230-80-05 R.I. Code R. § 1.2

Current through November 23, 2023
Section 230-RICR-80-05-1.2 - Compassion Center Application, Licensing and Renewals
A. R.I. Gen. Laws § 21-28.6-12(c) authorizes DBR to promulgate regulations regarding compassion center applications and licensure.
B. Compassion Center Application Period and License Application Timeline
1. Applications for compassion centers may only be submitted to DBR for consideration during an open application period announced by DBR. Open application periods will only be announced upon the availability of a compassion center license such as may be due to an expansion in the limit of available licenses, the failure of a qualified applicant to be selected through the application process as described in § 1.2(E)(6) of this Part, or the failure of a selected applicant to satisfy licensing requirement(s) of the Act or the DBR Regulations, or the event of the revocation, relinquishment, or expiration without renewal of an existing compassion center license, as provided in R.I. Gen. Laws §§ 21-28.6-12(b)(7)(ii), 21-28.6-12(b)(8), and 21-28.6-12(d)(3).
C. Application for Compassion Center License
1. Pursuant to R.I. Gen. Laws § 21-28.6-12(c)(3) and as reflected in the application materials, DBR shall evaluate the overall health needs of qualifying patients and safety of the public including analysis of patient enrollment and location data, patient caregiver data, the location of existing compassion centers, municipalities where compassion centers are permitted or prohibited under local zoning, comments submitted by the public, and input solicited from registered qualifying patients, registered primary caregivers, and municipalities to determine license areas or "application zones" where new compassion centers shall be licensed. The number of zones, the geographic boundaries of each zone, and the number of compassion centers permitted in each zone are set forth in § 1.15 of this Part and were determined by DBR after conducting this analysis and taking into consideration all public comments and input.
2. An applicant who applies for a compassion center license may only submit one application per zone. A person or entity cannot be an interest holder with respect to more than one applicant/application for a compassion center license per zone. An applicant may apply for a license in more than one zone provided, however, that if an applicant is selected for a license in more than one zone, the applicant must select a single zone in which the applicant will proceed with licensing in accordance with § 1.2(E) of this Part. Another applicant will then be selected for the zone or zones which were not selected. Applicants who apply in more than one zone must submit a separate application and separate application fee for each zone they apply to and indicate in each application all applications it has submitted and in which zones.
3. DBR will evaluate applications based upon the information provided by applicants on the application forms/submissions and otherwise obtained during the application process.
4. Each application for a compassion center shall be on such forms and through such submission mechanisms as designated by DBR and shall include, but not be limited to the following:
a. A non-refundable application fee of $10,000. R.I. Gen. Laws § 21-28.6-12(c)(1)(i).
b. The applicant's legal and any d/b/a name(s), certificate of incorporation under R.I. Gen. Laws § 7-6-36 or certificate of authority under R.I. Gen. Laws § 7-6-70, copies of articles of incorporation and bylaws, and, if applicable, documentation of recognition as a tax-exempt organization by the US Internal Revenue Service.
c. A business plan, including:
(1) Applicant's experience running a non-profit organization or other business, and applicant's experience running a medical marijuana business, as applicable;
(2) Detailed description of amount and source of equity, debt and operating capital for the proposed compassion center, including financial statements or other documentation establishing the source of any funds;
(3) Start-up funding and long-term financial feasibility plan;
(4) Detailed timeline for initiating operations;
(5) Funds for capital improvements and operating needs;
(6) Financial capability;
(7) Financial oversight and compliance plan;
(8) Services for hardship patients and charity care;
(9) Three (3) year projected income statement;
(10) Number and category description of FTEs (full time equivalents) and associated payroll expenses (with benefits) required for staffing;
(11) Description of products and services;
(12) Marketing, promotional and sales plan including pricing strategy;
(13) Industry and market assessment and analysis; and
(14) Segment and customer profile.
d. A Security and Safety Plan, in accordance with R.I. Gen. Laws § 21-28.6-12(c)(1)(vi), which specifies how the applicant will ensure security and safety at the licensed premises, including but not limited to:
(1) Description of security equipment, including hardware, software applications and compliance with industry standards and specifications;
(2) Third-party vendors;
(3) Standard operating procedures;
(4) Cash management and/or electronic payment processing, as applicable; and
(5) Confirmation of secured deposit banking account, or proposed plan to obtain such account prior to the beginning of licensed activities.
