Nebraska Medical Cannabis Commission Holds First Meeting Just Weeks Before Key Deadline

*A commissioner said his “gut feeling, realizing what a short window it
is,” is that the board will “most likely” need to consider emergency
regulations.*

*By Zach Wendling, Nebraska Examiner*

The Nebraska Medical Cannabis Commission hosted its inaugural meeting
Monday ahead of a fast-approaching July 1 deadline to set licensing
criteria and an October 1 deadline to begin issuing licenses.

Emergency regulations will more than likely need to be adopted to meet the
July deadline that voters approved in November, because of public hearing
notice requirements for regulatory changes.

Next steps remain unclear for the commission, which has a very limited
amount of funds for the task. Commissioner Bruce Bailey of Lincoln, who
separately chairs the Nebraska Liquor Control Commission, said the goal is
to come up with something to show the public by July 1 and seek feedback.

“That’s where we are at this time,” Bailey told reporters after the
meeting. “’Til then, we really don’t know anything.”

Bailey said his “gut feeling, realizing what a short window it is,” is that
the board will “most likely” need to consider emergency regulations.

*Next regulatory steps*

Assistant Nebraska Attorney General Ben Swanson, who explained the typical
rulemaking process to commissioners on Monday, said he would address the
emergency process at the next commission meeting at 10 a.m. on June 26. The
commission was still deciding on a location. It was not immediately clear
whether the group would hold additional meetings before the July 1 deadline.

Under normal rulemaking conditions, an agency or commission drafts
guidelines and sets a hearing for public comment. The public must be
notified at least 30 days before said hearing.

If commissioners approve the proposed rules and regulations later this
month, with no significant changes, the guidance will be sent to the
Attorney General’s Office for constitutional review. The governor has final
say on the rules and regulations before they are filed with the Secretary
of State’s Office.

If the commission makes significant changes, there must be another hearing
with another 30-day notice.

Much of the first meeting focused on administrative hurdles, including the
Open Meetings Act for virtual and in-person meetings and support from the
Nebraska Department of Administrative Services for budget control and human
resources.

*‘We have to take the wins’*

Bailey and Crista Eggers, executive director of Nebraskans for Medical
Marijuana, the group that led the new laws through the process to the
measures’ 2024 wins at the ballot box, described Monday’s meeting as a
needed “step.”

“We have to take the wins when we get the wins,” Eggers told reporters.
“Today, having a meeting was a win.”

However, Eggers cautioned that major questions remain about how the
commission will find funds to work, the timeline for future regulations and
how commissioners will respect what the people had in mind when they passed
the new laws.

“We have always been committed to sticking in here and advocating and
fighting and educating until the day that we see Nebraska patients who need
medical cannabis as an option have it, that it’s accessible to them, that
it’s safe for them,” Eggers said. “That day is not here yet.”

*Unclear budget authority*

State lawmakers in May approved a two-year state budget with a $30,000
increase in the Nebraska Liquor Control Commission’s bottom line for
staffing related to any of the commission’s shared duties with the Nebraska
Cannabis Commission, for staff who might take on new duties under the
medical cannabis law.

Voters placed all three members of the Nebraska Liquor Control Commission
on the Medical Cannabis Commission. The governor changed the commission’s
members in recent weeks by choosing not to reappoint Harry Hoch Jr. to the
2nd Congressional District seat, leaving just Bailey and Commissioner Kim
Lowe of Kearney, as first reported by the Nebraska Examiner.

However, lawmakers didn’t approve creating a new budget line for the
Medical Cannabis Commission the way they did when the Asian American
Affairs Commission was created in 2024. Lawmakers also declined to pass a
bill clarifying the framework within the Liquor Commission for medical
cannabis-related spending and revenue collection.

The result is an unclear system that commissioners started grappling with
on Monday.

Jacob Leaver, deputy state budget administrator, said spending from a
Liquor Control Commission cash fund should be used for the “bare minimum.”

He suggested that the cannabis commissioners approve a “subprogram” in the
state budget, which can be done administratively but doesn’t equate to new
spending. He said commissioners “theoretically have $0 of appropriation.”

“Essentially, you have to ‘borrow’ [an] appropriation from the liquor side
into that new subprogram for the medical cannabis side,” Leaver said.

The Liquor Control Commission has one cash fund, with a maximum annual
spending limit of $100,000, which was slightly increased this spring. The
fund collects revenue from various liquor-related fees, such as for
registration or server training, or from selling copies of governing rules
and other documents. The fund is rarely used but tapping into it creates a
new juggling act.

State law allows those 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.

*‘We’ll do our best’*

Bailey asked whether those funds could be paid back if the Liquor Control
Commission authorized diverting funds for the Medical Cannabis Commission.
Leaver said “yes and no,” as the Medical Cannabis Commission collects no
general state taxes (income, sales, etc.) but could direct application
fees, for instance, back to the cash fund.

Liquor commissioners could ask the Legislature for more funds in 2026 or
backfill spending, state budget officials have said.

Bailey told reporters the commission would look into getting some funds
soon in the face of a tight budget but “a large goal.”

“We’ll do our best, as we can,” Bailey said.

Bailey and Lowe were sworn into their new roles Monday, as was Dr. Monica
Oldenburg of Lincoln. The trio unanimously voted to elect Oldenburg, an
anesthesiologist, as chair and approved up to two members to meet with
outside consultants or experts and come back with that information.

Commissioner Lorelle Mueting of Gretna missed the first meeting. Oldenburg
defended Mueting as having had a prior commitment and said commissioners
tried to get to work as soon as possible.

*Legal threats*

The AG’s Office did not, as it has in the past, threaten the commission
Monday with a future lawsuit if licensing moves forward by the October 1
deadline. Attorney General Mike Hilgers and his staff have repeatedly
threatened that action, including in court and before the Legislature.

Legal action continues in Lancaster County District Court, with a longtime
marijuana opponent, former State Sen. John Kuehn of Heartwell, trying to
void the new medical cannabis laws. Kuehn’s filings argue that the laws are
an unlawful delegation of power and run afoul of federal laws against
marijuana.

Hilgers and his office have argued the AG should be the one to challenge
the laws on encroaching on federal constitutional powers and have asked
that Kuehn’s case be dismissed.

Lancaster County District Judge Susan Strong is currently considering
whether to dismiss the case. However, a June 5 filing from Kuehn now seeks
to add Oldenburg and Mueting to the case while removing Hoch from the
lawsuit.

Hoch was not reappointed to the commission as Gov. Jim Pillen (R) seeks
someone with more “cannabis experience,” according to Hoch.

“This is a constantly evolving and fast-moving controversy as government
actors actively seek new ways to use taxpayer resources to implement the
measures at issue,” the latest court filing from Kuehn said.

*‘Voters…are watching’*

One of Kuehn’s attorneys, former State Sen. Andrew La Grone, attended
Monday’s inaugural meeting of the Cannabis Commission.

Kuehn’s lawsuit also targets Pillen, Secretary of State Bob Evnen, other
state officials and the three sponsors of the 2024 campaign, including
Eggers.

Eggers said she hopes the commission remembers the lives at the center of
the fight, including her son who has a severe form of drug-resistant
epilepsy. She said the window of opportunity to work together for safe
access remains open.

“I hope they approach this remembering that the decisions and the way they
do this does impact real people, and those real people and the patients and
the voters of the state are watching,” Eggers said of the commission. “I
believe they have a very, very strong expectation to how this goes.”

*This story was first published by Nebraska Examiner.*

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*Photo courtesy of Mike Latimer.*

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