HARRISBURG — Pennsylvania’s medical marijuana program is dominated by companies that cut their teeth in the business in other states before gaining a foothold in Pennsylvania.
Act 16 of 2016, which legalized the use of medical marijuana, set a high financial bar for growers and processors.
“It took financial resources to participate,” said Dr. Rachel Levine, Pennsylvania Health Secretary.
Would-be growers had to pay a $10,000 nonrefundable application fee, followed by a $200,000 fee to get the permit, according to the requirements spelled out in Act 16. On top of that, the growers had to prove to the state that they had $2 million in capital, including $500,000 in the bank, according to the law.
The bar was only a little lower for dispensary applicants. The non-refundable application fee was $5,000, followed by a $30,000 permit fee, according to Act 16. To get a dispensary license, the applicant had to demonstrate they had $150,000 in the bank, according to the law.
That cut off access to local growers and Pennsylvania entrepreneurs, but it provides greater reassurance that the companies in place will be able to deliver ample quantities of high-quality medical-grade marijuana, said Patrick Nightingale, executive director of the Pittsburgh chapter of NORML.
“I think it’s unfair that small Pennsylvania growers got squeezed out” of the state’s medical marijuana program, he said.
The trend seemed to play out that way across rural Pennsylvania as most growers and dispensaries are operated by companies with out-of-state connections.
-- Green Thumb Industries is operating a growing facility in Danville, Montour County, and dispensaries in Hermitage, Mercer County, and New Castle, Lawrence County. The company is based in Illinois and has marijuana facilities in 12 states — California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York and Ohio, in addition to the Pennsylvania locations.
-- INSA is operating a growing facility in Shamokin Dam, Snyder County. The company is based in Massachusetts and has marijuana facilities in that state.
-- FarmaceuticalRx is operating a growing facility in Farrell, Mercer County. The company also has locations in Ohio and the LinkedIn page for president and CEO Rebecca Myers indicates she’s from Orlando, Fla.
-- Hanging Gardens, which will operate a growing facility in Johnstown, has a business address in Philadelphia. But the owners are from Massachusetts, according to Hanging Garden’s permit application. The Johnstown facility will be the company's first.
The winning applicants for medical marijuana permits ended up being “people who had made a lot of money” in either another industry or elsewhere in the cannabis industry, said Becky Dansky, who’d lobbied for Act 16’s passage while working for the Marijuana Policy Project.
Both Dansky and Nightingale said there are valid reasons to believe that attracting financially-secure and highly-qualified suppliers and dispensers makes sense for medical marijuana.
Dansky said that it may be easier for states to be comfortable awarding permits to a wider variety of potential growers and dispensaries when the product is recreational marijuana instead of medical cannabis.