e. An Operations Manual for the compassion center including policies, procedures and documents for the following:
(1) Record keeping and records retention;
(2) Education and training of employees and volunteers;
(3) Job descriptions, employment contracts and volunteer agreements, if applicable;
(4) Patient and personal data privacy;
(5) Patient confidentiality, education, counseling and outreach;
(6) Alcohol and drug free workplace;
(7) Assuring steady supply for patients;
(8) Labeling and packaging;
(9) Advertising;
(10) Voluntary and mandatory recalls of medical marijuana products, including recalls due to any action initiated at the request or order of DBR, and any voluntary action by a licensed cultivator or compassion center to remove defective or potentially defective medical marijuana from the market, as well as any action undertaken to promote public health and safety;
(11) Ensuring any outdated, damaged, deteriorated, mislabeled, or contaminated medical marijuana is quarantined from other medical marijuana and destroyed;
(12) Environmental impact overview and plan for operations; and
(13) Process validation for all smokable and vapable products, as applicable.
f. The proposed physical location of the compassion center by plat and lot number, street address and zoning district. This may also include one additional location proposed to be used for the secure cultivation of medical marijuana subject to §1.6.4(A) of this Part. Regarding the proposed physical location(s), the applicant shall submit:
(1) Evidence of compliance for the location(s) with the local zoning laws in the form of a certificate or letter from an authorized zoning official.
(2) Evidence that the physical location is not located within one thousand feet (1,000') of the property line of a preexisting public or private school in compliance with R.I. Gen. Laws § 21-28.6-12(f)(2). For the purposes of this paragraph, "private school" shall be deemed to refer to any nonpublic institution of elementary or secondary (K-12th Grade) education, accredited or recognized as a private school by the department of elementary and secondary education or the school committee of the city or town having jurisdiction over private schools. For purposes of this paragraph, the 1000-foot distance shall be measured from the secured compassion center premises, which shall include allotted outdoor areas (such as parking and loading areas), to the property line of the school, which shall include the school building, land, and appurtenances.
(3) A draft diagram of the proposed facilities, including where within the facility the medical marijuana will be stored, processed, packaged, manufactured and dispensed, and where security alarms and cameras and surveillance recording storage will be located, patient access areas, limited access areas, patient parking capacity and access for persons with disabilities in accordance with applicable law, and showing the location of the facility relative to streets and other public areas.
(4) A description of objective parameters (such as distances from streets and public areas) and/or proposed measures (such as black-out window shades) that ensure that marijuana at the premises shall not be visible from the street or other public areas.
(5) Documents evidencing either ownership of property or lease agreement with owner of property to allow the operation of a compassion center on the property, if property has already been purchased or leased at the time of the application or a signed letter of intent for such a sale or lease.
g. A certification regarding nonprofit compliance as required in DBR's application form which includes the following certifications and information as to status and any existing and/or proposed:
(1) Nonprofit status and operation;
(2) Management companies, vendors and contracts;
(3) Related party transactions;
(4) Real estate and equipment transactions;
(5) Compensation of officers, directors and employees; and
(6) Revenue and profit-sharing arrangements.
h. A disclosure and certification as to owners and other key persons/interest holders as required in DBR's application form and including certifications, disclosures and information regarding:
(1) All persons and entities with ownership interests;
(2) All officers, directors, members, managers and agents;
(3) All persons or entities with managing or operational control;
(4) All investors or other persons or entities with any financial interest;
(5) All persons or entities with interests arising under management companies or agreements or other agreements that afford third-party managerial or operational control;
(6) If the compassion center premises and/or other operational assets will be owned or leased by a person or entity other than the applicant, the legal name and current address of such person or entity and a list of all persons or entities (legal names and current addresses) having any ownership or financial interest in such entity, whether direct or indirect; and
(7) The legal names and current addresses of all creditors that will loan money to, finance and/or hold a security interest in the premises and/or other assets to be used in the compassion center operations, if any.
