VA Cannabis Regulations

It’s not widely known that the U.S state of Virginia passed one of the nation’s first medical marijuana laws way back in 1979. Unfortunately, the law used the terminology “prescription.” And because marijuana was still federally illegal, no doctor was willing to write a prescription and the measure was dead in the water. 

Then, 36 years later, in 2015, HB 1445/SB 1235 was passed by lawmakers in Virginia. Although the measure didn’t create a regulated medical cannabis market in the state, it did provide approved patients suffering from a list of qualifying medical conditions with an affirmative defense against marijuana possession charges. However, that defense only covered the patient for the possession of cannabis oil and prohibited the use of smokable products. 

Then in 2017 and 2018, lawmakers in Virginia laid the groundwork for the state’s medical marijuana industry. First, bill SB 701 directed the Virginia Board of Pharmacy to regulate and monitor the program. Then SB 1027 authorized the Board of Pharmacy to issue permits for the cultivation of marijuana and the processing of cannabis oils - initially by five providers, one per Health Service Area (HSA). The system was expected to become fully operational in late 2019, however, products might not be available for purchase until well into 2020.

Under the measure, Virginia's licensed providers​ — called “pharmaceutical processors” — must be vertically integrated. That means each provider is required to grow, extract, dispense and deliver the medical cannabis oils. That is as opposed to licensing growers, processors, and sellers independently. 

The application process to become a pharmaceutical processor actually ended June 8, 2018. Five providers have since been licensed. 

Also, under the bill, the Secretary of Health and Human Resources and the Secretary of Agriculture and Forestry were required to convene a workgroup to review and recommend an appropriate structure for Virginia’s cannabis industry by November 1, 2019.

In, 2018, Gov. Ralph Northam signed HB 1251. This expansion of access allows doctors to recommend CBD or THC-A cannabis oil for any condition rather than a specific list of conditions. Physician's assistants and licensed nurse practitioners were also authorized to issue a written certification for CBD and THC-A oil. 

And in 2019, SB 1557 increased the THC limit to 10mg per dose. Furthermore, the bill expanded the approved products from oils only to include capsules, topicals, lozenges, etc. 

Bills have recently been introduced to decriminalize or legalize cannabis in Virginia. Many lawmakers in the state, as well as Virginia Gov. Ralph Northam (D) strongly support decriminalizing cannabis. 

Legalizing cannabis for adult recreational use and regulating its production and sale will greatly expand the market for legal cannabis in Virginia.

Virginia law restricts the number of permits that the Board may issue or renew in any year to a maximum of 5 permits, one for each health service area established by the Board of Health. All five permits have been awarded. 

Virginia Cannabis Regulations

Below is an overview of Virginia’s cannabis regulations as of August 2019. 

The actual regulations go into greater detail. 

• Regulations Governing Pharmaceutical Processors (8-7-2019).

Seed-to-Sale Tracking

All medical cannabis processors are required to maintain an electronic tracking system. This system must include a means of electronic radio-frequency identification (RFID). The system must include, at a minimum, a central inventory management system and reporting functions.

Application and Approval Process for Pharmaceutical Processors

The application process has been closed and all five permits have been awarded. However, it is possible that the medical program could be expanded or recreational use will be legalized and the process will reopen.

The application process occurs in three stages: 

1. submission of initial application
2. award of conditional approval
3. grant of a pharmaceutical processor permit

Submission of initial application.

Along with the application fee of $10,000, applicants must are required to submit the following information and documentation: 

