Committee Blog: Announcing Winners of NCIA’s State Regulatory Committee 2024 CannaStar Awards

National Cannabis Industry Association’s State Regulation Committee announces 2024 award winners for cannabis regulatory and program rollout success in 8 states

State-level cannabis regulations are a moving target; or rather, 50 moving targets. Despite nationwide movement in nearly every US state towards a regulated, adult-use market, each state has approached cannabis sales with their own unique flair. 

Although it has been fun to watch each state’s program mature under their own particular point of view, as we move forward into 2025 our committee wants to call attention to some of the states we feel are getting it right.

The National Cannabis Industry Association State Regulatory Committee (NCIA’s SRC) hopes that by highlighting the successes (some of them unlikely) in individual states, we can inspire states to come together to share best practices, work towards eliminating redundancies for multistate operators, and create a streamlined framework that allows for greater access to the market for both would-be operators and consumers.

Without further ado, here are the National Cannabis Industry Association State Regulatory Committee’s CannaStars for 2024!

Best Social Equity Program: Illinois

Through the Illinois R3 Program (Restore, Reinvest, Renew), 25% of Illinois cannabis tax revenue is reinvested into communities disproportionately impacted by the War on Drugs, funding initiatives like job training, reentry services, and legal aid. Since launching, this has amounted to $244M in marijuana-funded revenue grants to community organizations that address disinvestment and excessive incarceration in Illinois. 

Illinois also prioritizes social equity applicants for licensing by offering additional points on applications, reduced fees, and conditional licenses for roles such as craft growers and transporters. Further, the Cannabis Business Development Fund provides low-interest loans and grants to social equity applicants, helping reduce financial barriers to starting a cannabis business.

Like every state, Illinois continues to navigate the complexities of implementing a fair social equity program. However, the state has also backed up their commitment to restorative justice with criminal record reform. They have identified more than 770,000 records of “minor cannabis offenses” that may be eligible for expungement.

Currently, of the 25 jurisdictions with legal adult-use cannabis programs, 18 have an active social equity program. NCIA’s SRC believes that Illinois leads the nation with a model for social equity within cannabis that truly prioritizes a fair, restorative model.

Best Hemp Regulation: Kentucky

Kentucky’s hemp program stands out as a model of safety, transparency, and innovation due to its prioritization of registration and rigorous testing of hemp products. In Kentucky, all hemp-derived cannabinoids must undergo purity testing and remain compliant with THC limits. Packaging and labeling must also be clear and meet rigorous standards, similar to those in the adult-use markets of other states.

Although enforcing hemp producers and sellers to comply with tight standards has been met with some controversy, NCIA’s SRC believes that Kentucky’s efforts are a good thing and reinforce trust in the marketplace for consumers. California’s outright ban on intoxicating hemp derived products in 2024 has made it clear that lax regulations on hemp put the reputation of the entire cannabis industry at risk.

Beyond safety, Kentucky’s Cabinet for Health and Family Services does an outstanding job fostering collaboration. They engage farmers, processors, and retailers through education and support, and are transparent about regulatory changes and best practices. Their forward-thinking approach has positioned Kentucky as an ideal place for farmers and cultivators throughout the country.

Best Balance of Cannabis and Hemp Regulations: Minnesota 

When Minnesota voted to legalize adult-use cannabis in 2023, the state already had a thriving hemp-derived THC product market. Instead of bulldozing the existing hemp market, Minnesota has instead worked to bridge the gap and create a cohesive framework that supports existing businesses, innovation, while also prioritizing public safety and further economic growth.

One of Minnesota’s key strengths is its integrated approach to regulation: hemp and adult-use cannabis are regulated centrally. This is a substantially different model than many other states, where cannabis and hemp are managed by separate regulatory bodies. By overseeing hemp-derived THC products and cannabis under a unified system, the state avoids market confusion and ensures consistent quality standards. 

By carefully integrating cannabis and hemp regulation, Minnesota has positioned itself as a model for other states. NCIA’s SRC believes that the Minnesota model – a two-tiered system where lower THC products can be manufactured and sold more readily while higher concentrates of THC are sold through a traditional adult-use framework – merits consideration nationally as a way to increase access, safety, and roll-out adult-use without disrupting existing businesses.