i. If any key person/interest holder identified in § 1.2(C)(4)(h) of this Part has a material financial interest or control in another compassion center, cultivator, cooperative cultivation or other marijuana establishment licensee as determined by DBR, that key person/interest holder must disclose that interest in the application form and include a plan of divesture in accordance with § 1.2(F)(7) of this Part; provided that if it is a licensed cultivator that is pursuing licensure in accordance R.I. Gen. Laws § 21-28.6-12(b)(10), then disclosures must be made in accordance with that section of the Act.
j. If a compassion center will have a management agreement in place, it shall also include a copy of the management agreement or management agreement proposal and a list of persons who have any ownership or financial interest in or operational or managerial control over the management company.
k. An organization chart and schedule of compensation/remuneration as required by DBR's application form.
l. Evidence of appointment of a compliance officer for the compassion center and the compassion center's legal and operational compliance plan.
m. Licenses, disciplinary actions, denials of applications, including:
(1) Disclosure and description of any applications, licenses or registrations made or held by the applicant and/or interest holders/key persons thereof in any state, municipality, county, province, district, country or territory's cannabis or medical marijuana program.
(2) A disclosure, description and copies of any withdrawals, denials, suspensions, revocations, consent orders/agreements and/or other enforcement or regulatory actions as to the applicant and/or interest holders/key persons thereof by any state, municipality, county, province, district, country or territory's in connection with the matters disclosed in § 1.2(C)(4)(m) ((1)) of this Part or any other licensed or unlicensed cannabis related activity.
n. Tax Affidavit in accordance with R.I. Gen. Laws § 5-76-1 et seq.
o. Other written materials which will allow DBR to determine the compassion center's ability to comply with the review criteria contained in R.I. Gen. Laws § 21-28.6-12(c)(3).
p. All other information required by DBR as described in the application form.
5. Only applications which DBR has determined to be complete (i.e., which satisfy all applicable application requirements including but not limited to those above) shall be eligible and accepted for further evaluation and review. Incomplete applications will be deficient and will not be considered further and the application fee will not be refunded.
D. Compassion Center Application Review Criteria
1. The Department shall review complete applications and information otherwise obtained during the application process utilizing the criteria specified in R.I. Gen. Laws § 21-28.6-12(c)(3) of the Act and § 1.2 of this Part in order to determine whether an application is qualified.
2. If an applicant seeking a license to operate a compassion center is notified that its application has been deemed "qualified" by DBR, it shall be eligible for selection in accordance with § 1.2(E) of this Part.
3. In determining whether an applicant is "qualified," DBR shall determine whether such information adequately demonstrates an ability of the applicant to satisfy licensing requirements and compliance with the Act and program regulations.
E. Application Selection Process
1. Once DBR completes its review of all applications, DBR will notify all qualified applicants and publicly announce the date, time, and manner of randomly selecting qualified applicants for approval in each available zone.
2. DBR will publicly post the names of the qualified applicants for each zone. A random drawing to select the licensee(s) in each zone will be held in a manner that can be observed by the public. A duly authorized representative of all qualified applicants shall attend the random selection in person. The authorized representative of any qualified applicant which has applied for a license in multiple zones must be present and prepared at the time of the drawing to select and commit to a single zone if the applicant is selected for more than one zone.
3. DBR will select a qualified applicant for each available zone. After the qualified applicant(s) have been selected for each available zone, any applicant selected for multiple zones must accept a single zone and reject the other zones. After each applicant, if any, which has been selected for multiple zones accepts a single zone and rejects all others, another applicant will be drawn and selected for any rejected zone(s). This process shall continue until there is a separate and distinct qualified applicant selected for each available zone. Once a zone selection has been made, the decision is final and cannot thereafter be amended or altered. Any applicant selected for multiple zones who chooses which single zone they would like to be licensed in, may not thereafter alter that decision or change zones at any time.
4. The selected applicants shall not change or alter their proposed location to another location within the same zone without prior DBR approval. A selected applicant may not relocate or change the proposed location outside of the zone for which they were selected.
