Ala. Admin. Code r. 538-X-4-.07
Current through Register Vol. 43, No. 02, November 27, 2024
Section 538-X-4-.07 - Duty To Meet And Maintain Standards, Policies, Procedures and Operations Per ApplicationA licensee has an ongoing duty to meet and maintain the standards, policies, procedures, and operations as it affirmed to the Commission at the time of licensing, as such standards, policies, procedures, and operations may have been amended by the licensee from time to time in accordance with Rules 538-X-4-.08 and 538-X-4-.19. Specifically, at the time of the licensee's pre-commencement inspection and at each inspection thereafter, a licensee must meet and/or maintain the following, in the manner previously provided at the time of licensing, as updated (i.e., current to within 30 days, unless otherwise required):
(1) With regard to each business entity that has any ownership interest in the licensee, the licensee shall verify all of the following: (a) The name and street address of every individual having an indirect or direct ownership interest in that business entity. For purposes of this paragraph, if the business entity is a trust, the verification shall disclose the names and street addresses of all trustees and beneficiaries; if a privately held corporation, the names and street addresses of all shareholders, officers, and directors; if a publicly held corporation, the names and addresses of all officers, directors, and shareholders holding a direct or indirect interest of greater than five percent; if a partnership or limited liability partnership, the names and street addresses of all partners; if a limited partnership or limited liability limited partnership, the names of all partners, both general and limited; or if a limited liability company, the names and street addresses of all members and managers.(b) The name and street address of all of the following other entities, if the other entities are directly or indirectly involved in the cannabis industry, including, but not limited to, the cultivation, processing, packaging, labeling, testing, transporting, or sale of cannabis or medical cannabis.1. The name and street address of any subsidiary, affiliate, conglomerate, parent, or other entity that shares common ownership, directly or indirectly, with the business entity.2. The name and street address of any partnership or limited liability partnership of which the business entity is a partner.3. The name and street address of any limited liability company of which the business entity is a member or manager.(2) With regard to each individual having any ownership interest in the licensee, the licensee shall verify the name and street address of all of the following entities, if the entities are directly or indirectly involved in the cannabis industry, including, but not limited to, the cultivation, processing, packaging, labeling, testing, transporting, or sale of cannabis or medical cannabis:(a) Any business, including any partnership, limited liability partnership, sole proprietorship, limited liability company or other incorporated or unincorporated business entity or venture, of which the individual or his or her spouse, parent, or child has any equity interest, and the identity and relationship of such person having such interest.(b) Any business, including any partnership, sole proprietorship, limited liability company, or other incorporated or unincorporated business entity or venture of which the individual or his or her spouse, parent, or child is a member or manager, and the identity and relationship of such person who is a member or manager.(3) Verification that no owner, director, board member, or individual with a controlling interest in the licensee has been indicted for, charged with, arrested for, convicted of, pled guilty or nolo contendere to, or forfeited bail concerning any criminal offense under the laws of any jurisdiction, either a felony or controlled substance-related misdemeanor, not including traffic violations, regardless of whether the offense has been reversed on appeal or otherwise; if for any reason verification cannot be given, the licensee must include the name of the person, the date, the name and location of the court, arresting agency, prosecuting agency, the case caption, the docket number, the offense, the disposition, the location and length of incarceration, and any explanation as to why such person remains affiliated with the company.(4) Verification that neither the licensee nor any of its affiliates, subsidiaries, parent corporations, owners, board members, officers, shareholders, members or interest holders has ever applied for or has been granted any commercial license or certificate issued by a licensing board or commission in this state or any other jurisdiction that has been:(f) non-renewed, either voluntarily or involuntarily. The licensee must also provide a statement describing the facts and circumstances concerning the application denial, restriction, suspension, surrender, revocation, or nonrenewal, including the licensing board or commission, the date each action was taken, the reason for each action, and the outcome.
