Tuesday, November 21, 2017

Medical Law to Oversee Cannabis Revenue in Puerto Rico

By on March 1, 2017

SAN JUAN – There aren’t many novel aspects included in Senate Bill 340 when compared with the Health Department’s Regulation 8766, which sets forth the legal framework to regulate the cannabis industry in Puerto Rico.

However, the legislation brings to light concerns about how the revenue generated from medical cannabis will be managed, especially following stateside reports of substantial revenues registered from that industry.

Moreover, the bill aims to prevent that industry from being used for money laundering or as a pretext to sell controlled substances, such as cocaine and heroine. Thus, the legislation is supported by strict federal regulation on the management of this cash flow, establishing guidelines regarding the management of resources related to the industry’s financial activities.

BERKELEY, CA - MARCH 25: One-ounce bags of medicinal marijuana are displayed at the Berkeley Patients Group March 25, 2010 in Berkeley, California. California Secretary of State Debra Bowen certified a ballot initiative late Wednesday to legalize the possession and sale of marijuana in the State of California after proponents of the measure submitted over 690,000 signatures. The measure will appear on the November 2 general election ballot. (Photo by Justin Sullivan/Getty Images)

One-ounce bags of medicinal marijuana are displayed at the Berkeley Patients Group March 25, 2010 in Berkeley, California. (Justin Sullivan/Getty Images)

“The financial industry must exert its responsibilities with due diligence with respect to its client’s activities. As such, the Department of Treasury Financial Crimes Enforcement Network (FinCEN) issued guidelines to clarify expectations under the Bank Secrecy Act (BSA) for financial institutions that want to provide services to businesses related to marijuana,” S.B. 340 reads.

Another justification in the bill is that the Health Department regulation doesn’t have the legal tools to address possible criminal activity within the industry, since marijuana possession is still illegal under federal law.

Although a valid justification, since the Health Department’s role is to establish public policy and not to enact punishment, Ruling 8766 indicates it was established by taking into account local laws on the matter. The ruling states it was created in accordance to Act 81 of 1912, known as the Health Department Act, which enables the agency to act on matters concerning public health; the Puerto Rico Controlled Substances Act; and Act 170 of 1988, known as the Uniform Administrative Procedure Act.

However, the Senate’s bill only mentions federal statutes that address the issue, omitting local laws.

See also: Charbonier House Points Out Gaps in Puerto Rico Medical Cannabis Ruling in

The bill also emphasizes that former Gov. Alejandro García Padilla‘s executive order was a “reckless course of action,” while assuring that “from the perspective of substantive Administrative Law, Executive Order 2015-010 was limited in requiring the participation of only one expert, when the act to allow medical cannabis required intervention from multiple expert entities.”

To address these needs, the medical law proposes to establish the Medical Cannabis Regulatory Board (MCRB) to enact the law’s purposes and decrees, which include to settle which medical conditions should be included under the law’s decrees, methods to administer medical cannabis, the maximum amount of time per condition under which a medical recommendation can remain active, and methods to detect the substance.

However, the bill contradicts itself by saying the MCRB will comprise the following five members: the secretaries of the Health, Agriculture, Economic Development & Commerce and Treasury departments, as well as an official designated by the governor. Of these, Health Secretary Rafael Rodríguez Mercado, a neurosurgeon, is the only official with the expertise to analyze the conditions that could be treated with cannabis.

Some have raised concern that the bill states the MCRB will have the faculty to enter into contracts “with any person, firm or corporation for consultations or advise.” This leads to question why the government doesn’t simply use the Health Department’s existing resources for this purpose, especially amid a fiscal crisis.

In addition, it is questionable to generalize treatment with medicinal cannabis, since every patient presents a different background and needs to be treated individually.

One of the most common uses for medical cannabis in other jurisdictions is to treat conditions in minors, such as epilepsy, because cannabis isn’t linked to secondary health effects, unlike lab-developed drugs.

Nevertheless, in its Article 8, S.B. 340 establishes that “no person under the age of 21 may enter a dispensary,” but does not state whether it will be allowed to be used by minors in an another location, such as their residence.

See also: Medical Cannabis Association Favors New Regulatory Bill

Although the legislation seeks to fill possible gaps left behind by Regulation 8766, as it doesn’t address legal concerns that could arise in the industry,it does regulate nearly all aspects involving the use, possession, growth, manufacture, dispensation, distribution and research into medical cannabis.

S.B. 340 doesn’t state the reason why it intends to repeal the Health Department’s ruling, save for some indications in its exposition of motives, which limits to categorize Executive Order 2015-010 as a judgement error by the past administration.

 

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