Although Alabama has not yet decriminalized marijuana, changes for Alabama weed laws are on the horizon through the state’s legalization of medical marijuana and medical cannabis program.
In May 2021, Senator Tim Melson’s Compassion Act SB 46 was signed into law, permitting no more than 12 cultivation licenses, four processors, four dispensary licenses (up to three locations in different counties), and five integrated facility licenses for growing, processing, transporting, and dispensing.
Applications for these licenses are set to open up later this year and will likely be very competitive, so the sooner you start preparing, the better.
Read on to learn more about Alabama weed laws and how to prepare for the upcoming license application period.
2022 License Applications
While Alabama weed laws and specifics for the state’s medical marijuana program are still in development, applications are expected to open on September 1, 2022.
It’s unclear exactly how long the submission window will be, but the state is hoping to grant or deny licenses within 60 days of submission. Additionally, the program will allow applicants 60 days to remediate any deficiencies.
Based on the number of licenses that will be available, this is likely to be a competitive application process. You’ll need to submit an extremely detailed business plan with a proposed physical location for each business and demonstrate how you will conduct activities.
Finally, there will be a non-refundable $2,500 application fee, as well as background checks for owners holding controlling interest in the applicant’s license.
Residency & Ownership Requirements
On top of the already limited number of licenses, Alabama weed laws will place even further limitations on who can obtain licenses.
Depending on the license, one-fourth to one-fifth of the total licenses must go to businesses that are at least 51% minority owned, specifically by individuals of African American, Native American, Asian, or Hispanic descent.
Similarly, all of the cultivation licenses and three of the integrated licenses must go to businesses with at least 51% ownership held by individuals who have been Alabama residents for at least 15 years.
This residency requirement is unusually high; most states require closer to five or seven years of residency. While this choice appears to be an effort to keep things local, it also has the potential to severely limit qualified applicants who don’t meet the residency requirement from entering the Alabama market.
Your Best Asset: Business Experience
While Alabama weed laws and requirements for cultivation may be limiting, keep in mind that most of the licenses granted will be for cultivation. That means your chances of winning a cultivation license will be higher than your chances of winning a different license type.
However, the most profit will likely be in retail, since so few retail licenses are being awarded for the first year. Once the state assesses patient counts, more dispensary licenses may be added in the future.
Regardless of the license type you aim for, expertise in business will give you a huge advantage. Even if it’s not specific to cannabis, any kind of business experience — be it running a retail shop, a farm, or anything else — will help bolster the business plan portion of your application.
Your best bet to get into the Alabama market is to stay small and local, meet the residency requirements, and highlight your strong business and cannabis background. If you don’t have cannabis experience, a consulting team like Higher Yields can add the cannabis know-how to your business experience.
Anticipating Challenges
As you prepare your application, keep in mind that we still don’t have the full picture of Alabama weed laws or the state’s final requirements. And what we do know presents some unique challenges you’ll need to navigate:
- Excessive residency requirement. The state’s residency requirement will make it difficult for multistate operators and smaller businesses with only a few years of residency to apply — even those with experience and understanding of high-quality products.
- Potential for unethical token relationships. Both the residency and minority ownership requirements open the door for larger, out-of-state operators to create agreements with minority locals just to get their foot in the door.
- Limitations on cultivation. In addition to the above requirements, Alabama weed laws will not allow any raw plant material.
- Limited real estate availability. Due to the county disbursement requirement for dispensaries and the state’s setback requirements, real estate options may be quite limited.
With all of these limitations and requirements, it will be especially important to take advantage of every resource available to give yourself the best shot at winning a license and building your Alabama cannabusiness.
Get Expert Help Navigating Alabama Weed Laws
Although Alabama weed laws are still in flux, the application period for cannabusiness licenses is quickly approaching. Start preparing now to ensure you meet all the requirements for your prospective license type and business facility.
Get a Green Zone Assessment to ensure your property is both compliant with current Alabama weed laws and conducive to future growth.
