Nebraska Medical Cannabis Commission Will Lack Funds To Operate Under Governor’s Plan, Unless Lawmakers Act

“This funding authority will allow for [the Cannabis Commission] to operate, combined with registration fees for revenue.”

By Zach Wendling, Nebraska Examiner

The governor’s push for the executive branch to take on Nebraska medical cannabis regulations as a way to sidestep pending legislation at the statehouse would include no additional funding for months.

Gov. Jim Pillen’s (R) spokesperson and the director of the Nebraska Department of Administrative Services confirmed Monday that under Pillen’s plan announced Friday, the Nebraska Medical Cannabis Commission still would have no additional funds to spend on developing rules or regulations.

He announced his plan as lawmakers are set to debate Legislative Bill 677 Tuesday, which would legislatively create additional rules and regulations for the medical cannabis laws that voters overwhelmingly approved in November.

Under Pillen’s approach, the commission would need to make up for any spending later, such as through registration fees, though the commission’s ability to raise such revenue remains uncertain, as the Nebraska Attorney General’s Office has pledged to sue the new commission if it issues any state licenses for medical cannabis.

Pillen and Attorney General Mike Hilgers (R) have questioned the legality of medical cannabis, though Pillen formally certified the vote in December and the laws have been in place since.

The governor’s Friday announcement referenced “operational funding” that had already been appropriated for the regulatory work, but when the next two-year state budget passed Thursday, it included limited new funding.

The Appropriations Committee offered an annual $30,000 each of the next two fiscal years for employees in the Liquor Control Commission, who take on additional duties under the new medical cannabis-related laws. In comparison, the Liquor Control Commission has a $2 million annual budget, including for enforcement of regulations.

The Medical Cannabis Commission has no additional funding for the remaining two months of the current fiscal year.

The voter-approved laws required regulations by July 1 and licensing by October 1.

The Department of Administrative Services, which Pillen oversees, can provide limited financial support to agencies crafting regulations. Pillen spokesperson Laura Strimple, citing Lee Will, the DAS director who previously oversaw the state’s budget, said the Liquor Control Commission has a cash fund spending authority of $100,000 that is “rarely used.”

The new spending would come through a new administratively created cash fund to capture any new revenue.

“This funding authority will allow for [the Cannabis Commission] to operate, combined with registration fees for revenue,” she said in an email.

The one cash fund that the Liquor Control Commission currently has is derived from the commission selling copies of its rules, the law governing its actions and other publications. It also gets funds from fees for registration, server training and more, according to a Legislative Fiscal Office directory of state funds and programs. Just a portion of the fund has been used in recent years.

State law allows the funds to be used for “any administrative costs” associated with specific liquor statutes. Medical cannabis statutes were placed in a different section of the law, and the budget bills did not expressly authorize additional spending from that fund.

This story was first published by Nebraska Examiner.

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Photo courtesy of Chris Wallis // Side Pocket Images.