Administrative Code

Virginia Administrative Code
9/24/2021

Part III. Application and Approval Process for Pharmaceutical Processors and Cannabis Dispensing Facilities

18VAC110-60-100. Publication of notice for submission of applications.

A. The board shall publish a notice of open applications for pharmaceutical processor permits. Such notice shall include information on how to obtain and complete an application, the required fees, the criteria for issuance of a permit, and the deadline for receipt of applications.

B. The board shall have the right to amend the notice of open applications prior to the deadline for submitting an application. Such amended notice shall be published in the same manner as the original notice of open applications.

C. The board shall have the right to cancel a notice of open applications prior to the award of a pharmaceutical processor permit.

Statutory Authority

§§ 54.1-3442.6 and 54.1-3447 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 35, Issue 23, eff. August 7, 2019.

18VAC110-60-110. Application process for pharmaceutical processor permits.

A. The application process for permits shall occur in three stages: submission of initial application, award of conditional approval, and grant of a pharmaceutical processor permit.

B. Submission of initial application.

1. A pharmaceutical processor permit applicant shall submit the required application fee and form with the following information and documentation:

a. The name and address of the applicant and the applicant's owners;

b. 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;

c. 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 cannabis products 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;

d. Details regarding the applicant's plans for security to maintain adequate control against the diversion, theft, or loss of the Cannabis plants and the cannabis products;

e. 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;

f. Information necessary for the board to conduct a criminal background check on the applicant;

g. Information about any previous or current involvement in the medical cannabis industry;

h. Whether the applicant has ever applied for a permit or registration related to medical cannabis 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;

i. Any business and marketing plans related to the operation of the pharmaceutical processor or the sale of cannabis products;

j. Text and graphic materials showing the exterior appearance of the proposed pharmaceutical processor;

k. 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 products; (iii) the location of all areas that may contain Cannabis plants or cannabis products; (iv) the placement of walls, partitions, and counters; and (v) all areas of ingress and egress;

l. Documents related to any compassionate need program the pharmaceutical processor intends to offer;

m. Information about the applicant's expertise in agriculture and other production techniques required to produce cannabis products and to safely dispense such products; and

n. Such other documents and information required by the board to determine the applicant's suitability for permitting or to protect public health and safety.

2. In the event any information contained in the application or accompanying documents changes after being submitted to the board, the applicant shall immediately notify the board in writing and provide corrected information in a timely manner so as not to disrupt the permit selection process.

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

C. In the event the board determines that there are no qualified applicants to award conditional approval for a pharmaceutical processor permit in a health service area, the board may republish, in accordance with 18VAC110-60-100, a notice of open applications for pharmaceutical processor permits.

D. No person who has been convicted of a felony under the Code of Virginia or another jurisdiction within the last five years shall have a 5.0% or greater ownership, be employed by, or act as an agent of a pharmaceutical processor.

Statutory Authority

§§ 54.1-3442.6 and 54.1-3447 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 35, Issue 23, eff. August 7, 2019; amended, Virginia Register Volume 37, Issue 1, eff. September 30, 2020; Volume 37, Issue 25, eff. September 1, 2021.

18VAC110-60-120. Conditional approval.

A. Following the deadline for receipt of applications, the board shall evaluate each complete and timely submitted application and may grant conditional approval on a competitive basis based on compliance with requirements set forth in 18VAC110-60-110.

B. The board shall consider, but is not limited to, the following criteria in evaluating pharmaceutical processor permit applications:

1. 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;

2. The location for the proposed pharmaceutical processor, which shall not be within 1,000 feet of a school or daycare;

3. 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 or the cannabis products;

4. 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 cannabis products;

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

6. Any other reason provided by state or federal statute or regulation that is not inconsistent with the law and regulations regarding pharmaceutical processors.

C. The board may disqualify any applicant who:

1. Submits an incomplete, false, inaccurate, or misleading application;

2. Fails to submit an application by the published deadline;

3. Fails to pay all applicable fees; or

4. Fails to comply with all requirements for a pharmaceutical processor.

D. Following review, the board shall notify applicants of denial or conditional approval. The decision of the board not to grant conditional approval to an applicant shall be final.

E. If granted conditional approval, an applicant shall have one year from date of notification to complete all requirements for issuance of a permit, to include employment of a PIC, responsible party, and other personnel necessary for operation of a pharmaceutical processor, construction or remodeling of a facility, installation of equipment, and securing local zoning approval.

Statutory Authority

§§ 54.1-3442.6 and 54.1-3447 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 35, Issue 23, eff. August 7, 2019; amended, Virginia Register Volume 37, Issue 1, eff. September 30, 2020; Volume 37, Issue 25, eff. September 1, 2021.

18VAC110-60-130. Granting of a pharmaceutical processor permit.

