2021 annual report : annual Commission report to the Georgia General Assembly in accordance with O.C.G.A. §§ 16-12-203(9), 16-12-204(c)(2), 16-12-214(a) and (b).

2021 ANNUAL REPORT
ANNUAL COMMISSION REPORT TO THE GEORGIA GENERAL ASSEMBLY
IN ACCORDANCE WITH O.C.G.A. 16-12-203(9), 16-12-204( c)(2), 16-12-214( a)a nd(b)
Georgia Access to Medical Cannabis Commission
7 Martin Luther King, Jr. Drive, Southwest, Suite 139 Atlanta, GA 30334 470-227-0331 www.gmcc.ga.gov

Georgia Access to Medical Cannabis Commission

Christopher Edwards, MD, Chair

Danielle Benson, Vice Chair

Jason Hockenberry, PhD

William Bornstein, MD

William Prather, R.Ph

Judith Rochon, MD Bob Starrett, Chief

www.gmcc.ga.gov

MEMORANDUM

TO

MEMBERS OF THE GEORGIA GENERAL ASSEMBLY

FROM

GEORGIA ACCESS TO MEDICAL CANNABIS COMMISSION ANDREW TURNAGE, EXECUTIVE DIRECTOR

DATE

JANUARY 15, 2021

SUBJECT MANDATORY ANNUAL REPORTS & SUPPLEMENTAL INFORMATION

The newly-formed state agency, the Georgia Access to Medical Cannabis Commission (GMCC) is submitting its inaugural Annual Report to fulfill statutory reporting obligations under House Bill 324 (2019) Georgia's Hope Act which include a) Proposed Legislative Changes, b) Low-THC Oil Production Report, and c) Minority and Women Owned Business Study. Since passage of Georgia's Hope Act in 2019, the number of Georgia patients on the Georgia Department of Public Health's Low-THC Oil Registry has grown from 9,500 to more than 13,000 in 2020, a 36.84% increase. The Commission is also submitting (projected) Collection of Revenue, Milestones, and a Strategic Plan in demonstration of agency goals and measures as outlined in the statutory requirements for the Commission and in compliance with federal requirements for state level cannabis programs.

Table of Contents
Commission Members & Staff ..............................................................................1 Purpose & History of the Commission ...................................................................2 Collection of Revenue..........................................................................................5 Milestones .........................................................................................................6 Proposed Legislative Changes .............................................................................7 Production Report .............................................................................................9 Minority and Women Owned Business Study .......................................................11 Strategic Plan FY20-23.......................................................................................12

Members of the Commission
Christopher Edwards, MD, Chair Danielle Benson, Vice Chair William Bornstein, MD Jason Hockenberry, PhD William Prather, R.Ph Judith Rochon, MD Bob Starrett, Chief of Police
Commission Staff
Andrew Turnage, Executive Director
Seven members serve on the Commission. The Chair and two members appointed by the Governor, two appointed by the Lieutenant Governor, and two appointed by the Speaker of the House, were each appointed in November, 2019. The Commission has held four (4) public hearings at locations around the state to seek public feedback, to inform the public about small business opportunities for minority, women, and veteran business owners, and to raise awareness about the mission and objectives of the Commission and the regulated development of medical cannabis in Georgia. The Commission received appropriations (FY 20 & F21) for one staff member only, the Executive Director. The Commission selected an Executive Director from four candidates vetted by the Goodwin Group, a national search firm, in May, 2020. The Commission has one office location headquartered at 7 Martin Luther King Jr. Drive, Suite 139 in Atlanta, Georgia 30334.
Georgia Access to Medical Cannabis Commission 2021 Annual Report 1

