The Hazy Rollout of Ohio’s Medical Marijuana Control Program (MMCP)

The Hazy Rollout of Ohio’s Medical Marijuana Control Program (MMCP)

The following is an excerpt from a larger client alert regarding the “affirmative defense” provision of HB 523 and relevant considerations for doctors and patients interested in exploring its use prior to full implementation of the MMCP. Click here to read the full client alert.

By Jeff McCourt[1] and Dan O’Brien[2]

When Ohio House Bill 523 (HB 523) became effective on September 8, 2016, Ohio joined the company of 25 other states, the District of Columbia, and several U.S. territories that have legalized cannabis for medicinal purposes. Modeled after highly restrictive regimes adopted by state legislatures in Illinois, Maryland, and New York, the Medical Marijuana Control Program (MMCP) envisioned by HB 523 has the potential to be one of the most complex and heavily regulated medical cannabis programs in the country. HB 523 relies on a tightly controlled ‘Schedule II’ pharmaceutical-style regulatory framework, but the Ohio legislature left some room for flexibility in the MMCP by punting to the rulemaking process several of the toughest issues it faced, such as determining the number of licenses available under the MMCP, the cost of licenses, the geographical distribution of medical cannabis businesses, and the hurdles doctors will face in order to recommend medical cannabis to patients with qualifying medical conditions.

The ultimate functionality of the MMCP – both in terms of the opportunity for seriously ill patients to access medicine, and the opportunity for market participants to create a sustainable program to serve those patients – will be determined by the extensive rulemaking and licensure process to be carried out by the Department of Commerce, the state Pharmacy Board, and the state Medical Board over the next two years. Several early indicators, however, have begun to cast doubt on the program’s viability as written. This article recaps several recent developments in the MMCP and addresses specifically the Medical Board’s recent guidance on the “affirmative defense” provision of HB 523, the only part of the law that is currently operational.

I.                   Early Actions Hamper Implementation of the MMCP

The Ohio Supreme Court’s board of professional conduct, which is responsible for regulating Ohio lawyers, tossed a fireball into the lap of the Supreme Court in August by releasing a narrow reading of the ethics rules applicable to Ohio lawyers when advising clients involved in the cannabis industry. Just weeks before the effectiveness of HB 523, the board of professional conduct told Ohio lawyers that, among other things, it was unethical to assist clients in setting up medical cannabis businesses or to represent them in the rulemaking process. As a result, several of the largest law firms in the state were forced to suspend their activities in the space while the Supreme Court rushed through an amendment to the ethics rules. Such an amendment was adopted on September 20th, allowing doctors, patients and cannabis businesses to obtain legal representation in Ohio.

Adding further confusion to the mix, the Ohio Municipal League has launched a statewide effort to educate local governments about HB 523. Given the lack of clarity on how the state regulations will operate and where cannabis operations will be located throughout the state, dozens of local governments have chosen to preemptively adopt bans or moratoriums on all medical cannabis businesses within their jurisdictions. While most of the jurisdictions that have adopted such measures are small cities in rural areas, a growing number of larger cities with significant potential patient populations, such as Lakewood and Cleveland, have adopted or are considering moratoriums as well.[3] The rationale often cited by local officials when imposing these measures (essentially, that if cities don’t act now, their Main Streets could be populated with unregulated cannabis businesses that would be ‘grandfathered’ out of later-adopted zoning restrictions) are inconsistent with how the MMCP and zoning laws actually function. An unintended consequence of these measures is that cities with moratoriums on the books could be passed over entirely by businesses seeking to obtain licenses for significant cultivation and processing facilities, which could easily run into the tens of millions of dollars and thus will require certainty as to the viability of site selection by such businesses early on in the planning process.

Most recently, on September 24th, the state Medical Board, which is responsible for regulating Ohio doctors, dealt a significant blow to patients hoping to avail themselves of the protections provided by HB 523 prior to the opening of dispensaries two years from now.[4]  While couched in the context of guidance to doctors, the carefully worded interpretation of Ohio doctors’ ability to recommend medical cannabis during the “affirmative defense” period served only to highlight the gray area created by HB 523.

