Cannabis Business in Alabama

Alabama's medical cannabis industry is still taking shape. In 2024, the Alabama Medical Cannabis Commission (AMCC) issued licenses for businesses involved in cultivation, processing, transportation, testing, and retail dispensaries, marking significant progress in building the state’s cannabis infrastructure. The application period for these licenses closed on December 30, 2022. The AMCC met on December 1 and 12, 2023 to award licenses for these businesses, as well as for integrated facilities.

Types of Cannabis Businesses in Alabama

Alabama’s cannabis market is composed of two main categories:

Direct Cannabis Businesses

These businesses engage directly with cannabis and are governed by strict state regulations. Examples include:

• Cultivators: Manage indoor and outdoor cannabis farming operations. A maximum of 12 cultivator licenses were to be awarded by the AMCC. Cultivators are authorized to sell or transfer cannabis to a processor, or, if they contract with a processor, they can sell or transfer medical cannabis to a dispensary.
• Processors: Create oils, concentrates, and other products from raw cannabis. Only 4 processor licenses were to be awarded. Processors can purchase or transfer cannabis from a cultivator, process it into medical cannabis, and sell or transfer medical cannabis to a dispensary.
• Dispensaries: Licensed retailers sell products to registered patients. The AMCC planned to award a maximum of 4 dispensary licenses, with each licensee able to operate up to 3 dispensing sites. Dispensaries can purchase or transfer medical cannabis from processors, cultivators who contract with processors, or integrated facilities.
• Testing Facilities: Ensure cannabis safety and quality before sale. There is no limit on the number of state testing laboratory licenses that can be issued. These licensees can possess and test cannabis and medical cannabis products from licensed facilities.
• Transporters: Securely move cannabis and cannabis products between facilities. There are no limits on the number of secure transporter licenses. These licensees can store and transport cannabis and medical cannabis for a fee at the request of a licensee. They are not authorized to transport to registered qualified patients or registered caregivers.

Integrated facilities are also licensed in Alabama. No more than 5 of these licenses were to be awarded, and each licensee can operate up to 5 dispensing sites. Integrated facilities can cultivate and process cannabis, dispense and sell medical cannabis to patients and caregivers, transport cannabis and medical cannabis between their facilities, and sell or transfer medical cannabis to a dispensary.

Cannabis Industry Support Businesses

These companies support the cannabis industry without handling the plant directly. Examples include:

• Financial Services: Provide specialized banking, payment processing, and loans for cannabis businesses.
• Legal Advisors: Help businesses navigate state licensing and compliance requirements.
• Consultants: Assist with market strategy, operations, and compliance.
• Insurance Providers: Offer coverage for business liability, facilities, and employees.
• Technology Providers: Deliver essential software for inventory tracking, payment systems, and security.
• Marketing Firms: Create compliant branding strategies tailored to the cannabis industry.

Additional Support Services

Other essential services in Alabama include packaging design, advocacy groups for industry representation, and analytics providers to help optimize operations and ensure compliance. This emerging market offers opportunities for businesses across both direct and indirect sectors, creating a dynamic industry framework.

Local Regulations

The AMCC will not allow a dispensary to operate in a municipality or county unless that municipality or county has passed a resolution or ordinance authorizing the operation of dispensing sites. The AMCC has received resolutions or ordinances from numerous cities and counties in Alabama.

Important Notes:

• The AMCC charges various fees for applicants and licensees, including application fees, licensing fees, and annual renewal fees.
• Applicants and licensees are required to submit various forms and documentation to the AMCC.
• The AMCC has made public comments on the medical cannabis program available.