Ohio has legalized recreational cannabis. Click HERE to learn more about cannabis business opportunities in Ohio.

How To Open a Dispensary in Alabama

Are you wondering how to open a cannabis dispensary in Alabama? This page is dedicated to keeping you up to date on the latest news and information relevant to opening a cannabis business in Alabama. This includes helpful insight on what is to come next for the state.

Overview

Currently, marijuana in Alabama is illegal for recreational use. However, on May 17th, 2021, Alabama Governor Kay Ivey signed into law Senate Bill 46, legalizing medical cannabis. Alabama is now the 37th state to legalize medical marijuana for its citizens.

Here’s a timeline of what transpired in passing the bill:

  • A limited medical marijuana bill was signed into law by Gov. Robert Bentley in April 2014, SB 174 (Carly’s Law).
  • The Medical Marijuana Patient Safe Access Act failed to get Senate approval in 2015. Carly’s Law was expanded by Leni’s Law in 2016, allowing CBD oil to be used on a broader range of symptoms and allowing up to 3% less THC to be present in the oil.
  • During her tenure as governor of Alabama, Governor Kay Ivey has signed Senate Bill 236 into law to establish a medical marijuana commission.
  • Senator Tim Melson introduced Senate Bill 165, the Compassion Act, on February 11, 2020, after months of study by a medical, legislative, and legal commission.
  • A Senate resolution was passed on March 11, 2020, and SB46 was sent to the House for consideration. However, the bill was not moved until the legislative session ended on May 18, 2020, due to the coronavirus pandemic.
  • The medical cannabis law was reintroduced by Sen. Tim Melson in 2021 as SB 46 and was recently passed as law.

 

With the newly signed law, patients with 16 qualifying medical conditions would be allowed to buy medical marijuana with a doctor’s recommendation and an identification card. Currently these qualifying medical conditions include: chronic pain, vomiting or nausea related to cancer, weight loss or nausea related to HIV/AIDS, Crohn’s disease, sickle cell anemia, epilepsy, panic disorder, PTSD, autism, and Parkinson’s disease, among others.

On October 24th, 2022, applications for medical cannabis licenses were sent to prospective company owners by the Alabama Medical Cannabis Commission (AMCC). From September 1st until October 17th, the AMCC welcomed requests for medical cannabis licenses and received a total of 607. The applications must be returned to the state by the 30th of December. There is a fee of $2,500 that is non-refundable for each type of license, and business owners can only submit an application for one type of license. 

On October 12th, 2023, the Alabama Medical Cannabis Commission (AMCC) initiated a plan to distribute licenses to medical marijuana cultivators and distributors by the end of the year. This action was a response to several lawsuits that had disrupted the initial attempt to launch the state’s medical cannabis program. Earlier attempts to issue licenses were filled with complications: the first batch, released on June 12th, 2023, had to be taken back due to errors in the application process, and another attempt in August faced legal challenges from unsuccessful applicants. To make the process smoother, the AMCC implemented an emergency rule, allowing a more transparent licensing procedure where applicants could directly present their cases.

By December 12th, 2023, progress was noted as the AMCC awarded medical cannabis business licenses to five integrated facility applicants. On the same day, a request to stop the issuance of medical cannabis licenses in the state was filed by Alabama Always, a medical marijuana company seeking one of the vertically integrated licenses. The company filed a lawsuit claiming bias against it by some members of the Alabama Medical Cannabis Commission (AMCC). This lawsuit marked the third filed by Alabama Always, which had not been selected in the first two licensing rounds. Earlier, on December 1st, 2023, the AMCC had issued 20 MMJ business licenses and received 38 applications for integrated facilities, with state law allowing a maximum of five awards. 

On March 11th, 2024, the Montgomery County Circuit Court reviewed the legal challenges that had delayed the start of Alabama’s medical marijuana program, indicating that these issues would persist in court for at least another month. These proceedings follow the AMCC’s efforts to license businesses for various roles in the industry, as required by the 2021 law. While licenses for cultivation, processing, transportation, and testing had been granted, disputes arose over dispensary and integrated company licenses, involving over a dozen companies. The AMCC maintained that these companies must first complete administrative appeals and questioned the legal standing of the cases. The ongoing court deliberations have delayed the availability of medical marijuana to patients, significantly diverging from the initial schedule.

Opportunity Size

ArcView Market Research/BDS Analytic projects the legal cannabis market in Alabama to be $19.7 million by 2024. Some sources have shown that legalizing cannabis would be beneficial for the state financially. Marijuana legalization is expected to alleviate the damage caused by the criminal justice system and to improve the state’s economy.

The impact on the state for recreational marijuana in particular, would be huge and is reported by the Tax Foundation to be 92,217,856 USD in excise tax revenue. 

Medical Marijuana

As stated above, Alabama has now legalized medical marijuana for its citizens. Cannabis for medical use can be administered as a tablet, capsule, cream, gel or balm. It cannot be smoked, vaporized, baked, or mixed into foods like cookies or candy. Patients who suffer from a debilitating epileptic condition are covered by the law, but home cultivation or a state-controlled dispensary system is illegal under the law.

A patient with a medical cannabis certification should visit only a “Registered Certified Physician”. The certified physician is responsible for entering the patient’s data into the local database, the Alabama Medical Cannabis Patient Registry System. Once the patient is registered successfully, the commission will issue a medical marijuana card that allows the cardholder to avail up to 60 cannabis dosages, and possess 70 daily dosages and below of marijuana.