In its guidance, the Medical Board instructed physicians that they cannot issue a “state of Ohio approved written recommendation” to use medical cannabis until the Medical Board adopts rules for doing so, which could take up to a year. In the meantime, physicians who receive requests from patients for medical cannabis were encouraged to “consult with their private legal counsel and/or employer for interpretation of the legislation.”  In response to the Medical Board’s guidance, representatives from the Ohio State Medical Association (OSMA) reiterated the association’s previous stance that doctors should not recommend cannabis until the Medical Board adopts its formal rules.[5]

The OSMA’s interpretation of the Medical Board’s guidance, in turn, quickly drew widespread news coverage. One of the lead state legislators behind HB 523, Senator Dave Burke (R-Marrysville) responded in interviews that “willing physicians are in the free and clear” to recommend cannabis during the affirmative-defense period, and representatives from the Medical Board added that the Medical Board would “review a medical marijuana related complaint as they would any other… [and] would consider whether someone violated state law, including the immunity provision.”[6]  Another prominent backer of HB 523, Senator Kenny Yuko (D-Richmond Heights), issued a press release stating that “the affirmative defense section spells out everything a physician would need to do to provide patients with this limited, short-term protection without having to wait for the agencies. It simply wouldn’t make sense to read it any other way.”[7]

The affirmative defense provision and the varying interpretations of it by key actors has created quite a hairball for Ohio doctors and their patients to untangle with their lawyers. In an effort to facilitate discourse among the legal and medical professions regarding the affirmative defense provision (and by no means to provide legal advice to anyone), the rest of this article will cover some of the relevant considerations that doctors and their employers may want to evaluate with counsel in order to minimize risks when recommending cannabis to patients during the affirmative-defense period. While the recommendation and use of medical cannabis does pose at least some theoretical legal risk to all parties involved in the process, it is reasonably clear that Ohio physicians willing to face those risks do currently have the ability to recommend cannabis to patients with qualifying medical conditions.

Click here to read the full client alert examining the “affirmative defense” provision of HB 523 and relevant considerations for doctors and patients interested in exploring its use prior to full implementation of the MMCP.

Disclaimer: As with all of our publications, we remind you that we are providing this analysis for general informational and educational purposes, to help advance a general understanding and discourse around cannabis law and regulated industries. This article does not provide legal advice or create an attorney-client relationship. Perhaps most importantly, please remember that the use, possession, distribution and sale of marijuana remains a crime under federal law and (except as specifically permitted by HB 523) the laws of Ohio. This publication does not, and should not in any way be construed to, assist anyone in violating applicable law. 

 

 

[1] Jeff McCourt is an associate in the Corporate & Securities group in our Cleveland office, where he focuses on counseling cannabis businesses and other emerging-growth companies, venture capital and private equity funds in a variety of business and finance matters. He can be reached at 216-363-4428 or jmccourt@beneschlaw.com.

[2] Dan O’Brien is an associate in the Health Care & Life Sciences group in our Cleveland office, where he focuses on advising long-term care providers, durable medical equipment companies, hospitals, home health care companies and other ancillary service providers on transactional and regulatory business issues. He can be reached at 216-363-4691 or dobrien@beneschlaw.com.

[3] See Jackie Borchardt, Ohio lawmaker urges cities not to ban medical marijuana before state sets rules, Cleveland.com, September 8, 2016; Leila Atassi, Cleveland City Council proposes moratorium on issuing medical marijuana licenses, Cleveland.com, September 15, 2016; and Jackie Borchardt, Lakewood, other Ohio cities block medical marijuana business licenses months before any will be awarded, Cleveland.com, August 8, 2016.

[4] State Medical Board of Ohio, Affirmative Defense: What is required of a physician to recommend medical marijuana now that House Bill 523 is effective?.

[5] See Jim Provance, Ohio board deals blow to medical marijuana, ToledoBlade.com, September 23, 2016 (“The Ohio State Medical Association had advised its members to wait for further guidance from their state licensing and disciplinary board. That position has not changed. “We would advise our members not to do anything until the rules and regulations have been drafted and promulgated,” said spokesman Reginald Fields. “We understand that may not be for a year or so.””).

[6] See Jackie Borchardt, Ohio medical board: Doctors should talk to lawyers, employers about medical marijuana law, Cleveland.com, September 23, 2016.

[7] See Senator Yuko Responds to Medical Board Statement, OhioSenate.gov, September 24, 2016.

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