Best Legislator: New Mexico State Senator Katy Duhigg 

Elected in 2021, Senator Katy Duhigg (D) represents Albuquerque Senate District 10. Duhigg is the former Albuquerque City Clerk, with a background in election and consumer protection, and is currently one of the premier cannabis attorneys nationally, as a member of Sutin, Thayer & Browne’s litigation group. Her current practice is focused on cannabis law, including corporate development and governance, regulatory compliance, administrative advocacy, and contracts. As a State Senator, she brings extensive cannabis knowledge to her role, and has been critical in allowing New Mexico to emerge as an unlikely success story in adult-use cannabis.

Senator Duhigg serves as Chair of the Senate Rules Committee, and as Vice Chair of the Senate Judiciary Committee, where cannabis-related legislation enjoys the most rigorous discussion. Her commitment to the cannabis industry was witnessed during her very first legislative session, wherein the Cannabis Regulation Act was passed, legalizing cannabis for adult use in New Mexico. 

The Cannabis Regulation Act was signed by Governor Lujan Grisham in June, 2021 and New Mexico was able to roll out their program quickly and effectively. Less than a year later, on April 1, 2022, New Mexico was open for business. There are now 2866 active license holders. 

Since the passage of the CRA, Sen. Duhigg has been absolutely implemental, leading the charge in the Senate to improve the enabling legislation and to ensure New Mexico’s cannabis industry continues to mature, with strong equity protections that include uplifting the existing medical operators who have been serving the state since the beginning of New Mexico’s medical cannabis program in the 1970s. 

Best Age Verification Guidelines: Nevada

Cannabis is frequently subject to “think of the children” style regulations and moral panic, but states often miss the mark when actually trying to put guidelines in place that protect minors and keep products out of their hands. 

Nevada is still the first, and only, state to require any type of ID authentication to detect fake and suspicious IDs, and the Nevada Cannabis Control Board remains the most well-educated regulatory body on the subject of the forensic document analysis required to actually separate adult users from minors presenting false identification. 

Furthermore, in March 2023, Nevada Assemblyman Brian Hibbets introduced AB342 – special interest legislation – that would have required onerous, and expensive third party checks as part of the Nevada dispensary age verification process. The Nevada State Legislature smartly shot down this amendment, which was vendor-specific language desperately seeking a problem that doesn’t exist in a state where every dispensary is doing the absolute most to detect fake IDs and keep minors out. 

As of May 2024, Nevada is also the only state to include any guidelines for age verification of cannabis purchase via eCommerce, or age verification for cannabis delivery. This makes Nevada the top state in the nation for preventing underage sales, but with a common-sense approach that doesn’t try to add unnecessary burdens to their cannabis operators.

Best Challenge to the DEA: Georgia 

In 2023, Georgia took the bold step of deploying their medical program directly into independent pharmacies across the state. With a limited product mix and a nascent patient base, this was an innovative way to jump-start a program and avoid high capital costs. The program was on track to get 90% of the medical cannabis patient base accessible within a 30-minute drive within 6 months of launch. 

Unfortunately, in November 2023, the DEA sent an ominous letter to ice the exciting new rollout, reminding pharmacists that cannabis is still a Schedule I substance. However, instead of capitulating to the threat, the industry persisted and the state stood by to support the program with 52 pharmacies remaining active license holders. NCIA’s SRC celebrates Georgia’s commitment to medical cannabis patients and increasing access, in spite of federal threats. 

Best Tax Rate Reform: Washington State

The culmination of a 5-year effort finally succeeded in removing all state taxes from Washington Department of Health-compliant products when purchased by registered medical patients. This matches the standards for pharmaceutical purchases in nearly every US state, where prescribed medications are non-taxable. Washington now joins 10 other states who do not tax medical cannabis purchases.

Since 2016 The Cannabis Alliance, Washington’s largest cannabis trade organization, has been advocating for the reduction or removal of the 37.5% state excise tax on medical cannabis products. Now, as of June 6, 2024, registered medical patients can purchase prescribed cannabis tax-free, a nearly 50% reduction in total cost to medical consumers. The state also introduced new higher testing standards for medical products, a patient registry, and a medical cannabis consultant license provided to budtenders. 

Although adult-use cannabis in Washington still remains subject to a 37% tax, and the NCIA SRC acknowledges that taxes are needed to continuously fund state cannabis programs, we want to highlight Washington as the first state in the nation to treat medical cannabis as a medical necessity under the tax code, easing consumer financial burdens, and helping better position medical cannabis as a legitimate and needed treatment for many conditions.