Local Cannabis Restrictions and Laws

When you are looking to open a cannabis business in Alabama, one of the most important considerations is location. There are particular local municipalities or cities where they have determined to outright ban or restrict marijuana.

The counties and cities that have passed a resolution or ordinance allowing medicinal marijuana dispensaries within their respective borders are Butler County, Cullman City, Cullman County, Glencoe City, Houston County, Killen City, Loxley City, Montgomery City, Owens Cross Roads City, Russellville City, and Tuscaloosa City. You can view here a list of local jurisdictions that submitted an ordinance or resolution to the AMCC.

As Alabama’s cities and towns form their own stances on laws, whether it’s outright bans or particular restrictions, we will keep you up to date on this section here.

Cannabis Business License Opportunities

Alabama Cannabis Licensing Timetable

This page outlines the Alabama Cannabis Licensing Timetable; however, it should be noted that the timetable has not been adhered to due to the emergence of issues on June 12th, as mentioned above.

Between September 1, 2022 and October 17, 2022, prospective business owners had the opportunity to request license applications.

On October 24, 2022, applications were mailed out, and the deadline to submit them was on December 30th.

On June 12, 2023, the winners of initial licenses were announced, following a period for the public to remark and opportunity for making necessary modifications.

June 26, 2023 is the deadline for payment of the licensing fees. 

On July 10, 2023, final permits are scheduled to be granted.

Medical Cannabis License Types and Fees

Different medical marijuana license types are available to applicants according to SB 46. Licenses are granted based on public applications:

Dispensary License means a company is authorized to dispense and sell medical cannabis at dispensing sites to registered physicians and caregivers. A total of four dispensaries are permitted by the state, with three locations located in different counties. The dispensary license fee is $40,000.

Cultivator License is a permit to grow cannabis. The state expects to license at least four cultivators. The cultivator license fee is $40,000.

Processor License provides the ability to purchase cannabis from a cultivator, extracting  derivatives from the cannabis, and then packaging and labeling the cannabis products for sale at a dispensary. Only four processors will be licensed by the state. The processor license fee is $40,000.

Secure Transporter License allows a licensed facility or site to transport cannabis or medical cannabis to another licensed facility or site. The transporter license fee is $30,000.

Testing laboratories license is the proof the product meets the safety requirements of the act. The testing lab license fee is $30,000.

Integrated Facility license is a license that allows the licensee to perform the functions of a cultivator, processor, secured transporter, and dispensary. Only five integrated facilities will be licensed. The integrated facility license fee is $50,000.

The number of licenses that can be issued for each category has been capped by the state legislature as follows: four dispensary licenses, twelve cultivator licenses, four processor licenses, and five integrated facility licenses. In addition to that, the number of permits available for secure transport and state testing laboratories is unspecified.

How much does it cost to open a dispensary in Alabama?

To open a dispensary in Alabama, a non-refundable fee in the amount of $2,500 must be paid by every application for a medical marijuana business license. Applicants who are successful in having their license applications approved are required to pay a $40,000 license fee.

Click here to view the Alabama Medical Cannabis Commission’s fee schedule for 2022-2023.

Social Equity Component

According to Alabama law, a minimum of one-fourth of all licenses for cultivators, processors, secure transporters, dispensaries, and state testing laboratories, and a minimum of one-fifth of all licenses for integrated facilities, must be awarded to business entities that meet the following criteria:

  • At least 51 percent of the business is owned by members of a minority group, or for a corporation, at least 51 percent of the business’s shares are owned by members of a minority group.
  • Members of a minority group run and manage the business on a daily basis. 

 

People of African American, Native American, Asian, or Hispanic descent are part of a “minority group.”

Recreational Use Legalization

Cannabis use for recreational purposes is against the law in Alabama. It is a misdemeanor for first-time offenders to possess personal amounts of marijuana, but it is a felony for repeat offenders or those who possess with the intent to sell.

In order to garner support for their campaign to legalize marijuana for recreational use in the state of Alabama, the Alabama Democratic Party has developed a website with the name “Free Weed.” The website, www.FreeWeedAL.com, is a combination of campaigning for specific policies and promotion for the candidates endorsed by the state Democratic Party. It contends that the use of criminal justice resources to prosecute individuals for possessing tiny amounts of cannabis is a waste of those resources and that the legalization of marijuana might offer economic benefits to the state.

Even while we can’t see into the future, we do know that residents of Alabama are unable to submit a petition to have an initiative on recreational marijuana put to the ballot. The state legislature is going to have to be involved in any potential route to legalize marijuana. The use of cannabis for medical purposes was made legal in 2021, but the state has made it quite clear that this does not pave the way for its use in recreational settings.

The results of a 2022 survey that was carried out by CBS42, The Hill, Emerson College indicated that opinions on whether or not the state should legalize recreational marijuana were fairly divided. According to the results of the poll, 47% of primary voters in Alabama are against making marijuana legal for recreational use, while 42% are in favor of doing so. 10.7% are uncertain or have no opinion.

Several events such as those noted above will affect when and how recreational legalization might unfold in Alabama. This page will keep you up to date with all of the latest news regarding how to open a dispensary in Alabama, along with all other relevant information relating to Alabama cannabis legalization. Join our Alabama Cannabis Mailing List

Among the topics included are the following but not limited to

  • What are the latest updates with recreational cannabis legalization in Alabama?
  • Requirements to open a dispensary and other cannabis business in Alabama? 
  • Will there be any special programs available for residents to open their own cannabis business?

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