Mission Statement
The Mission of the Georgia Access to Medical Cannabis Commission is to develop, regulate, and position the medical cannabis industry in Georgia to be a producer of quality, accessible medicine, and a global leader in patient outcomes.
Vision Statement
The Vision of the Georgia Access to Medical Cannabis Commission is to ensure a stable, efficient, and carefully constructed system of in-state cannabis cultivation and medical cannabis dispensaries to provide quality medicine only to those patients authorized by Georgia law, to ensure active participation by minority, women, and veteran owned businesses in the industry, and to expand small business opportunities and development in Tier 1 and Tier 2 counties in rural Georgia.
Purpose & History of the Commission - Georgia's Hope Act HB324 (2019)
The Commission is charged (O.C.G.A. 16-12-203) with regulatory oversight of medical cannabis growth, harvesting, refinement, production, tracking, quality assurance, distribution, transportation, and dispensing. The Commission regulates companies applying for and licensed to operate within the medical cannabis industry to grow approximately 3 acres of medical cannabis in indoor secure facilities only for the purpose of producing low-THC oil, as well as a statewide network of dispensaries for registered patients to obtain access through lawful sale and purchase of low-THC oil. The target population served includes competitive applicants for two (2) Class 1 Production Licenses to grow medical cannabis, and four (4) Class 2 Production Licenses to grow medical cannabis. The Commission is charged with encouraging active participation by minority, women, and veteran owned businesses and economic development in Tier 1 and Tier 2 counties. While required to be Georgia corporations, interested applicants are often located and operate in multiple states in the U.S. as well as globally in other countries. The Commission has regulatory oversight for the application and licensing of Dispensaries, as well as seed-to-sale tracking, quality assurance laboratory testing, transportation, and facility inspections.
Georgia Access to Medical Cannabis Commission 2021 Annual Report 2

On April 2, 2019, the Georgia General Assembly passed House Bill 324 titled "Georgia's Hope Act," which authorizes the Georgia Access to Medical Cannabis Commission to oversee the regulated licensing of limited, in-state cultivation, production, manufacturing, and sale of low-THC oil as well as dispensing to registered patients on the state's Low-THC Oil Registry. Georgia's state Low-THC Oil Registry is managed and maintained by the Georgia Department of Public Health. Governor Kemp signed the bill into law on April 17, 2019. Georgia's Hope Act (Official Code of Georgia Annotated 16-12) took effect July 1, 2019. The Commission is administratively attached (O.C.G.A. 16-12-202, 50-4-3) to the Office of the Georgia Secretary of State for the purposes of budget, procurement, and human resources as provided by the law.
The General Assembly finds that the purpose of this Act is to allow the legitimate use of medical cannabis for health care, including palliative care. The General Assembly finds that this Act does not in any way diminish this state's strong public policy and laws against illegal drug use, nor should it be deemed in any manner to advocate, authorize, promote, or legally or socially accept the use of marijuana for children or adults for any non-medical use.
Currently, all states that establish the authority to enact state laws and regulate cannabis with the presence of tetrahydrocannabinol ("THC") at any level and in any form, other than industrial hemp, rely upon the advice and guidance of the United States Deputy Attorney General and the United States Department of Justice. Specific to the Commission, the following excerpt from the U.S. Deputy Attorney General memo dated August 29, 2013 provides guidelines for state-level programs that regulate cannabis:
The enactment of state laws that endeavor to authorize marijuana production, distribution, and possession by establishing a regulatory scheme for these purposes affects this traditional joint federal state approach to narcotics enforcement. The Department's guidance in this memorandum rests on its expectation that States and local governments that have enacted laws authorizing marijuana-related conduct will implement strong and effective regulatory and enforcement systems that will address the threat those state laws could pose to public safety, public health, and other law enforcement interests. A system adequate to that task must not only contain robust controls and procedures on paper; it must also be effective in practice. Jurisdictions that have implemented systems that provide for regulation of marijuana activity must provide the necessary resources and demonstrate that willingness to enforce their laws and regulations in a manner that ensures they do not undermine federal enforcement priorities.
Georgia Access to Medical Cannabis Commission 2021 Annual Report 3

In jurisdictions that have enacted laws legalizing marijuana in some form and that have also implemented strong and effective regulatory enforcement systems to control the cultivation, distribution, sale, and possession of marijuana, conduct and compliance with those laws and regulations is less likely to threaten the federal priorities set forth above. Indeed, a robust system may affirmatively address those priorities by, for example, implementing effective measures to prevent diversion of marijuana outside of the regulated system and to other States, prohibiting access to marijuana by minors, and replacing illicit marijuana trade that funds criminal enterprises with a tightly regulated market in which revenues are tracked and accounted for. In those circumstances, consistent with traditional allocation of federal-state efforts in this area, enforcement of state law by state and local law enforcement and regulatory bodies should remain the primary means of addressing marijuana related activity. If state enforcement efforts are not sufficiently robust to protect against the harms set forth above, the federal government may seek to challenge the regulatory structure itself in addition to continuing to bring individual enforcement actions, including criminal prosecutions, focused on those harms. Full US Deputy Attorney General Memo (SEE ATTACHMENT A) : https://www.justice.gov/iso/opa/resources/3052013829132756857467.pdf
Georgia Access to Medical Cannabis Commission 2021 Annual Report 4

