Georgia will establish a regulated system for the production, processing and sale of medical cannabis oil under legislation signed by Gov. Brian Kemp.

House Bill 324, which was signed into law April 17, grants the state’s roughly 9,500 registered medical marijuana patients a way to legally obtain the product that they’ve been allowed to possess and use, but could not purchase. Georgia law has allowed patients approved by a physician to possess up to 20 fluid ounces of cannabis oil since 2015, but the sale or transportation of the oil was prohibited.

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“The way the law was, if you had a condition and were part of the state registry, that would authorize you … to be in possession of low-THC cannabis oil,” Chris Lindsey, legislative counsel for the Marijuana Policy Project, told Cannabis Business Times. “If you happen to get caught by law enforcement … and you met whatever the possession limits are, … then you could avoid getting charged for possession. The problem with that is that there was no system in place for how that oil was actually produced, where it came from, if it was tested … or how it would be sold. So, in effect, the state’s 8,000 or so patients really had to go to the underground market.”

The new law will create an oversight board responsible for creating regulations and licensing up to six private companies and two universities to grow cannabis and process it into low-THC medical marijuana oil (which contains less than 5-percent THC content). The oil will then be sold to registered patients through state-approved dispensaries or pharmacies licensed to do so through the State Pharmacy Board, according to an Atlanta Journal-Constitution report.

“There was a huge amount of debate about who should be in a position to do this type of work,” Lindsey said. “The way that it settled was that the universities could be involved. There was a lot of discussion about that.”

The legislation directs the University of Georgia and Fort Valley State University to seek licenses to produce and manufacture the oil, the Atlanta Journal-Constitution reported, but universities tend to shy away from the direct production of cannabis due to federal prohibition, Lindsey said.

“There’s a lot of pressure from the federal government on the universities, and there are even some very specific laws that limit how involved universities can be,” he said. “It’s a nice thought because people like the idea of research and having it be a bit of an academic exercise, but really, federal law has not changed, so that puts a pretty big burden on universities.”

Originally, lawmakers considered allowing the universities to contract with private entities, which is how Louisiana’s industry operates, but that idea quickly fell apart, Lindsey said.

“Essentially what happens is you create another layer of bureaucracy, and that’s not necessarily better,” he said.

Instead, the final legislation allows universities to be involved in the program, but if they decline, additional private businesses will be able to submit licensing applications.

“In a way, from my perspective, it’s sort of a failsafe, meaning give it a shot, see if you can work something out with the DEA or whoever might need to be involved to do an approval like that, but let’s not leave the patients out of the picture if for whatever reason the universities can’t step up,” Lindsey said.

A timeline on legal sales remains unclear, he added. Once the regulatory committee is established, it will propose rules for the program, which will then undergo a public comment period.

“There’s been a huge amount of support from the governor’s office, so I don’t expect we’re going to see an outrageous amount of delay in this process,” Lindsey said. “I think they’re going to be deliberative, but I don’t see any sign that they’re going to sit around and waste time.”

And when medical cannabis oil sales do roll out in the state, patients will finally have regulated access to products that have been tested according to state specifications.

“They don’t have to worry about where it’s going to come from,” Lindsey said. “They don’t have to rely on people who are breaking the law to get it to them, and that’s a pretty big deal.”

This shift in Georgia’s cannabis policy mirrors broader reforms across the country, Lindsey added. In the early 2000s, state laws often articulated protections for individuals in possession of marijuana, but didn’t address the production and retail sale of cannabis. In 2013, the U.S. Department of Justice released the Cole Memo, which declared that the federal government would not prosecute state-compliant cannabis businesses, and states felt more comfortable regulating the commercial cannabis activity within their borders.

“That message resulted in several states going back into their laws and, in a way, doing exactly what Georgia did, which is to say, ‘OK, now we need to figure out these other pieces and get a handle on that so that all of this stuff is part of a regulated system,’” Lindsey said. “Georgia … went through that, where they wanted to provide relief to patients, but were uncomfortable with what happens with the potential commercialization that might develop around that.”

Now, like many other states, Georgia has recognized the need for that sort of regulated system.

“It’s such a huge improvement for Georgia to have this kind of system in place,” Lindsey said. “It’s a huge step forward for the state in terms of its regulatory control over the program, so that’s a real positive."