A Louisiana lawmaker is hoping to test drive adult-use cannabis legalization to possibly increase buy-in for a full reform package three years down the road.
State Rep. Candace Newell, D-New Orleans, filed legislation on Feb. 25 that would allow the state’s 10 existing medical cannabis retail licensees to serve adults 21 and older beginning next year under a pilot program.
Under House Bill 373, the “Adult-Use Cannabis Pilot Program Regulation and Enforcement Act,” Louisiana’s 10 retail licensees could sell adult-use cannabis at one dispensary location each from July 1, 2027, through July 1, 2030. There are currently 27 medical dispensaries in Louisiana, with each licensee allowed to operate up to two satellite locations.
The pilot program would allow the Pelican State to test the “practicality of a potential permanent program in a real-world environment to determine if it works as intended,” according to Newell’s nine-page legislation.
Under the proposal, the Louisiana Department of Health would be authorized to exercise regulatory authority over the entire adult-use pilot program supply chain. The program would allow no more than two licensees to cultivate, extract, process, produce and transport cannabis. These responsibilities currently belong to Ilera Holistic Healthcare and Good Day Farm under the state’s medical program.
Since Louisiana first launched medical cannabis sales in August 2019, the program has grown to nearly 150,000 qualified patients, or roughly 3.2% of the state’s population, The Acadiana Advocate reported last week.
When Newell first introduced the idea of an adult-use pilot program last year, she told Louisiana First News that her intentions were not only grounded in reform but also in providing the state with another revenue source.
“We can have that additional revenue and continue to stand up and support the programs that we already have in place and not constantly putting the funding of those programs on the back of our taxpayers,” she said.
Under the pilot program, the Department of Health would assess a 3.5% gross wholesale fee on both medical and adult-use cannabis produced by the two manufacturers; however, if either licensee declined to participate in the pilot program, it would have to continue to pay a 7% fee on the gross sales of medical cannabis.
Also under the proposal, each participating retail location, cultivator and testing laboratory would be required to pay a $5,000 annual license fee to participate in the pilot program.
In addition, state and local sales and use taxes would apply to all adult-use dispensary sales under the pilot program. Medical cannabis retail sales would be exempt.
In addition to testing the “practicality of a potential permanent program,” the bill states that, “in an effort to protect the public health, safety and welfare,” the proposed pilot program is designed to:
- identify potential challenges, limitations or risks that could arise before a potential permanent rollout;
- provide the opportunity to gather real-time feedback and data to assess the effectiveness of the temporary pilot program and potential permanent program, as well as identify any unintended consequences;
- mitigate the risks and exposure by testing the waters on a smaller scale, rather than committing to a potential permanent implementation that could prove unsuccessful; and
- gather, measure and analyze the outcomes and results to determine whether the temporary pilot program or potential permanent program should be modified or abandoned.
Newell told Louisiana First News that the pilot program will help her and her fellow legislators evaluate the pros and cons of legalizing adult-use cannabis before codifying a permanent program: “I’m talking about statewide, across-the-board, education on the product, the use of the product, the dangers of it, and how it can be beneficial,” she said.