(5) Verification that neither the licensee nor any of its affiliates, subsidiaries, parent corporations, owners, board members, officers, shareholders, members or interest holders has filed, or been served with, a complaint or other notice filed with any public body, regarding the delinquency in the payment of, or a dispute over the filings concerning the payment of, any tax required under federal, state, or local law, including the amount, type of tax, taxing agency, and time periods involved. If for any reason verification cannot be given, the licensee must include the name of the person or entity, the date, the name and location of the court and/or prosecuting agency, the case caption and number, the disposition, and any explanation as to why such person or entity remains affiliated with the company.(6) A statement listing the names and titles of all public officials of any unit of government, and the spouses, parents, and children of those public officials, who, directly or indirectly, own any financial interest in, have any beneficial interest in, are the creditors of or hold any debt instrument issued by, or hold or have any interest in any contractual or service relationship with the licensee.(7) A graph showing the current number of employees of the licensee, the number of employees during the past five calendar years, if available, and the projected number of employees for the next five calendar years.(8) A verified statement of the number of days:(a) within which the licensee reasonably projects it will commence operations as to any incomplete or projected facility previously identified to the Commission, and(b) within which the licensee reasonably projects it will reach full capacity as to the operations contemplated with regard to each facility previously identified to the Commission.(9) The licensee's current consent to the inspections, examinations, searches and seizures attending the annual inspections as required herein.(10) Verification and proof that the licensee's facility or facilities have been sited in a permissible location, without prohibition by (and as necessary, with the approval of) applicable local authorities, and in compliance with all State and local laws, resolutions, and ordinances.(11) Verification that the licensee and its leadership have no economic interest in any other licensee or applicant for license under the Act or these Rules (See § 20-2A-55(e), Code of Ala. 1975, (as amended)).(12) The following documents, labeled, and in the following order: (a) The resume or curriculum vitae of each individual listed in response to subparagraph 1.a. of this Rule, showing, at a minimum, all institutions of higher education attended, including the date, location and type of any degrees received; all residential addresses in the last (15) years; and the name, business address and telephone number of all employers in the last 15 years, including a contact person at each.b) A demonstration of sufficient capital (as defined in Chapter 3 of these Rules) available to the licensee, including verification of same by a responsible person designated by the licensee, the licensee's contact person, and an independent Certified Public Accountant.(c) Certified copies of the licensee's business formation documents.(d) Records indicating that a majority of the licensee's ownership is attributable to an individual or individuals with proof of residence in this state for a continuous period of no less than the previous 15 years.(e) For an integrated facility licensee or a cultivator licensee, records indicating that a majority of ownership is attributable to an individual or individuals, or an entity or entities, with cumulative business experience in the field of commercial horticulture or agronomic production for a period of at least 15 years.(f) At the licensee's expense, each owner, shareholder, director, board member, and individual with an economic interest in the licensee must provide written consent and submit to, and the licensee shall provide the Commission with the results of, a state and national criminal background check conducted by ALEA and/or by a third party specializing in obtaining such background checks. Results of each background check shall be obtained and forwarded to the Commission prior to the licensee's commencement of operations and once every three years thereafter.(g) Certified copies of the licensee's business license, if required by local authorities, and, as applicable, resolution or ordinance by local authorities (County or Municipality, as appropriate) approving the licensee's business presence in the local jurisdiction.(h) A verified current financial statement or pro forma covering the following items: year-end financial statements as to the same items over the last five (5) calendar years, as applicable; and year-end projections of the same items for each of the next five (5) calendar years:1. Balance sheet report, providing a snapshot of the value of assets, liabilities and equity at commencement, or for projections, as of December 31 of each year.2. Profit and loss report, summarizing any income, expenses and net profit from the licensee's inception to date of commencement and as projected over each calendar year thereafter, including the year of commencement.3. Statement of cash flow, examining the cash flowing into and out of the licensee's business from inception to commencement and during each calendar year thereafter, including the year of commencement.(i) Demonstrated compliance with (or plan for compliance with) all applicable tax laws; and the licensee's verified tax plan.(j) The licensee must provide a verified current copy of the following items, which, at a minimum, must include all items contained in the Standard Operations and Procedures Plan set forth at subparagraph (12)(o)1.