Collection of Revenue
The Commission projects revenue collections for FY21 to be a minimum of $1,500,000 through the collection of Application and License fees from applicants for Class 1 and Class 2 Production Licenses. The Commission has received notice from almost 70 companies indicating intent to submit a Competitive Application Proposal for licensure. Class 1 Production License Application Fees are $25,000 with a License Fee of $250,000. Class 2 Production License Application Fees are $5,000 with a License Fee of $100,000. Application Fees and License Fees are statutory. The Commission receives no other funds other than appropriations--application and license fees are remitted to the Treasury upon receipt with no retained funds collection permissible by statute.
Budget
The Commission, with one employee, will be required to receive, process, and evaluate the applications (potentially in the hundreds of applications) and issue six (6) production licenses. Once the licenses are issued, the Commission will be in the role of Regulatory Compliance with oversight for the production of a Schedule 1 Controlled Substance for the state, which will include legal compliance, regulatory compliance, complaints, seed-to-sale tracking, as well as quality assurance for the medical cannabis oil that patients will ingest. The Commission will also begin the process of promulgating rules for a new license type, Dispensing Licenses (Retail), as well as setting up the system, accepting applications, and continuing through the process of issuing licenses along with regulatory compliance for those license types state-wide. The Governor's Office of Planning and Budget (OPB) signed a Budget Memo for the new Commission to be funded at startup budget of $1.2 million (S EE ATTACHMENT B); the Commission was appropriated $225,000 in funds for FY20, an 83% cut from the original budget outline. FY20's budget of $225,000 did not cover the basic expenses of the commission: office supplies, office equipment, GBA rent, worker's compensation, disability insurance, and cyber security insurance coverage. For FY21, the commission has requested $531,000 to fund the basic operating expenses and to add a staff attorney. This attorney will serve as the in-house subject matter expert to guide the Commission on cannabis law, procedures in the state of Georgia, and responses to legal matters.
Georgia Access to Medical Cannabis Commission 2021 Annual Report 5

Milestones
Since the appointment of Commissioners, the Commission has held three Public Hearings, and conducted four Public Meetings to create and establish procedures for issuing Production Licenses. The Class 1 and Class 2 Production Licenses Competitive Application Request For Proposals (RFP) was announced and opened for Applications November 23, 2020. The Commission projects the Closing of the RFP, evaluation of applications, and issuance of licenses by year-end FY21. The Commission will begin the process of developing the application and issuance of licenses for Dispensaries, as well as have regulatory oversight for tracking, quality assurance laboratory testing, transportation, and facility inspections of the Class 1 and Class 2 Production Licenses issued upon the awarding of Class 1 Class 2 Production Licenses.
During the first three months, the agency's focus centered around set-up with the requisite state agency governance authorities: GBA, GTA, DOAS, Procurement, Human Resources, Budget, Information Technology, etc. The basic requirements to conduct daily business, much like an entrepreneur would have to establish, have been completed. Relationships with adjacent state agencies necessary for the Commission to conduct business have been established: Georgia Bureau of Investigations, Georgia Attorney General, Georgia Department of Public Health, Georgia Board of Pharmacy, and the Georgia Secretary of State. The Executive Director has met with almost fifty (50) cannabis industry companies to review the requirements of the law (O.C.G.A. 16-12) governing the new industry, and outlining the statutory application requirements. The Commission opened the RFP process to accept Production License applications in less than seven months.
Georgia Access to Medical Cannabis Commission 2021 Annual Report 6

Proposed Legislative Changes O.C.G.A 16-12-203(9)
[The Commission shall] "...study the provision of low THC oil in this state to determine the best practices and methods of providing such services, to determine what changes are needed to improve the provision of low THC oil, and to report any proposed legislative changes to the General Assembly each year; " O.C.G.A. 16-12-203(9)
The Commission is in the first year of operation as a state agency. The implementation of a newly enacted law combined with the emerging and developing nature of cannabis law nationwide underscore the importance of developing the Commission's statute to maintain responsiveness to the dynamic nature of cannabis governance in Georgia. As required by the Georgia's Hope Act, the Commission proposes the following legislative changes for FY22:
O.C.G.A. 1 6-12-221 (a) - Issuance Method for Licenses. The conclusion from implementation O.C.G.A. 1 6-12-221 (a) together with the Department of Law (AG) and the Department Of Administrative Services (DOAS) through the Class 1 and Class 2 Competitive Application Request for Proposals (RFP) is that the licensing process present numerous conflicts with the laws and rules of the Georgia Procurement Registry. Accordingly, after Class 1 and Class 2 Production License Request for Proposals (Georgia Procurement Registry Event ID #11232020) are issued the Commission statute should be modified to provide the Commission the statutory authority to develop process, procedures, and requirements to issue future licenses under Part 2 without going through DOAS as license contracts are not for sale or for price bid as a product or service.
Georgia Access to Medical Cannabis Commission 2021 Annual Report 7