• The name and address of the applicant and the applicant's owners;
• The location within the health service area established by the State Board of Health for the pharmaceutical processor that is to be operated under such permit;
• Detailed information regarding the applicant's financial position indicating all assets, liabilities, income, and net worth to demonstrate the financial capacity of the applicant to build and operate a facility to cultivate Cannabis plants intended only for the production and dispensing of cannabidiol oil and THC-A oil pursuant to §§ 54.1-3442.6 and 54.1-3442.7 of the Code of Virginia, which may include evidence of an escrow account, letter of credit, or performance surety bond;
• Details regarding the applicant's plans for security to maintain adequate control against the diversion, theft, or loss of the Cannabis plants and the cannabidiol oil or THC-A oil;
• Documents sufficient to establish that the applicant is authorized to conduct business in Virginia and that all applicable state and local building, fire, and zoning requirements and local ordinances are met or will be met prior to issuance of a permit;
• Information necessary for the board to conduct a criminal background check on the applicant;
• Information about any previous or current involvement in the medical cannabidiol oil or THC-A oil industry;
• Whether the applicant has ever applied for a permit or registration related to medical cannabidiol oil or THC-A oil in any state and, if so, the status of that application, permit, or registration, to include any disciplinary action taken by any state on the permit, the registration, or an associated license;
• Any business and marketing plans related to the operation of the pharmaceutical processor or the sale of cannabidiol oil or THC-A oil;
• Text and graphic materials showing the exterior appearance of the proposed pharmaceutical processor;
• A blueprint of the proposed pharmaceutical processor that shall show and identify (i) the square footage of each area of the facility; (ii) the location of all safes or vaults used to store the Cannabis plants and oils; (iii) the location of all areas that may contain Cannabis plants, cannabidiol oil, or THC-A oil; (iv) the placement of walls, partitions, and counters; and (v) all areas of ingress and egress;
• Documents related to any compassionate need program the pharmaceutical processor intends to offer;
• Information about the applicant's expertise in agriculture and other production techniques required to produce cannabidiol oil or THC-A oil and to safely dispense such products; and
• Such other documents and information required by the board to determine the applicant's suitability for permitting or to protect public health and safety.

Verification and Criminal Background Checks

The board will conduct criminal background checks on applicants and verify the information contained in the application and accompanying documentation in order to assess the applicant's ability to operate a pharmaceutical processor.  

No person who has been convicted of a felony or of any offense may have any form of ownership, be employed by, or act as an agent of a pharmaceutical processor.

Conditional approval

Following submission of the application, the board will evaluate the application. If accepted, the board will grant conditional approval. 

The board will consider the following criteria in evaluating pharmaceutical processor permit applications:

• The results of the criminal background checks required in 18VAC110-60-110 B 3 or any history of disciplinary action imposed by a state or federal regulatory agency;
• The location for the proposed pharmaceutical processor, which shall not be within 1,000 feet of a school or daycare;
• The applicant's ability to maintain adequate control against the diversion, theft, and loss of the Cannabis, to include the seeds, any parts or extracts of the Cannabis plants, the cannabidiol oil, or the THC-A oil;
• The applicant's ability to maintain the knowledge, understanding, judgment, procedures, security controls, and ethics to ensure optimal safety and accuracy in the dispensing and sale of cannabidiol oil or THC-A oil; 
• 5. The extent to which the applicant or any of the applicant's pharmaceutical processor owners have a financial interest in another license, permit, registrant, or applicant; and
• Any other reason provided by state or federal statute or regulation that is not inconsistent with the law and regulations regarding pharmaceutical processors.

Following review and inspection of the facility, the board will notify applicants of denial or conditional approval. If the board finds any violations or deficiencies it will notify the applicant and provide the opportunity to correct the issue. 

Application Fees

Application fees for a pharmaceutical processor permit are as follows.

Granting of a pharmaceutical processor permit

If granted conditional approval, an applicant will have one year from the date of notification to complete all requirements for issuance of a permit. This includes the employment of a PIC and other personnel necessary for operation. 

If the facility passes inspection, the board will issue a pharmaceutical processor permit. The permit holder will then have 180 days to commence operation or the permit may be rescinded. 