5. The selected applicants shall be deemed approved conditionally, subject to satisfaction of all requirements for final licensure.
6. If at the conclusion of the selection process there are any available zones which have not been awarded to, or selected by, a qualified applicant, and if there are no more qualified applicants for those zones to select from, DBR may reopen the application period and accept applications for any unawarded or unchosen zones and repeat the application, review, and selection processes in accordance with § 1.2 of this Part, and may do so without repeating or revising the analysis which was previously conducted under § 1.2(C)(1) of this Part.
F. Prerequisites to Issuance of Compassion Center License and Commencement of Operations
1. Upon notification by DBR, the approved applicant must take reasonable and documented efforts to complete the prerequisites for issuance of the license. If satisfaction of all requirements for licensure takes longer than nine (9) months, the approved applicant must show good cause to DBR why additional time should be granted and the application approval should not be rescinded.
2. Once the license has been issued by DBR, the compassion center must take reasonable and documented efforts to launch compassion center activities, which for purposes of this paragraph shall mean actual acquisition and dispensing of medical marijuana pursuant to the Act. If commencement of such activities takes longer than three (3) months, the compassion center must show good cause to DBR why the license should not be revoked for non-use.
3. Any compassion center applicant selected for licensure in accordance with § 1.2(E) of this Part must satisfy the below requirements before a license authorizing operation of a compassion center will be issued:
a. Annual Compassion Center Registration Fee: The annual license fee set by R.I. Gen. Laws § 21-28.6-12(c)(5)(ii) of five hundred thousand dollars ($500,000) must be paid.
b. Final Information and Documentation to be Supplied - The applicant must provide any updates to previously submitted application information and the following additional items to DBR:
(1) Unless already provided with the application, documents confirming ownership or executed lease agreement as to the compassion center premises.
(2) Evidence of full compliance of the facility with the local zoning laws in the form of a certificate or letter from an authorized zoning official of the municipality and certification by an authorized officer of the applicant as to compliance with any other applicable local ordinances.
(3) A current Certificate of Occupancy (or equivalent document) to demonstrate compliance with the relevant provisions of R.I. Gen. Laws Chapters 23-28.1 and 23-27.3 [Fire Safety Code and State Building Code, respectively] for each physical address to be utilized as a compassion center or for the secure cultivation of medical marijuana, if applicable.
(4) Updated interest holder/key person disclosure and updated certification of nonprofit status and compliance pursuant § 1.2(C)(4) of this Part.
(5) Evidence of completion of divestiture plan pursuant to § 1.2(F)(7) of this Part.
(6) If there are any material deviations from the approved application, the applicant must submit a request for and obtain a variance from DBR. DBR may deny the variance in its sole and absolute discretion.
(7) In the event the applicant holds a cultivation license that will merge into the compassion center license pursuant to R.I. Gen. Laws § 21-28.6-12(b)(10), the applicant shall provide to DBR a certificate from the Rhode Island Secretary of State as to articles of merger of the cultivator license holder entity into the applicant entity or certified articles of dissolution of the cultivator entity, and such other documents evidencing the merger and/or transfer of assets and operations as required by DBR.
(8) Evidence that the applicant has acquired a seed to sale Medical Marijuana Program Tracking System and all necessary equipment and software to implement tracking.
4. Submission of proposed activities or functions in an application by an applicant who is selected for a license does not guarantee or authorize approval for that applicant to conduct all proposed activities or activities in the manner or method proposed.
5. In accordance with R.I. Gen. Laws § 21-28.6-12(f)(5):
a. The applicant must schedule an on-site inspection of the compassion center with the RISP to inspect the facility's security.
b. The compassion center may be required to make any RISP or DBR recommended changes regarding the security or operations of the facility and its personnel prior to commencing licensed activities.
c. Nothing herein shall limit DBR's authority to require a licensee to implement additional security and safety recommendations from RISP or DBR in the future.
6. DBR Pre-License Inspection
a. Before a compassion center license will be issued, a DBR inspection is required. Approved applicants should contact DBR to coordinate said inspection. Nothing in this paragraph should be construed as limiting inspections at an earlier time in addition to the final pre-license inspection.
