COVID-19 Forces Cannabis Industry and State Regulators to Evaluate and Improve Methods of Cannabis Delivery and Access

By Justin A. Santarosa, Arletta Bussiere, Joe Pangaro and Justin Stern

Cannabis operators, like all other businesses, are searching for new ways to reach their customers during the COVID-19 pandemic. Cannabis businesses have been generally treated as “essential” under the various state orders that have otherwise closed businesses and ordered people to stay at home. Even though they have been permitted to operate, it is not business-as-usual for these operators as they grapple with CDC workplace restrictions and guidelines for reducing the spread of COVID-19.

As a result of these restrictions, state regulators and cannabis business have begun implementing new policies and procedures such as curbside pick-up, expanded delivery zones and increased use of contactless payment methods. While these changes are viewed as temporary, if properly implemented, cannabis businesses may be able to show regulators that these expanded policies should continue after the crisis has passed. This difficult time presents an opportunity for cannabis retailers to expand their reach and help bolster support for more online ordering, home delivery and other delivery methods.

Below is a summary of how several states have handled the COVID-19 pandemic in relation to the operations of cannabis businesses during the stay at home orders.

California
On Thursday, March 19, 2020 Governor Gavin Newsom issued a stay at home order to protect the health and well-being of all Californians. The order identifies certain services as essential, including food, prescriptions, and healthcare. These services can continue despite the stay at home order.

On March 21, 2020, the California Bureau of Cannabis Control (BCC) issued a press release reiterating that cannabis is an essential business and that licensees that hold medical cannabis licenses are permitted to continue to operate so long as they follow the CDC guidelines. Cannabis home delivery is already permitted statewide under BCC regulations. In response to COVID-19  social distancing requirements several localities have amended their cannabis regulations to permit curbside pick-up. Other businesses have adopted new policies such as allowing customers to establish accounts with cash balances to reduce the handling of cash and further reduce contact between customers and the employees.

Florida
On April 1, 2020, Florida’s Governor Ron DeSantis issued Emergency Order 20-91, restricting travel outside the home to those required to obtain or provide “essential services” or “essential activities.” In defining those terms, the order incorporates guidelines issued by the U.S. Department of Homeland Security (DHS) and Miami-Dade County, neither of which explicitly include medical marijuana dispensaries as essential services (although a similar order from the City of Boca Raton included “medical cannabis facilities” within the definition of essential businesses.)

Still, Florida’s medical marijuana program already permits licensed medical marijuana treatment centers (MMTCs) to deliver medical marijuana (and medical marijuana delivery devices) directly to qualified patients. As such, even before COVID-19, qualified patients have been able to obtain their marijuana without having to physically go to a dispensary. Further, Florida’s Department of Health (DOH) has taken at least one significant step to alleviate the impact of previous local (and now statewide) “safer at home” orders. In mid-March, the State Surgeon General issued an Emergency Order enabling qualified physicians to use telemedicine for the recertification of already-existing qualified patients. (The DOH order for medical marijuana telemedicine is set to expire in the middle of April absent any extensions.)

Illinois
On March 20, 2020, Illinois Governor JB Pritzker issued Executive Order 2020-10, ordering Illinois residents to stay at home except for certain exceptions outlined in the order. The order provided that, despite the broad stay-at-home mandate, “individuals may leave their residence to work for or obtain services through … licensed medical cannabis dispensaries and licensed cannabis cultivation centers[.]” Further, the order permits individuals to leave their homes “to operate Essential Businesses and Operations” such as food, beverage, and cannabis production and agriculture operations, including “licensed medical and adult use cannabis dispensaries and licensed cannabis cultivation centers.” (On April 1, the order was extended through April 30, 2020).

In addition, Governor Pritzker has issued executive orders (No. 2020-03 and 2020-17) extending the deadlines for various adult use cannabis license applications. Most recently, Executive Order 2020-10 further extended the deadlines for craft grower license applications; infuser license applications; and transporter license applications, to April 30, 2020.

Further, the Illinois Department of financial and Professional Regulation extended, through April 30, 2020, its previously issued variance allowing medical cannabis dispensaries to dispense medical cannabis outside of the “limited access area” in which dispensing must usually take place. Under the terms of the variance, medical dispensaries with proper, written procedures may offer services such as pre-ordering and direct-to-car (curbside) pickup.

Massachusetts
On March 23, 2020, Massachusetts Governor Charlie Baker issued an Executive Order closing all non-essential businesses, and on March 31, 2020, Governor Baker extended the time period for that Order to May 4, 2020.  Although Massachusetts permits both adult use and medical marijuana, Governor Baker has only designated licensed medical marijuana retailers an essential business.

In response, Massachusetts’s Cannabis Control Commission (CCC) has issued guidance to adult-use marijuana establishments (MEs) and medical marijuana treatment centers (MTCs) through bulletins, FAQs, and Administrative Orders.  The CCC has encouraged MTCs already licensed to deliver medical marijuana to “consider the promotion and geographic expansion of those services and to remind patients of the ability to acquire up to a 60-day patient supply,” and issued an Administrative Order that permits MTCs to conduct curbside operations. The CCC’s Administrative Order permits MTCs to “conduct pre-sales by phone or electronic means,” which will allow a qualified patient or caregiver to receive medical marijuana in their “vehicle located in the parking area of an MTC.” Thus far, permitting curbside pickup for licensed patients and caregivers is the only alteration to the state’s regulations.