-11. below:1. Employee Handbook, including but not limited to safety policies, including personnel safety and crime prevention techniques.2. Policies and Procedures Manual.(k) A statement of the following, regarding each facility the licensee operates or proposes to operate as of the commencement of operations and within no less than two (2) years of the date of inspection, to the extent available:1. The physical address and GPS coordinates of the facility.2. An aerial photograph of the facility, including clearly identified site boundaries.3. Proof of authorization to occupy the property where each facility is proposed to be located.4. Proof of local zoning and other approvals necessary to operate the business in the community, including but not limited to, as necessary, any local ordinance or resolution approving the operation of medical cannabis facilities there.5. A professionally rendered blueprint certified by a nationally accredited architect or nationally accredited engineer of each facility the licensee operates or proposes to operate within the next three years, showing clearly drawn and labeled interiors of such facilities, including but not limited to the general function of each area of the structure, for ease in identification of operations and processes by the Commission during future inspections.6. A timetable for completion and commencement of operations as to each facility.7. A statement whether such facility shall be open to the public and, if so, the anticipated hours of business operation.8. The hours of operation during which the facility will be occupied by the licensee's employees and, if not continuous, the after-hours contact information for management.9. As to each facility, a description of any and all products that are or will be cultivated, processed, transported, dispensed, or tested; and any and all services that are or will be provided.(l) A complete site map of any website owned or operated by the licensee, and the web address of any webpage, social media page or other online site owned or operated by the licensee.(m) A roster of all leaders and employees affiliated with the licensee, including names, street addresses, contact telephone numbers, email addresses and social security numbers, current to within the last thirty (30) days. Applicant must verify that all employees are registered to the AMCC website and have undergone or are scheduled to undergo appropriate preemployment background checks.(n) The licensee's verified Business Plan, to include, at a minimum, the following: 1. A clearly defined business structure and plan for adherence to applicable corporate conventions.2. Clearly defined business goals, including a 3-year and a 5-year plan.3. An Organizational Chart- a diagram that visually conveys the licensee's internal structure by detailing the roles, responsibilities, and relationships between individuals within the entity.4. Job descriptions of all managerial positions, showing clear delineation of authority, qualifications, and duties.5. Job descriptions of all non-managerial employee positions, showing clear delineation of qualifications and duties.6. An executive summary, including mission statement, leadership background and qualifications, business style and philosophy, key personnel, and identification of facilities' location and function.7. A description of any and all products that are or will be cultivated, processed, transported, dispensed, or tested; and any and all services that are or will be provided. The licensee shall include in the descriptions its actual (or projected) pricing data; the actual (or projected) lifespan of each product, as applicable; the projected benefits to the public; patents, if any; and proprietary technology, if any.8. An advertising/marketing analysis and strategy, if any.9. An insurance plan, including declarations pages and letters of intent, from an A-rated insurer as to, at a minimum, casualty, workers' compensation, liability, and (as applicable) auto or fleet policy.10. A Community Engagement Plan describing all efforts that have been or will be made to foster the licensee's relationship with, involvement in, and commitment to any community (including municipality or county) in which the applicant intends to locate a facility within the next three years.11. An Environmental Impact Statement outlining the anticipated impact of the licensee's operations, per facility, on the local environment over the next three to five years; the licensee's efforts or plans, if any, to build a relationship to foster cooperation and compliance with federal, state and local agencies providing environmental oversight; and any steps the licensee has taken or will take to reduce or eliminate its carbon footprint and/or to achieve and maintain a positive environmental profile in each community where the licensee intends to locate and operate a facility within the next three years.