyone with an economic interest
  • List of all professional licenses held by each member and proof that each are in good standing
  • Summary Financial Statements for anyone with an economic interest of 10% or greater stake in the business
  • Acknowledgement of Waiver and Authorization to Release Information
  • Residence & Occupational History Form for each applicant
  • Diagram of licensed premises
  • Operations plan
  • Security plan

Number of Licenses

So far, no license cap has been established. However, municipalities can choose to opt out of the program.

Cannabis Taxes

There will be two taxes associated with the sale of medical cannabis. Applicants will be required to obtain applicable tax permits as part of the application process.

  • Licensed cultivators will charge a 5% excise tax to licensed dispensaries at the time dispensaries purchase medical cannabis from the cultivator.
    • Excise tax is due if the cultivator sells to a processing facility.
    • Excise tax is due on the transfer of cannabis between related entities.
  • Licensed dispensaries will charge the standard 7% sales tax to patients at the point of sale. Dispensaries will also be responsible for special tax levies in the city of Jackson & Tupelo.

For more information regarding Sales Tax, you can read more here.

Applicable Income tax or Withholding tax may be due for other establishments under this program including those licensed by the Mississippi Department of Health.

All taxes collected must be remitted to the Mississippi Department of Revenue. Upon availability, you may register for a tax account at www.tap.dor.ms.gov.

Work Permits

Every potential employee of a medical cannabis facility must apply for, and be issued, a work permit prior to beginning work. This permit will be issued to the individual, not the facility, and does not have to be transferred should the individual change facilities. To be eligible to receive a permit:

  • must be over the age of twenty-one (21);
  • cannot have a disqualifying felony;
  • must complete eight (8) hours of training; and
  • complete five (5) hours of training thereafter on an annual basis.

Licensing Fees

Cultivation Licenses:

License Type

Canopy (sq. ft.)

One-time Application Fee

Annual License Fee

Micro-cultivator Tier 1

<1,000

$1,500

$2,000

Micro-cultivator Tier 2

1,000 – ≤2,000

$2,500

$3,500

Cultivator Tier 1

2,000 – ≤5,000

$5,000

$15,000

Cultivator Tier 2

5,000 – ≤15,000

$10,000

$25,000

Cultivator Tier 3

15,000 – ≤30,000

$20,000

$50,000

Cultivator Tier 4

30,000 – ≤60,000

$30,000

$75,000

Cultivator Tier 5

60,000 – ≤100,000

$40,000

$100,000

Cultivator Tier 6

100,000+

$60,000

$150,000

 

Processor Licenses:

License Type

Dried biomass processed annually (lbs.)

One-time Application Fee

Annual License Fee

Micro-processor Tier 1

<2,000

$2,000

$3,500

Micro-processor Tier 2

2,000 –<3,000

$2,500

$5,000

Processor

3,000+

$15,000

$20,000

 

Other License Types:

License Type

One-time Application Fee

Annual License Fee

Dispensary

$15,000

$25,000

Transportation Entity

$5,000

$7,500

Disposal Entity

$5,000

$7,500

Testing Facility

$10,000

$15,000

Research Facility

$10,000

$15,000

 

Qualifications for Licensure

  • Residency requirements
    • Until December 31, 2022, an individual applicant must have been a resident of Mississippi and a citizen of the United States for at least three years prior to the date of application.
    • At least 35% of equity ownership interest must be held by individuals who have been residents of Mississippi and citizens of the United States for at least three years prior to the date of application.
    • Until and after December 31, 2022, micro-cultivators and processors must be registered with an entity who has been a resident of Mississippi for at least the last three years, and 100% of the equity ownership interests in the entity must be held by individuals who have also been residents of the state for at least the past three years.
  • Owner and investors requirements
    • Every application requires the name of each principal officer and board member of the proposed medical cannabis establishment, as well as disclosure of all persons, entities, or affiliated entities who directly or indirectly own 10% or more of a medical cannabis establishment.
    • Background checks are required of every prospective principal officer, board member, agent, volunteer, or employee, before the person begins working for the cannabis establishment.
    • Additional requirements or restrictions pertaining to ownership changes may be imposed in the forthcoming regulations.
  • Marketplace requirements
    • Medical cannabis establishments may only purchase, grow, cultivate, and use cannabis that is grown and cultivated in Mississippi and may not transport it outside of the state.
    • No individual or entity may hold a direct or indirect ownership or economic interest of greater than 10% in more than one cultivation facility license, one processing facility license; and five medical cannabis dispensaries.
  • Local control
    • Municipalities and counties may enact zoning restrictions and maintain their own licensing and permitting regimes, but they may not prohibit medical cannabis dispensaries. 
  • Product regulation
    • Mississippi resident medical cannabis patients (“resident cardholders”) are subject to daily limits. The Act creates a measuring standard called the Mississippi Medical Cannabis Equivalency Unit (“MMCEU”) to establish those limits. One MMCEU is equivalent to three and one-half grams of medical cannabis flower, one gram of medical cannabis concentrate, or 100 milligrams of THC in an infused product.
    • A resident cardholder may purchase no more than six MMCEUs in one week from any dispensary and no more than 24 MMCEUs within 30 days from any dispensary. The overall possession limit for resident cardholders is 28 MMCEUs in 30 days from any dispensary. 
    • The Act prohibits medical cannabis establishments from selling flower with a potency exceeding 30% total THC.
  • Banking regulations
    • To facilitate access to banking for licensed medical cannabis establishments, the Act holds harmless under state law or regulation any bank that provides any services to any medical cannabis licensee in the state, if the bank provides those services to any other business. Banks may provide financial services to licensed medical cannabis establishment and invest any income from providing financial services to licensed medical cannabis establishments. 
    • Mississippi cannot protect banks from the risks under federal law associated with providing financial services to cannabis companies. But Mississippi’s approach is similar to the approach proposed by the federal SAFE Banking Act, which is pending in the U.S. Congress.

RELATED POST: How to get a Mississippi dispensary license

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tom

Licensed to practice since 2008, Thomas Howard has represented numerous financial institutions in litigation to enforce their security interests.
tom

tom

Licensed to practice since 2008, Thomas Howard has represented numerous financial institutions in litigation to enforce their security interests.

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