(New legislation) Lawful Transportation and Custody of Low-THC Oil. Currently, there is no provision in Commission statute, or elsewhere in Georgia law, to provide for the lawful transport of low-THC oil. Any individual (or company) transporting low-THC oil without a Low-THC Oil Registry card, or any individual transporting more than 20 ounces of low-THC oil, if charged and convicted, would be guilty of a felony. In order for low-THC oil to be transported from Production Facility to a Dispensary lawfully, new legislation is required. Similarly, transporting low-THC oil from Production Facilities to testing laboratories is currently unlawful. The Commission will require statutory authority to develop new license and registration types as needed, to develop the requirements for the registration of individuals and vehicles to support lawful access and chain of custody for cannabis products and low-THC oil, as well as to provide information to aid law enforcement in the detection and enforcement of unlawful transport of unauthorized transportation of cannabis products.
O.C.G.A. 1 6-12-210 (c) Revenue structure. Commission statute O.C.G.A. 16-12-210 (c) currently requires the Commission to remit all fees collected to the general fund of the state treasure. This structure prevents responsiveness to the dynamic nature of cannabis governance as an emerging industry in Georgia. At a minimum, the Commission recommends modifying existing statute to provide the Commission the ability to collect and utilize retained revenue from administrative and registration fees. Additionally, the Commission fully supports the development of legislation to convert the Commission to an Authority to provide first-in-class service for patients, their families, and the cannabis industry in Georgia.
O.C.G.A. 1 6-12-200 Definition of Product. A conflict exists between the definition of Product in O.C.G.A. 16-12-200 and the language of O.C.G.A. 16-12-211 and O.C.G.A. 1 6-12-212 for Class 1 and Class 2 Production Licenses that limits production to low-THC oil only. To support patients and the industry the Commission recommends changing this definition to include low-THC oil and any product or formulation approved by the Commission.
O.C.G.A. 16-12-211(b)(11) & 16-12-212(b)(11) Bond requirement. The language of O.C.G.A. 16-12-211 and O.C.G.A. 1 6-12-212 for Class 1 and Class 2 Production Licenses limits bonding to a "cash" bond which is largely not available for business. The Commission recommends including a cannabis performance bond or other bond method approved by the Commission.
Georgia Access to Medical Cannabis Commission 2021 Annual Report 8

Production Report O.C.G.A 16-12-204(c)(2)
" The commission shall provide the information collected pursuant to this subsection for the previous calendar year in the form of a written report to the Senate Health and Human Services Committee and the House Committee on Health and Human Services no later than February 1 of each year. The commission shall also make a copy of such report available to the public by posting such report on the commission's website. " O.C.G.A. 16-12-204(c)(2)
As required by the Georgia's Hope Act, the Commission reports the following information for the preceding calendar year:
(A) The amount of low THC oil produced by the licensee during each calendar year; No low THC oil has been produced for the calendar year 2020 as the Commission received its inaugural appropriations for start up as a new state agency. The Commission opened the RFP process to accept Class 1 and Class 1 Production License Competitive Applications in less than seven months in 2020.
(B) The details of all production costs, including but not limited to seed, fertilizer, labor, advisory services, construction, and irrigation; No low THC oil has been produced for the calendar year 2020 as the Commission received its inaugural appropriations for start up as a new state agency. The Commission opened the RFP process to accept Class 1 and Class 1 Production License Competitive Applications in less than seven months in 2020.
(C) The details of any items or services for which the licensee subcontracted and the costs of each subcontractor directly or indirectly working for the licensee; No low THC oil has been produced for the calendar year 2020 as the Commission received its inaugural appropriations for start up as a new state agency. The Commission opened the RFP process to accept Class 1 and Class 1 Production License Competitive Applications in less than seven months in 2020.
(D) The amount of therapeutic chemicals produced resulting from the low THC oil manufactured pursuant to this article;
Georgia Access to Medical Cannabis Commission 2021 Annual Report 9