(o) The licensee's verified Standard Operating Plan and Procedures. The licensees must demonstrate and maintain standard operating procedures regarding the following subjects in such a way that they can be readily accessed from the physical site of operations upon the request of inspectors, the Commission, or Commission staff, including, at a minimum, the following: 1. An IT Plan. Licensees must maintain at all times and review annually, a plan for ensuring accurate recordkeeping, compliance with inventory protocols, and coordination of information and systems with vendors, customers and others, as applicable. Said plan must include not only a plan for obtaining, installing and maintaining the Licensee's own internal operating systems, if applicable, through a third-party inventory control and tracking system (§ 20-2A-60, Code of Ala. 1975, (as amended)), but also the licensee's plan for interactivity with, as applicable, the Alabama Medical Cannabis Patient Registry System (§ 20-2A-35, Code of Ala. 1975, (as amended)); the Statewide Seed-to-Sale Tracking System (§ 20-2A-54, Code of Ala. 1975, (as amended)); and the AMCC website. Licensees must demonstrate proof of purchasing and accessing the foregoing platforms, and the plan should demonstrate how interaction with the platforms will be successfully maintained and properly updated.2. A Cannabis/Medical Cannabis Storage and Maintenance Plan. Licensees must maintain at all times and review at least annually a plan for maintenance and storage of cannabis and medical cannabis in the possession and control of licensee. Such plan shall include, at a minimum, maintaining cannabis and medical cannabis in a moisture- and temperature-controlled environment free of pests; keeping stored items secure, properly separated and labeled; and limiting access to cannabis and medical cannabis to essential personnel by position.3. A Quality Assurance Plan. Licensees (except secure transporters) shall perform, at the licensee's own expense, quality control and testing of a qualified sampling (as defined in 538-X-10-.01 et seq. of these Rules) of cannabis or medical cannabis in their control at each stage of production, including cultivation, processing and dispensing of cannabis or medical cannabis, regardless of whether packaged, labeled and/or sealed, per the following requirements:(i) Required testing shall be conducted by a State Testing Laboratory (as detailed in 538-X-10-.01, et seq. of these Rules).(ii) A sample of cannabis for testing must be derived from a single batch and must comprise at least ten (10) grams and no more than thirty (30) grams; a sample of medical cannabis must be derived from a single batch and must be the lesser of one percent (1%) of the total product weight of the production run or ten (10) units of product. All samples must be homogenized before testing.(iii) Under no circumstances shall the licensee which provided the sample sell or transfer the cannabis or medical cannabis to another licensee, patient, or caregiver, unless and until the State Testing Laboratory clears the licensee to do so based on the written results of successfully completed testing.(iv) Nothing herein shall prohibit a licensee from conducting, at the licensee's own expense, separate in-house testing or designated unofficial testing by the State Testing Laboratory, at any point during the licensee's possession and control of cannabis or medical cannabis, but the results of such testing shall be unofficial and designated as such no later than the time of collection, and non-dispositive without approval from the Commission upon the written request of the licensee.4. Contamination and Recall Plan. Licensees must maintain at all times and review at least annually a clear written contamination and recall plan, detailing the steps to be undertaken in the event of discovery of contamination of cannabis or medical cannabis within the possession and control of the licensee. The plan must account for the safety of employees and others on the premises, notification of proper authorities, exploring the possibility of retesting or remediation, proper disposal of contaminated cannabis and medical cannabis, steps to be taken for the preservation of cannabis or medical cannabis, and the reasonable efforts to maintain access to medical cannabis by those who depend on it.5. A Criminal Activity Plan. Licensees must maintain at all times and review at least annually a clear written criminal activity plan, detailing the steps to be undertaken in the event of discovery of criminal activity related to cannabis or medical cannabis within the possession and control of the licensee. The plan must account for the safety of employees and others on the premises, reporting the criminal activity to proper authorities, steps to be taken for the preservation of cannabis or medical cannabis, and the reasonable efforts to maintain access to medical cannabis by those who depend on it.6. An Emergency Procedures/Disaster Plan. Licensees must maintain at all times, and review at least annually, a clear written Emergency Procedures and Disaster Plan, detailing the steps the licensee will take to ensure the safety of employees and others on the premises, the preservation of cannabis or medical cannabis, and the reasonable efforts to maintain access to medical cannabis by those who depend on it, in the event of any reasonably foreseeable emergency, or natural disaster that may affect the licensee, its facilities, personnel, products or customers.7. An Alcohol, Smoke, and Drug-Free Workplace and Non-Discrimination Policies. Licensees must maintain at all times and review at least annually at a clear written Alcohol, Smoke and Drug Free Workplace Policy and a clear written Non-Discrimination Policy, which shall be included in the licensee's Employee Handbook and/or the Policies and Procedures Manual.8. An Employee Safety Plan. Licensees must maintain at all times and review at least annually, an employee safety plan that must comply with parallel OSHA standards applicable to similar types of businesses, to the extent such standards can be extrapolated to fit the licensee's workplace.9. A Confidential Information and Cyber security Plan. The licensee must maintain at all times and review at least annually, a plan for securing and maintaining confidentiality as to any and all sensitive information and any records required to be confidentially maintained, including, at a minimum, information and records communicated interpersonally, kept physically, or stored virtually.10. A Cannabis/Medical Cannabis Waste and Disposal Plan. Licensees must maintain at all times