A. The board may issue a pharmaceutical processor permit when all requirements of the board have been met, to include:

1. Designation of a PIC and responsible party;

2. Evidence of criminal background checks for all employees and delivery agents of the processor to ensure compliance with § 54.1-3442.6 of the Code of Virginia;

3. Evidence of utilization of an electronic tracking system; and

4. A satisfactory inspection of the facility conducted by the board or the board's agents.

B. The permit shall not be awarded until any deficiency identified by inspectors has been corrected and the facility has been satisfactorily reinspected if warranted.

C. Before any permit is issued, the applicant shall attest to compliance with all state and local laws and ordinances. A pharmaceutical processor permit shall not be issued to any person to operate from a private dwelling or residence.

D. If an applicant has been awarded a pharmaceutical processor permit and has not commenced operation of such facility within 180 days of being notified of the issuance of a pharmaceutical processor permit, the board may rescind such permit, unless such delay was caused by circumstances beyond the control of the permit holder.

E. A pharmaceutical processor shall be deemed to have commenced operation if Cannabis plants are under cultivation by the processor in accordance with the approved application.

F. In the event a permit is rescinded pursuant to this section, the board may award a pharmaceutical processor permit by selecting among the qualified applicants who applied for the pharmaceutical processor permit subject to rescission. If no other qualified applicant who applied for such pharmaceutical processor permit satisfied the criteria for awarding a permit, the board shall publish in accordance with this section a notice of open applications for a pharmaceutical processor permit.

G. Once the permit is issued, a processor may begin cultivation of Cannabis, and the responsible party or a person who is qualified to provide supervision in accordance with 18VAC110-60-170 shall be present during hours of operation to ensure the safety, security, and integrity of the Cannabis. Once Cannabis has been placed in the dispensing area of the pharmaceutical processor, a pharmacist shall be present during hours of operation to ensure the safety, security, and integrity of the Cannabis. The responsible party shall ensure security measures are adequate to protect the cannabis in the cultivation and production area from diversion at all times, and the PIC shall have concurrent responsibility for preventing diversion from the dispensing area. If there is a change in the designated opening date, the pharmaceutical processor shall notify the board office, and a pharmacist or the responsible party shall continue to be on site on a daily basis.

Statutory Authority

§§ 54.1-3442.6 and 54.1-3447 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 35, Issue 23, eff. August 7, 2019; amended, Virginia Register Volume 37, Issue 1, eff. September 30, 2020; Volume 37, Issue 25, eff. September 1, 2021.

18VAC110-60-135. Application for and granting of a permit for a cannabis dispensing facility.

A. Pursuant to § 54.1-3442.6 of the Code of Virginia, the board may issue up to five cannabis dispensing facility permits for each health service area. A permit may be issued to a facility that is owned, at least in part, by the pharmaceutical processor located in that health service area for the dispensing of cannabis products that has been cultivated and produced on the premises of a pharmaceutical processor. Each cannabis dispensing facility shall be located within the same health service area as the pharmaceutical processor.

B. A separate application and fee for each cannabis dispensing facility permit shall be submitted to the board, along with the following information and documentation:

1. The name and address of the facility, which shall not be within 1,000 feet of a school or daycare;

2. The name and address of the facility's owners with 5.0% or greater ownership;

3. Name and signature of pharmacist-in-charge practicing at the facility;

4. Details regarding the applicant's plans for security to maintain adequate control against the diversion, theft, or loss of cannabis products; and

5. Information necessary for the board to conduct a criminal background check on the facilities' owners with 5.0% or greater ownership.

C. Prior to issuing the permit, an inspection of the facility shall be performed by an agent of the board. The permit shall not be awarded until any deficiency identified by inspectors has been corrected and the facility has been satisfactorily reinspected if warranted.

D. A cannabis dispensing facility shall comply with all state and local laws and ordinances.

E. A cannabis dispensing facility permit shall not be issued to any person to operate from a private dwelling or residence.

F. No person who has been convicted of a felony under the laws of the Commonwealth or another jurisdiction within the last five years shall be employed by or act as an agent of a cannabis dispensing facility.

G. If the cannabis dispensing facility is not operational within 90 days from the date the permit is issued, the board shall rescind the permit unless an extension is granted for good cause shown.

H. A cannabis dispensing facility shall be deemed to have commenced operation if it is in receipt of cannabis products from a pharmaceutical processor.

I. Once the facility is in possession of cannabis products, a pharmacist shall be on site at all times during the declared hours of operation.

Statutory Authority

§§ 54.1-3442.6 and 54.1-3447 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 37, Issue 25, eff. September 1, 2021.

18VAC110-60-136. Denial of a cannabis dispensing facility permit application.

A. The board may deny an application for a cannabis dispensing facility permit if the applicant:

1. Submits an incomplete, false, inaccurate, or misleading application;

2. Fails to pay all applicable fees; or

3. Fails to comply with all requirements for a cannabis dispensing facility.

B. If the board denies an application of cannabis dispensing facility permit, the board shall provide the applicant with notice of the grounds for the denial and shall inform the applicant of the right to request a hearing pursuant to § 2.2-4019 of the Code of Virginia.

Statutory Authority

§§ 54.1-3442.6 and 54.1-3447 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 37, Issue 25, eff. September 1, 2021.

