How emergency regulations have put Nebraska's medical cannabis industry 'in limbo'

What they haven’t seen is anything that looks like an application, leaving them — as Ogallala hemp farmer Dustin Krajewski put it — “in limbo” despite 71% of voters legalizing medical cannabis last year.

“We can’t figure out what to do about submitting applications or how do we help move the industry forward. And so it’s just really confusing,” Krajewski said.

The Medical Cannabis Commission meets Monday afternoon in Lincoln, and Krajewski hopes things are clearer after. At the commission’s meeting in late June, commissioner Bruce Bailey said he and other members only had those regulations for about 12 hours prior to voting on them. But they had to approve something to comply with state law. Bailey said the regulations allow for applicants to prepare materials and make sure they’re in line with the rules.

But those rules are only effective through Sept. 28 and subject to change — the commission pledged it would take public feedback into account for permanent regulations.

Krajewski is hoping the commission will make adjustments. Brett Mayo, chief extraction officer of Sweetwater Hemp in Pleasanton, said he’d also like to see changes. But the state has not followed “what the people voted for” in the months since medical cannabis was legalized, Mayo said, so he doesn’t expect any different now and is ready to work with the rules as they exist.

Monday’s agenda includes discussion of statutes, review of the budget, voting on use of funds from the Liquor Control Commission to hire staff and reviewing research on “flavorings, effects of cannabis use during pregnancy and smoking.” The commission has also set up a website, where the emergency regulations are posted, and has its own email address (it had to use the Liquor Control Commission’s address to receive comments throughout July).

The commission has five members. Three serve because of their role on the Liquor Control Commission. Two, anesthesiologist Monica Oldenburg and addiction prevention specialist Lorelle Mueting, were appointed specifically to the Medical Cannabis Commission, and both previously advocated against bills to legalize the medicine. They agreed to work on regulations in the time between meetings and also received help with legal services, research assistance and policy drafting from the Department of Health and Human Services and the Governor’s Policy Research Office.

The commission is also hamstrung because it doesn’t have much money. It’s allocated only $30,000 for hiring staff and doesn’t have other revenue streams right now. Its only option is to borrow money from the Liquor Control Commission.

The Medical Cannabis Commission must begin approving successful applicants by Oct. 1.

Several people at a June meeting shared concerns with limiting the state to one dispensary in each of 12 judicial districts and outlawing smoking. The ballot initiative, which is now state law, says it’s legal to possess or use accessories to inhale or otherwise ingest medicinal cannabis.

Mayo said he’s asked questions via email and hoped to get clarity on applying, but there’s not a form for him to fill out and he’s not heard back. The other hemp industry professionals he’s spoken with have relayed similar experiences to him.

The emergency regulations “aren’t bad, but they also aren’t good,” Mayo said.

He likes that the system doesn’t allow for vertical integration — meaning a company can only have one license to cultivate, manufacture, transport, or dispense products — and has safeguards to promote homegrown Nebraska businesses’ ability to participate. That protects smaller operations from being overwhelmed by “big marijuana” in other states that have more funds and infrastructure, he said.

Krajewski said rules on vertical integration need tweaking. Transporting products should not be a different license, he said, predicting it would be a hassle for cultivators, manufacturers and dispensers to find a partner just to drive product around. He agreed with protecting against big companies taking over the industry but also said there should be room for a business to have multiple licenses, like a manufacturer could also dispense its product, if it has a storefront.

Krajewski also doesn’t like rules outlawing flavors. Referencing a comment from Gov. Jim Pillen that the medicine should “taste like crap,” Krajewski said, “just because it’s medicinal marijuana doesn’t mean that it has to taste bad.”

He and Mayo said the state should not prohibit smoking, saying it’s fast-acting and a valid medicine for certain conditions. Public smoking is already prohibited, so patients using medical cannabis couldn’t use it in public anyway, Mayo said.

The two predicted that the state’s trajectory would make way for a recreational marijuana ballot initiative that draws big dollars in support and opposition. Krajewski said recreational legalization is “fine with me,” but he knows many officials in the state don’t want that.

“I feel like they’re causing their own problem,” he said.