Louisiana moves to privatize medical marijuana cultivation

The Louisiana Legislature approved a bill that would end the exclusive rights of two public universities to cultivate medical marijuana in the state, paving the way for private contractors to take over the nascent southern market.

Senate Bill 228, sponsored by Covington Republican Sen. Patrick McMath, passed both chambers with little opposition and now awaits the signature of Gov. Jeff Landry, according to the Louisiana Illuminator. If enacted, the measure would transfer the state’s two medical marijuana grower licenses from Louisiana State University and Southern University to the private companies that currently operate the schools’ cannabis farms.

Since Louisiana launched its medical marijuana program in 2015, the law has required that only LSU and Southern hold cultivation licenses. The universities partnered with Good Day Farm and Ilera Holistic Healthcare, respectively, to establish their growing operations.

Under the bill, Good Day Farm and Ilera would assume ownership of the licenses and be allowed to renew them annually. No other companies would be permitted to apply for the licenses unless one of the two firms relinquishes theirs.

Critics argue the legislation would further entrench Good Day Farm’s dominant position in Louisiana’s tightly controlled medical marijuana market, the outlet reported. The company, whose primary shareholder is wealthy Republican donor Donald “Boysie” Bollinger, has produced far more cannabis than Ilera and is poised to corner the industry if the federal government reclassifies marijuana as a Schedule III controlled substance, as the Biden administration has proposed.

“It’s a monopoly,” said former state Rep. Joe Marino, who helped shape much of Louisiana’s medical marijuana policy.

During his time in office, Marino unsuccessfully pushed to expand the number of cultivation licenses to boost supply and reduce prices for patients at the state’s 10 licensed dispensaries.

McMath said during a March committee hearing that the medical marijuana program was always intended to be a private industry; involving the universities was a last-minute addition to the getting legislation past the finish line in 2015.

“It was never really their intention to be put into this bill,” he said at the time.

LSU and Southern will not receive any further revenue from medical marijuana sales if the bill is signed into law. A previous version would have granted the schools a percentage of the companies’ gross receipts, but that provision was removed.

As Louisiana moves to fully privatize medical marijuana cultivation, state lawmakers are simultaneously working to unwind the hemp industry they inadvertently created in 2021. That legislation, Senate Bill 237, would ban products that contain intoxicating levels of THC derived from hemp.