Best Employee Protections: Nevada

Nevada leads the way with some of the strongest employee protections in the United States to ensure legal users of medical or adult-use cannabis do not face workplace discrimination. In 2020, Nevada was the first state to prohibit most employers from rejecting job applicants based on pre-employment marijuana tests. This landmark legislation, codified under Assembly Bill 132, effectively protects job seekers who legally consume cannabis, while still allowing employers to maintain workplace safety standards for positions in safety, aviation, and other high risk roles. Additionally, Nevada law protects employees from penalties for lawful off-duty cannabis use. This includes the stipulation that employers cannot take adverse actions against employees for testing positive for cannabis unless there is a direct safety concern or violation of company policies. 

For medical cannabis users, Nevada law goes a step further by requiring employers to attempt reasonable accommodations for qualifying medical conditions. This requirement, enacted under Assembly Bill 453, emphasizes that individuals using medical cannabis for legitimate health concerns are entitled to workplace protections, similar to those afforded to employees using other prescription medications.

Notably, the Nevada Supreme Court has affirmed employees’ right to sue for violations of these protections, cementing the legal precedent that employees have the right to challenge discriminatory actions based on cannabis use. The court’s decisions have reinforced Nevada’s position as a model for other states considering similar workplace protections for cannabis consumers. These legal safeguards represent a forward-thinking approach to balancing employee rights with workplace safety, and have set a gold standard for workplace cannabis policies across the United States.

Best Regulatory Addition for Market Diversification: Massachusetts

Better late than never, the Massachusetts Cannabis Control Commission recently drafted new social consumption regulations and has moved to the formal public comment stage. As mature markets struggle with oversupply and overlicensing the rate of entity failures and state court receiverships (both voluntary and involuntary) of licensees are steadily on the rise. Massachusetts is among the first states to proactively offer a diversification opportunity for their cannabis program in the form of consumption lounges. 

The draft regulations contemplate three different varieties of social consumption licenses – supplemental, hospitality and event organizer – and would restrict social consumption licenses to only Social Equity Businesses, Social Equity Program Participants, Certified Economic Empowerment Priority Applicants, Microbusinesses, and Craft Marijuana Cooperatives for the first 5 years after program launch. Supplemental licenses would be available to certain existing marijuana establishments and allow for on-site consumption within or attached to an existing facility. Hospitality licenses would permit non-CCC licensed entities to host on-site consumption events in partnership with certain existing marijuana establishments. Finally, event organizer licenses would permit certain existing marijuana establishments to host temporary consumption events.

9 states have already active consumption lounge licensing, and Massachusetts has been considering a social consumption pilot program since 2019, but the NCIA SRC wants to highlight Massachusetts for a considered approach focused on increasing revenue streams for smaller operators and social equity license holders.

Lifetime Achievement Award for Innovation: California

California has consistently led the nation when it comes to innovative and inclusive cannabis policy, going back to their first legalization ballot initiative in 1972. They were the first state to legalize medical cannabis in 1996, and today California still remains a leader in the cannabis industry, driven by its vast market, progressive regulations, and culture of experimentation. 

A key milestone in this evolution was the 2024 California State Fair, which became the first state-sanctioned fair to integrate cannabis sales and consumption on-site, embracing cannabis culture into the mainstream. The state is also pioneering new business models, with cities like West Hollywood and San Francisco operating cannabis lounges that combine cannabis with art, food, and entertainment, reshaping consumption and creating new opportunities and economic growth in hospitality and entertainment. 

California’s commitment to research further enhances its role as a leader, with the University of California system partnering with private enterprises to explore cannabis’s medical potential, including at the UC San Diego Center for Medicinal Cannabis Research. Together, California’s groundbreaking events and innovative business models position it as the epicenter of cannabis innovation.

NCIA’s SRC expects that California will continue to lead the way with an innovative and focused approach to growing its legal cannabis industry.

Conclusion & Congratulations

Congratulations to the 2024 National Cannabis Industry Association State Regulatory Committee’s CannaStars winners! The committee has enjoyed supporting the progress of medical and adult-use cannabis programs across the US, and can’t wait to see what new developments every state has in store for 2025.

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