7. Divestiture of Prohibited Material Financial Interest and Control
a. A compassion center and interest holders/key persons thereof may not have any "material financial interest or control" in another Rhode Island compassion center, a cultivator, or a licensed cooperative cultivation or vice versa. R.I. Gen. Laws §§ 21-28.6-12(b)(1)(ii) and 21-28.6-12(d)(5)(v).
b. R.I. Gen. Laws § 21-28.6-12(f)(10) authorizes regulations regarding testing of medical marijuana and marijuana product cultivated and/or manufactured by compassion centers, which will include ensuring the independence of cannabis testing laboratory. A compassion center may not have any material financial interest or control in a Rhode Island DOH-approved cannabis testing laboratory and vice versa.
c. If a compassion center application is approved, and any prohibited material financial interest or control has been identified by DBR or is otherwise known to the compassion center applicant, such interest or control must be divested prior to issuance of the compassion center license and in any event no later than thirty (30) days following DBR's notification of the requirement to divest. The plan of divestiture and documents evidencing completion of plan shall be filed with DBR. In the event an applicant or licensee failed to disclose a prohibited material financial interest, the applicant must demonstrate to DBR why the application should not be denied, or the license revoked for failure to disclose this prohibited interest.
d. In addition to required disclosure in the application, the duty to disclose and divest prohibited material financial interests and control is a continuing obligation of the applicant and of licensure.
8. Registry Identification Card Requirements
a. Before commencement of operations, all owners, members, officers, directors, managers, agents, employees, and volunteers of the compassion center must apply for a registry identification card. All persons required to apply for a compassion center registry identification card, except employees and volunteers, shall submit to a national criminal background check as provided in § 1.4 of this Part. Such individuals may be hired, appointed, or retained prior to receiving a registry identification card, but may not begin operations or work in medical marijuana cultivation, storage, processing, packaging, manufacturing, transport, dispensing or other medical marijuana activities requiring licensure pursuant to the Act until receipt of the card.
G. DBR Post-License Inspection of Operations and Inventory
1. After the compassion center license is issued, the compassion center shall apply to DBR to source inventory in accordance with §1.6.4(B) of this Part.
2. After the compassion center obtains inventory but prior to conducting retail sales, the compassion center shall schedule and pass an inspection with DBR.
3. DBR may conduct a post-licensure inspection upon commencement of operations, including but not limited to inspection for compliance of medical marijuana and marijuana product inventory with the tagging and tracking requirements set forth in §§ 1.6.1 and 1.6.2 of this Part. Nothing in this paragraph shall be construed to limit DBR's general inspection powers as delineated in § 1.13(A) of this Part.
4. DBR shall have the right but not the obligation to notify a compassion center's banking institution of any non-compliant activity, violations and/or enforcement action(s) taken by DBR.
H. Prohibited Business Relationships with Medical Practitioners
1. R.I. Gen. Laws § 21-28.6-12(d)(5)(iv) prohibits compassion center license holders or any cardholders under the license from entering into a business relationship with any medical practitioner who provides written certifications of qualifying patients' medical conditions in connection with Rhode Island's Medical Marijuana Program.
2. Prohibited business relationships include but are not limited to:
a. Employment;
b. Fee splitting;
c. Referral or similar fees;
d. Cost sharing;
e. Subsidies or reimbursement; and f. Any other similar business or financial relationships with a practitioner or any affiliated persons or entities who provide or otherwise facilitate patient certifications to Rhode Island residents, whether directly or indirectly, including through another medical marijuana program license.
3. Pursuant to § 1.13 of this Part, DBR may review and audit the books and records of licensees to ascertain compliance with the Act and Regulations. Any compassion center licensee which has or whose cardholders have prohibited business relationships in violation of the Act may be subject to enforcement proceedings including revocation of licensure by DBR.
I. Variance Requests - Changes in Licensed Premises, Activities, Ownership and Control
1. A license authorizing operation of a compassion center shall not be assigned or otherwise transferred to other persons or locations.
2. The compassion center has a continuing obligation to update, amend and/or correct any information requested and/or submitted to DBR during the application process or following licensure.
