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A marijuana grow operation in Colorado. (Pixabay photo)

Bill to allow corporations to raise medicinal marijuana would clarify law

BISMARCK, N.D. — The North Dakota Secretary of State's Office testified that removing the growing or processing of marijuana from the definition of farming or ranching would clear up confusion about whether medical marijuana "compassion centers" have to comply with state's ban on corporate farming.

North Dakota's existing corporate farming law limits corporate farming to entities that consist of up to 15 shareholders who must be closely related or closely related through marriage. Under Senate Bill 2200, marijuana grown for medicinal purposes under North Dakota law would not be considered farming or ranching.

SB 2200 unanimously passed the Senate in late January but has yet to be assigned to a House committee. Floor testimony on the bill did not explain why it was necessary.

According to written testimony from the Secretary of State's Office, which was provided to the Senate Agriculture Committee, when North Dakota voters chose to enact a medicinal marijuana law, the office began receiving filings from corporations and limited liability companies indicating an intent to be involved in growing and processing marijuana. Some people in government believed that growing marijuana fell under the definition of horticulture, which would have required compliance with the corporate farming law. Others felt it was not the legislative intent to make compassion centers comply with the corporate farming law because legislation passed subsequent to the election excluded the growing and processing of medical marijuana related to taxation from the definition of "farmer" in state law. The legislation passed by the 2017 Legislature also required compassion center applicants to submit articles of incorporation or articles of organization.

An opinion from Attorney General Wayne Stenehjem in April 2018 also found that "the manifest purpose of the corporate farming law is to prevent certain corporations from directly or indirectly engaging in the business of farming or ranching by limiting their ownership of farmland." The opinion pointed out that past opinions from the office also had found that golf courses, a feedlot, a beekeeping business and a "greenhouse-type operation" did not constitute corporate farming under certain conditions.

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