Medical marijuana farming could move from Louisiana universities to private contractors

The two public universities that have held exclusive rights over medical marijuana farming in Louisiana could soon lose their duopoly after the Legislature approved a bill that will fully privatize cultivation in the state. (Canva image)

The two public universities that have held exclusive rights over medical marijuana farming in Louisiana could soon lose their duopoly after the Legislature approved a bill that will fully privatize cultivation in the state.

Senate Bill 228, sponsored by Sen. Patrick McMath, R-Covington, sailed through the Legislature with little opposition and now awaits Gov. Jeff Landry’s signature.

Louisiana issues only two medical marijuana grower licenses each year. They are currently held by LSU and Southern University. That’s been required by law since the state enacted its medical marijuana program in 2015.

“They are the only two higher education systems in the country that are in the pot business right now,” McMath said, “and it is my belief that it’s time we get them out of that business and let them focus on higher education.”

To get their cannabis farms up and running, the colleges partnered with private contractors Good Day Farm and Ilera Holistic Healthcare. McMath’s bill will transfer the cultivator licenses to those companies and allow them to keep them as long as they file for renewal each year.

Good Day Farm, which has a much larger operation than Ilera, has close ties to the lawmakers who have given it a near-exclusive grip on a lucrative niche market. The company’s primary shareholder is shipbuilding magnate Donald “Boysie” Bollinger, one of the wealthiest persons in Louisiana and a major Republican donor. The company’s president is John Davis, husband of state Rep. Paula Davis, R-Baton Rouge.

Good Day Farm did not respond to a request for comment Monday.

Former state Rep. Joe Marino, who played an instrumental role in helping shape much of Louisiana’s medical marijuana policy, criticized the legislation, saying lawmakers are helping a single company dominate the market.

“It’s a monopoly,” Marino said in a phone interview.

No other companies will get a chance to apply for a grower’s license unless either Good Day Farm or Ilera relinquishes theirs.

While in office, Marino tried unsuccessfully to pass legislation that would have expanded the number of cultivation licenses, arguing that allowing more growers into the industry would help meet the high demand for medical marijuana and make it more affordable for patients at the state’s 10 licensed dispensaries.

Good Day Farm, which has produced far more product than Ilera, will be well-positioned to corner the market by the time the federal government reclassifies marijuana from a Schedule I to a Schedule III drug.

Schedule I drugs are those with the highest potential to create dependency issues and are considered to have “no currently accepted medical use.” As it stands, marijuana is a Schedule I drug, along with heroin, LSD and ecstasy. The Biden administration has proposed moving it down to Schedule III, which includes drugs such as ketamine, testosterone and Tylenol with codeine.

The U.S. Department of Justice has recently proposed the rescheduling plan, which is currently pending public review under a 60-day commenting period.

During a March 20 committee hearing on his bill, McMath said the medical marijuana program was always supposed to be a private industry. The idea to involve the universities was attached to the 2015 legislation in a late-hour floor amendment, he said.

“It was never really their intention to be put into this bill,” McMath said.

A previous version of the bill would have allowed the universities to still receive a percentage of the companies’ gross sales from the medical marijuana program, but that provision was removed from the final version.

While the bill awaits the governor’s signature, state lawmakers are also on track to dismantle a consumable hemp industry they created two years ago after unwittingly legalizing recreational THC products that can get people high. That legislation, Senate Bill 237, sponsored by Sen. Thomas Pressly, R-Shreveport, is pending final consideration on the House floor.

Correction: The universities will no longer profit from the medical marijuana program. A previous version of this article reported on provisions that were removed from the final version of the legislation. 

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