Grounds for action against a pharmaceutical processor permit

Under certain circumstances, the board may suspend, revoke, or refuse to grant or renew a permit issued. It may also place the permit holder on probation, place conditions on a permit, or take other actions permitted by statute or regulation on the following grounds: 

• Any criminal conviction under federal or state statutes or regulations or local ordinances, unless the conviction was based on a federal statute or regulation related to the possession, purchase, or sale of cannabidiol oil or THC-A oil that is authorized under state law and regulations;
• Any civil action under any federal or state statute or regulation or local ordinance (i) relating to the applicant's, licensee's, permit holder's, or registrant's profession or (ii) involving drugs, medical devices, or fraudulent practices, including fraudulent billing practices;
• Failure to maintain effective controls against diversion, theft, or loss of Cannabis, cannabidiol oil or THC-A oil, or other controlled substances;
• Intentionally or through negligence obscuring, damaging, or defacing a permit or registration card;
• Permitting another person to use the permit of a permit holder or registration of a qualifying patient, parent, or legal guardian;
• Failure to cooperate or give information to the board on any matter arising out of conduct at a pharmaceutical processor; or
• Discontinuance of business for more than 60 days, unless the board approves an extension of such period for good cause shown upon a written request from a pharmaceutical processor. Good cause includes exigent circumstances that necessitate the closing of the facility. Good cause shall not include a voluntary closing of the pharmaceutical processor or production facility.

Pharmaceutical processor employee licenses

Permit holders are required to employ a pharmacist with a current, unrestricted license who will serve as the pharmacist-in-charge (PIC). The PIC must personally supervise the entire operation including all employees. All PICs must be employed for at least 35 hours per week. 

Duties of the PIC include:

• The entry of drug dispensing information and drug history into a data system or other recordkeeping system; 
• The preparation of labels for dispensing the oils or patient information; 
• The removal of the oil to be dispensed from inventory; 
• The measuring of the oil to be dispensed; 
• The packaging and labeling of the oil to be dispensed and the repackaging thereof; 
• The stocking or loading of devices used in the dispensing process; 
• The selling of the oil to the registered patient, parent, or legal guardian; and
• The performance of any other task restricted to pharmacy technicians by the board's regulations. 

Pharmacists, pharmacy interns, and pharmacy technicians may perform duties associated with the cultivation, extraction, and dispensing of the oils as authorized by the PIC or as otherwise authorized in law.

Furthermore, an employee who is not a licensed pharmacist or pharmacy technician may perform duties associated with the cultivation of Cannabis as long as they have received a degree in horticulture or have at least two years of experience cultivating plants.

Any employee with a degree in chemistry or pharmacology or at least two years of experience extracting chemicals from plants may perform duties associated with the extraction of cannabidiol oil and THC-A oil.

All employees must be at least 18 years of age.

Employee training

All employees of pharmaceutical processors must complete training prior to commencing work.

At a minimum, the training must include the following:

• The proper use of security measures and controls that have been adopted for the prevention of diversion, theft, or loss of Cannabis, to include the seeds, any parts or extracts of the Cannabis plants, cannabidiol oil, and THC-A oil;
• Procedures and instructions for responding to an emergency; 
• Professional conduct, ethics, and state and federal statutes and regulations regarding patient confidentiality; and
• Developments in the field of the medical use of cannabidiol oil or THC-A oil.

PIC’s are required to assure the continued competency of all employees through continuing in-service training provided at least annually.

A written record documenting the initial and continuing training of all employees must be maintained. This record must contain:

• The name of the person receiving the training; 
• The dates of the training;
• A general description of the topics covered;
• The name of the person supervising the training; and
• The signatures of the person receiving the training and the PIC.

The following items must be conspicuously posted in the pharmaceutical processor:

• Pharmaceutical processor permit;
• Licenses for all pharmacists practicing at the pharmaceutical processor; and
• The price of all cannabidiol oil or THC-A oil products offered by the pharmaceutical processor

Laboratory testing 

After processing and before dispensing the cannabis oil, pharmaceutical processors must make available a sample from each batch of product for a laboratory to test for microbiological contaminants, mycotoxins, heavy metals, residual solvents, and pesticide chemical residue and to conduct an active ingredient analysis and terpenes profile. 

If the batch sample does not pass the microbiological, mycotoxin, heavy metal, or pesticide chemical residue test, the pharmaceutical processor must dispose of the entire batch from which the sample was taken.