and review at least annually, a plan for tracking and proper disposal of waste cannabis or medical cannabis, including all parts thereof, as applicable. Such plan must, at a minimum, leave no part of the disposed or waste cannabis or medical cannabis either useable or recognizable as such.11. A Security Plan as to each of the licensee's facilities, addressing all of the following aspects of security and meeting the following minimum thresholds:(i) Alarm systems must be installed in all facilities where cannabis or medical cannabis is maintained or stored. Such alarms shall be provided and installed by experts in industry-standard commercial-grade alarm systems. Alarm systems must be fully operational securing all entry points and perimeter windows, be equipped with motion detectors and pressure switches covering all areas where cannabis or medical cannabis is grown, handled, stored, prepared, transported, tested, or dispensed.(ii) Reception areas and personnel adjacent to ingress and egress points shall have ready access to duress panic and hold-up alarms that may be activated in the event of access by unauthorized personnel or intruders.(iii) Licensee facilities shall maintain an audio/video surveillance system that shall be in continuous operation 24 hours per day. Recording devices shall be fixed in place covering both the interior and exterior of the facility, in such quantity and at such resolution as shall allow for the clear identification of individuals and activities in all reasonably accessible areas of the premises, including but not limited to all point-of- sale areas, entrances, exits, parking lots, and any area where cannabis or medical cannabis is grown, handled, stored, prepared, transported, processed, packaged, labeled tested, or dispensed. Audio recordings shall clearly and accurately capture sound within camera range at a level of 20 decibels or greater. Audio/video surveillance recordings must clearly and accurately display the time and date.(iv) The facility's perimeter and any outdoor premises must be surrounded by a sufficient fence or barrier to prevent access by unauthorized persons and must have sufficient lighting to allow for the proper functioning of video surveillance equipment at all times between dusk and dawn or at any other time when ambient lighting requires enhancement to permit identification of individuals or activities upon or immediately adjacent to the premises. Indoor premises must likewise be sufficiently lit to allow for the identification of individuals and activities.(v) Exterior doors of each facility must be designed or reinforced to withstand unlawful forcible entry; exterior doors shall remain locked against outside intruders at all times, while allowing free egress by the facility's occupants in the event of an emergency; doors must permit ingress to employees and other appropriate persons only by means of a keycard or other similar electronic access device.(vi) Exterior walls of each facility must be reinforced to withstand unlawful forcible entry. Windows, likewise, must be reinforced to prevent breakage by outside intruders.(vii) Licensees must maintain sufficient staffing of security guards at each facility where cannabis and medical cannabis is present to reasonably ensure the safety of the products stored therein; however, licensees must maintain, at a minimum, one (1) security guard per facility during the facility's business/operating hours.(viii) Strict access controls shall protect areas where cannabis or medical cannabis is handled or stored - in a secured, locked room or vault.(ix) Records, whether electronic or manual, must be kept of all persons on the premises at a facility at all times, including employees, vendors, transporters, medical cannabis patients and caregivers, and all others, recording the individuals' name, date, time of ingress and egress, and (as to non-employees) the reason for their presence; such records shall be kept for a minimum of two years.(x) Audio/Video surveillance records must be kept for at least 60 days, and longer upon the request of the Commission, its inspectors, or any law enforcement personnel. Audio/Video recordings potentially reflecting an incident of actual or attempted diversion must be kept for the longer of a period of two years, or until resolution of the incident and apprehension and discipline or prosecution of the individuals involved in the actual or attempted diversion.(xi) Employees shall wear identification badges that clearly identify them as employees while on duty.(xii) Visitors, including Commission members, inspection personnel, or other representatives, shall wear a "visitor pass" or "AMCC Official" pass, as applicable, at all times while on the premises.(xiii) Licensees shall maintain, review and update policies to report theft, diversion or other loss of cannabis or medical cannabis to the Commission and to law enforcement within 24 hours of the event or its discovery.(xiv) The Licensee, upon request, shall make available to the Commission or its inspectors all information relating to security alarm systems, monitoring, alarm activity, maps of camera locations and camera coverage, surveillance equipment maintenance logs, authorized use lists, operation instructions, and any other security-related information deemed relevant by the Commission or its inspectors.(xv) Any information and/or documents specific to the category of licensee (Cultivator, Processor, Secure Transporter, Dispensary, Integrated Facility, State Testing Laboratory,) as identified separately in these Rules.Ala. Admin. Code r. 538-X-4-.07
Adopted by Alabama Administrative Monthly Volume XL, Issue No. 11, August 31, 2022, eff. 10/15/2022.Author: William H. Webster
Statutory Authority:Code of Ala. 1975, §§ 20-2A-22, as amended.