3. The compassion center must seek pre-approval from DBR by means of requesting a variance for all material changes to the submitted and/or approved compassion center application or any materials, operations or plans approved thereafter by DBR. DBR may deny the variance if it determines that such variance will cause harm to public health and safety or cause the applicant to be in violation of the Act or any regulations promulgated thereunder, or otherwise would have caused the licensee to not have qualified for licensure originally.
4. A compassion center shall submit to DBR a written request for a variance for any proposed change described below at least sixty (60) calendar days prior to the proposed effective date of the change:
a. Proposed change in ownership of the compassion center;
b. Proposed change in the membership of a board of directors or board of trustees;
c. Proposed change in corporate officer;
d. Proposed merger, dissolution, entity conversion or amendment of corporate organization;
e. Proposed entering into a management agreement, changing management companies, and/or material changes to an existing management agreement;
f. Proposed changes to the approved premises or location;
g. Proposed changes in the interest holder/key person disclosure and certification or certification of nonprofit compliance, including but not limited to investors and financiers, and anyone else required to be disclosed in those forms;
h. Proposed changes to approved premises floor plan:
(1) The compassion center must include in its variance request a renovation plan that specifically addresses quality control procedures for the protection of medical marijuana and medical marijuana products from any contamination during the construction process and further address any other criteria DBR requires;
i. Proposed expansion/modification of the premises, including expanding or modifying the scope or scale of approved and/or licensed activity:
(1) Any request to expand or modify the premises, scope or scale of approved and/or licensed activity further requires that the request to expand be justified by the projected needs of qualifying patients as determined by DBR. See R.I. Gen. Laws § 21-28.6-12(i)(1).
j. Proposed changes to security and safety plans, operations manual and business plans;
k. Change of status of applications, licensure or disciplinary or enforcement activity in other jurisdictions; and l. Any other changes requiring a variance as determined by DBR.
5. All variances must be approved by DBR, provided however that no variance which affects a majority change in ownership, control, financial interest and/or compensation/remuneration will be approved in the first year of licensed activities, except upon DBR's determination that public health, safety or welfare requires such variance.
6. As to any proposed change of ownership or to a management agreement that will effect a change of majority control and/or decision-making authority with respect to the operation of the compassion center or as to any proposed change in an approved premises location for the cultivation and/or sale of medical marijuana, DBR may require the compassion center to submit a new application, which may include a new application fee and/or hearing.
7. Unless the compassion center provides timely notice of the above changes and receives a variance issued by DBR or a DBR waiver of the requirement of prior notice and issued variance, the license shall be void and returned to DBR.
8. Change in contact information:
a. The compassion center shall notify DBR in writing within ten (10) days of any changes in the licensee's mailing addresses, email addresses, phone numbers, or any other changes in contact information reported on the most recent initial/renewal application. Note that a change in business address/location is subject to the pre-approval variance requirements in § 1.2(I)(4) of this Part.
J. Discontinuance of Business Operations
1. The license shall be void and returned to DBR if the compassion center discontinues its operation, unless the discontinuance is on a temporary basis and approved by DBR.
K. Annual Renewal
1. Compassion center licenses shall be issued for one-year terms.
2. Annual renewals shall be submitted on such forms and include such information as required by DBR.
3. Pursuant to R.I. Gen. Laws § 21-28.6-12(d)(2), DBR's review of compassion center renewal applications shall include consideration of whether the compassion center is adequately providing patients with access to medical marijuana at reasonable rates.
4. An annual inspection shall be part of the annual renewal process.
5. Renewal applications shall include an updated certification of nonprofit compliance and an interest holder/key person disclosure and certification as required by §§ 1.2(C)(4)(g) and (h) of this Part.
6. The renewal period is one year from the date of first issuance and will occur annually on that date unless and until the license is revoked or surrendered. The issuance of temporary licenses by DBR, pursuant to R.I. Gen. Laws § 21-28.6-12(d)(4), does not alter this renewal period or license term with respect to payment of the annual license fee.

230 R.I. Code R. § 230-RICR-80-05-1.2

Amended effective 3/25/2020