18VAC110-60-140. Notification of changes by pharmaceutical processor or cannabis dispensing facility.

A. Unless otherwise provided in law or regulation, the PIC or the responsible party designated on the application of the pharmaceutical processor or a cannabis dispensing facility shall provide any notification or information that is required from a pharmaceutical processor or a cannabis dispensing facility with respect to their designated areas of oversight.

B. Prior to making any change to the pharmaceutical processor or cannabis dispensing facility name, the pharmaceutical processor or cannabis dispensing facility shall submit an application for such change to the board and pay the fee.

C. Any person wishing to engage in the acquisition of an existing pharmaceutical processor or cannabis dispensing facility, change the location of an existing pharmaceutical processor or cannabis dispensing facility, make structural changes to an existing pharmaceutical processor or cannabis dispensing facility, or make changes to a previously approved security system shall submit an application to the board and pay the required fee.

1. The proposed location or structural changes shall be inspected by an authorized agent of the board prior to issuance of a permit.

2. Cannabis, oil acquired from industrial hemp extract, or cannabis products shall not be moved to a new location until approval is granted by the inspector or board staff.

Statutory Authority

§§ 54.1-3442.6 and 54.1-3447 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 35, Issue 23, eff. August 7, 2019; amended, Virginia Register Volume 37, Issue 25, eff. September 1, 2021.

18VAC110-60-150. Pharmaceutical processor or cannabis dispensing facility closings; going out of business; change of ownership.

A. At least 30 days prior to the date a pharmaceutical processor or cannabis dispensing facility closes, either temporarily or permanently, the owner shall:

1. Notify the board;

2. Send written notification to patients with current certification; and

3. Post a notice on the window or door of the pharmaceutical processor or cannabis dispensing facility.

B. The proposed disposition of all Cannabis, oil from industrial hemp, cannabis products, dispensing records, patient information records, and other required records, as applicable, shall be reported to the board. If the Cannabis, cannabis products, and records are to be transferred to another processor located in Virginia or to another cannabis dispensing facility in the same health service area, the owner shall inform the board and the patients and include on the public notice the name and address of the processor or cannabis dispensing facility to whom the Cannabis, cannabis products, and records are being transferred and the date of transfer.

C. Exceptions to the public notice shall be approved by the board and may include sudden closing due to fire, destruction, natural disaster, death, property seizure, eviction, bankruptcy, or other emergency circumstances. If the pharmaceutical processor or cannabis dispensing facility is not able to meet the notification requirements, the owner shall ensure that the board and public are properly notified as soon as the owner knows of the closure and shall disclose the emergency circumstances preventing the notification within the required deadlines.

D. In the event of an exception to the notice, the PIC, responsible party, or owner shall provide notice as far in advance of closing as allowed by the circumstances.

E. At least 14 days prior to any change in ownership of an existing pharmaceutical processor or cannabis dispensing facility, the owner shall notify the board of the pending change.

1. Upon any change in ownership of an existing pharmaceutical processor or cannabis dispensing facility, the dispensing records for the two years immediately preceding the date of change of ownership and other required patient information shall be provided to the new owners on the date of change of ownership in substantially the same format as previously used immediately prior to the transfer to provide continuity of services.

2. The previous owner shall be held responsible for assuring the proper and lawful transfer of records on the date of the transfer.

3. If a new owner's share constitutes 5.0% or greater of the total ownership, the new owner shall submit to fingerprinting and the criminal history record search required of § 54.1-3442.6 of the Code of Virginia.

Statutory Authority

§§ 54.1-3442.6 and 54.1-3447 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 35, Issue 23, eff. August 7, 2019; amended, Virginia Register Volume 37, Issue 25, eff. September 1, 2021.

18VAC110-60-160. Grounds for action against a pharmaceutical processor permit or a cannabis dispensing facility.

In addition to the bases enumerated in § 54.1-3316 of the Code of Virginia, the board may suspend, revoke, or refuse to grant or renew a permit issued; place such permit on probation; place conditions on such permit; or take other actions permitted by statute or regulation on the following grounds:

1. 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 cannabis products that is authorized under state law and regulations;

2. 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;

3. Failure to maintain effective controls against diversion, theft, or loss of Cannabis, cannabis products, or other controlled substances;

4. Intentionally or through negligence obscuring, damaging, or defacing a permit or registration card;

5. Permitting another person to use the permit of a permit holder or registration of a qualifying patient, parent, legal guardian or registered agent, except as required for a registered agent to act on behalf of a patient;

6. Failure to cooperate or give information to the board on any matter arising out of conduct at a pharmaceutical processor; or

7. 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 or cannabis dispensing facility. 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 cannabis dispensing facility.

Statutory Authority

§§ 54.1-3442.6 and 54.1-3447 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 35, Issue 23, eff. August 7, 2019; amended, Virginia Register Volume 37, Issue 1, eff. September 30, 2020; Volume 37, Issue 25, eff. September 1, 2021.

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