Mycotoxin Standards

The product will be deemed to have passed mycotoxin testing if it meets the following standards:

Heavy Metals

For purposes of the heavy metal test, a sample of cannabidiol oil or THC-A oil product will be deemed to have passed if it meets the following standards:

Pesticides

For pesticide chemical residue test, products must satisfy the most stringent acceptable standard for a pesticide chemical residue in any food item as set forth in Subpart C of the federal Environmental Protection Agency's regulations for Tolerances and Exemptions for Pesticide Chemical Residues in Food, 40 CFR Part 180.

Active Ingredients

For purposes of the active ingredient analysis, samples must be tested for:

• Tetrahydrocannabinol (THC)
• Tetrahydrocannabinol acid (THC-A)
• Cannabidiol (CBD)
• Cannabidiolic acid (CBDA)

Residual Solvents

A sample will be deemed to have passed the residual solvents test if it meets the standards and limits recommended by the American Herbal Pharmacopia for Cannabis Inflorescence. If a sample does not pass the residual solvents test, the batch can be remediated with further processing. After further processing, the batch must be retested for microbiological, mycotoxin, heavy metal, residual solvents, and pesticide chemical residue, and an active ingredient analysis and terpenes profile must be conducted. 

If a sample of cannabidiol oil or THC-A oil product passes the microbiological, mycotoxin, heavy metal, residual solvent, and pesticide chemical residue test, the entire batch may be utilized by the processor for immediate packaging and labeling for sale. 

An expiration date must be assigned to the product that is based upon validated stability testing that addresses product stability when opened and the shelf-life for unopened products. 

Pharmaceutical processor are required to have laboratory results available upon request to registered patients, parents, legal guardians, or registered practitioners who have certified qualifying patients.

General Provisions

Display of licenses, permits, and prices - The following items must be conspicuously posted in the dispensary:

• Pharmaceutical processor permit;
• Licenses for all pharmacists practicing at the pharmaceutical processor; and
• The price of all cannabidiol oil or THC-A oil products offered by the pharmaceutical processor; and

Hours of operation - Dispensaries are required to be open a minimum of 35 hours a week. If the dispensary closes during its normal hours of operation it must implement procedures to notify registered patients, parents, and legal guardians of when the pharmaceutical processor will resume normal hours of operation. Such procedures may include telephone system messages and conspicuously posted signs. If the pharmaceutical processor is or will be closed during its normal hours of operation for longer than two business days, the pharmaceutical processor shall immediately notify the board.

Advertising - Advertising is prohibited except for a company website. The website may display the following information:

• Name and location of the processor;
• Contact information for the processor;
• Hours and days the pharmaceutical processor is open for dispensing cannabidiol oil or THC-A oil products; 
• Laboratory results; 
• Product information and pricing; and
• Directions to the processor facility.

Delivery - Delivery to both patients and caregivers is prohibited.

Plant limits - Pharmaceutical processors may cultivate the number of plants necessary to produce cannabidiol oil or THC-A oil for the number of patients anticipated within the first nine months of operation. Thereafter, the processor may not maintain more than 12 Cannabis plants per patient at any given time based on dispensing data from the previous 90 days.

Security - Pharmaceutical processors are required to maintain an adequate security system to prevent and detect diversion, theft, or loss of inventory. The installation and the device shall be based on accepted alarm industry standards. Furthermore, the outside perimeter of the premises is required to be well-lit.

Dispensing records - Dispensing records must be maintained for three years from the date of dispensing.

Virginia Cannabis Legislation Resources

• The Pharmacy Act and The Drug Control Act with related statutes, 7/1/2019

• Regulations Governing Pharmaceutical Processors (8-7-2019)

• Virginia Pharmaceutical Processing FAQ 
• Information Regarding Cannabidiol (Cbd)/Thc-a Oil In Virginia
• Virginia Board of Pharmacy Home

Contacts

• Email pharmbd@dhp.virginia.gov
• Fax (804) 527-4472
• Virginia Board of Pharmacy
  Perimeter Center
  9960 Mayland Drive
  Suite 300
  Henrico, VA 23233-1463

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