No low THC oil has been produced for the calendar year 2020 as the Commission received its inaugural appropriations for start up as a new state agency. The Commission opened the RFP process to accept Class 1 and Class 1 Production License Competitive Applications in less than seven months in 2020.
(E) The amounts paid each year to the licensee related to the licensee's production of low THC oil manufactured pursuant to this article; and No low THC oil has been produced for the calendar year 2020 as the Commission received its inaugural appropriations for start up as a new state agency. The Commission opened the RFP process to accept Class 1 and Class 1 Production License Competitive Applications in less than seven months in 2020.
(F) The amount of low THC oil distributed to each dispensing licensee to dispense low THC oil in this state during each calendar year. No low THC oil has been produced for the calendar year 2020 as the Commission received its inaugural appropriations for start up as a new state agency. The Commission opened the RFP process to accept Class 1 and Class 1 Production License Competitive Applications in less than seven months in 2020.
Georgia Access to Medical Cannabis Commission 2021 Annual Report 10

Minority and Women Owned Business Study O.C.G.A 16-12-214(a) and (b)
"Beginning January 1, 2022, the commission shall undertake a retrospective study of the participation of minority and women owned businesses as licensees under this part for the period from January 1, 2020, through December 31, 2021. Thereafter, the commission shall conduct such study every four years for the immediately preceding four-year period. The initial and subsequent studies conducted pursuant to subsection (a) of this Code section shall identify any proof of discrimination based on race or gender in the issuance of licenses under this part." O.C.G.A. 16-12-204(c)(2) As required by the Georgia's Hope Act, the Commission will begin the study of the participation of minority and women owned businesses as licensees issued under Part 2 of the statute in January, 2022 for the period from January 1, 2020, through December 31, 2021 and thereafter every four years: 2026, 2030, 2034, 2038, 2042, etc.
Georgia Access to Medical Cannabis Commission 2021 Annual Report 11

Strategic Plan FY20-23
GOALS
The Georgia Access to Medical Cannabis Commission will: 1) Implement rules and procedures to develop a best-in-class state level medical cannabis program; 2) Ensure efficient processes and systems for application, licensure, and renewal; and 3) Maintain safe, healthy patient outcomes through production and dispensary compliance.

MEASURES

Policy Area: Small Business Growth

Goal:

The Georgia Access to Medical Cannabis Commission will develop a best-in-class state level medical cannabis program.

Measure:

Small Business development in Rural Georgia Minority, Women, and Veteran Owned business in Georgia

Steps:

Receive, review, and process applications for licensure, and annual renewal, to ensure small business development and continuation in Tier 1 and Tier 2 counties in Georgia.

Georgia Access to Medical Cannabis Commission 2021 Annual Report 12

Monitor and review business ownership for compliance with requirements to be Georgia-owned, employing a minimum of twenty percent minorities, women, and veterans and/or a significant supply-chain component of the operation is minority women, or veteran owned.

Policy Area: Efficient Government

Goal:

The Georgia Access to Medical Cannabis Commission will ensure efficient processes and systems for application, licensure, and renewal

Measure: Develop and maintain accessible, secure communication Develop and maintain accessible and secure systems

Steps:

Implement new agency website in FY20-21 Implement new virtual call center in FY20-21 Implement new virtual meeting notification system in FY20-21 Implement new online application system in FY20-21 Implement new virtual online meeting system with streaming audio/video for improved transparency
and accessibility Review initial applications for Class 1 and Class 2 production licensure and annual renewal within 60
days, with a processing goal of 30 days Open production licenses that are transferred, not renewed, revoked or otherwise not Active within 90
days for application

Georgia Access to Medical Cannabis Commission 2021 Annual Report 13

Policy Area: Health and Safety

Goal:

The Georgia Access to Medical Cannabis Commission will maintain safe, healthy patient outcomes through production and dispensary license compliance with the law.

Measure:

Regular monitoring of production operations and dispensing Annual and random quality assurance testing Process and investigate complaints

Steps:

Select, establish, and maintain seed-to-sale tracking system(s) Select, establish and maintain laboratory quality assurance testing Monitor seed-to-sale data on a monthly basis and investigate discrepancies in chain of custody. Monitor quality assurance reports Coordinate with the Georgia Bureau of Investigation and the Georgia Drugs and Narcotics agency, as
well as local law enforcement for annual chain of custody and quality assurance inspections Conduct annual oil quality assurance and operations inspections

*** END OF ANNUAL REPORT*** (ATTACHMENTS FOLLOW)

Georgia Access to Medical Cannabis Commission 2021 Annual Report 14