New Jersey
On March 21, 2020, New Jersey Governor Phil Murphy issued an Executive Order directing all residents to stay at home until further notice and requiring the closure of all non-essential retail businesses to the public. New Jersey permits the use of medical marijuana and the Executive Order specifically lists medical marijuana dispensaries and treatment centers as essential businesses authorized to remain open. Essential businesses are ordered to provide outside pickup services for goods ordered in advanced or online wherever possible. With its proximity to New York and the New York City metropolitan area, New Jersey is also being disproportionately affected by the spread of COVID-19. Dispensaries remain open, but are struggling to both provide medication to their patients and protect them from unnecessary exposure.

To aid dispensaries during this difficult time, the New Jersey Department of Health’s Division of Medicinal Marijuana has issued two temporary waivers and guidance altering the state’s medical marijuana regulations. One waiver permits dispensaries to dispense medical marijuana to patients and caregivers in their cars in dispensary parking lots or adjacent sidewalks. The waiver requires that curbside orders are placed in advance, and that patients are given a pick-up time to reduce traffic around the dispensary, along with other administrative requirements. The second waiver lowers the registration fee for primary caregivers of medical marijuana patients from $100 to $20 to incentivize the use of caregivers if patients are ill. Additionally, the temporary guidance issued by the Department enables faster on-boarding of new employees at dispensaries in anticipation of staffing issues due to COVID-19. The guidance provides provisional authority for employees to work at a dispensary for up to three months prior to undergoing a State background check, as long as the dispensary has conducted their own background check through a credible third party service.

Assistant Commissioner Jeff Brown also stated that the Department is in the process of setting up a virtual waiting room system for dispensaries to eliminate lines and encourage social distancing. New Jersey dispensaries must balance increased demand with the need for social distancing, and the waivers, guidance, and forthcoming virtual system from the Department of Health should ease some inevitable difficulties.

New York
On March 18, 2020, New York Governor Andrew Cuomo issued an Executive Order requiring all non-essential businesses and not-for-profit entities to utilize telecommunication and work-from-home procedures to the maximum extent possible. All non-essential employers were also required to reduce their in-person workforce by 50%. On March 29, Governor Cuomo expanded the Executive Order to require all non-essential workers to work from home until April 16, 2020. New York permits the use of medical marijuana. Registered Organizations in New York’s Medical Marijuana Program are considered essential businesses and allowed to remain open pursuant to guidance issued by the New York Department of Health.

New York is the epicenter of the COVID-19 pandemic in the United States, and medical marijuana dispensaries are struggling to balance providing patients with necessary medicine and protecting them from exposure to the virus. This is especially difficult in New York City where the majority of patients visit dispensaries on foot, making curbside pickups impossible. The Department of Health guidance makes temporary changes to the medical marijuana program in order to help the dispensaries deal with these challenges. The guidance (i) permits medical marijuana to be distributed from the doors of dispensing facilities, (ii) directs that dispensaries already approved for home delivery expand their delivery services in the state, and they are permitted to do so without prior written approval, (iii) encourages dispensaries to have patients schedule appointments ahead of time to promote social distancing, (iv) requires dispensaries to have a plan in place if staff become ill, including postponing meetings and gatherings, (v) asks them to notify the Department of any supply chain issues, and (vi) requires dispensaries to increase and continue their sanitation practices, including cleaning of all high contact surfaces.  Though New York dispensaries will continue to face challenges protecting their patients and staff, this guidance should allow them to better practice social distancing and reduce exposure to COVID-19.

Pennsylvania
On March 23, 2020, Pennsylvania Governor Tom Wolf issued an Executive Order instructing Pennsylvania citizens to “Stay at Home” and requiring all non-essential businesses in seven counties to close. On April 1, 2020, Governor Wolf expanded this Order to apply to the entire state. Pennsylvania permits the use of medical marijuana and medical marijuana facilities are allowed to remain open during the pendency of Governor’s Wolf’s Stay-at-Home Order. Although medical marijuana dispensaries remain open, as with medical marijuana dispensaries in other states, it has been a significant challenge to maintain strict compliance with the state’s medical marijuana regulations while at the same time serving customers in a way that will minimize the risk of further spreading COVID-19.

To address the unique challenge faced by medical marijuana dispensaries, the Pennsylvania Department of Health announced a number of temporary changes to the state’s medical marijuana program. These temporary changes (i) allow curbside pickup by medical marijuana cardholders; (ii) remove the cap on the number of patients that can be assigned to a single designated caregiver; (iii) eliminate background checks for a caregiver’s renewal application; and (iv) waive in-person consultations and allow for remote consultations between patient and approved practitioners, again only for renewal certifications. Together, these temporary changes allow patients, caregivers, and dispensaries to practice social distancing and reduce their contact with non-family members.

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We are continuing to monitor how regulators overseeing state adult-use and medical marijuana programs are responding to  COVID-19 challenges, and will provide further updates as to how cannnabis businesses and consumers are adapting to these changes. If you have any questions, please contact Justin A. Santarosa, Arletta Bussiere, Joe Pangaro, Justin Stern, any of the attorneys in our Cannabis Industry Group, any member of the COVID-19 Strategy team or the attorney in the firm with whom you are in regular contact.