Pennsylvania's Medical Marijuana Program Launches Second Phase

PA's Department of Health just announced the launch of Phase Two and this is what you need to know.

By Steve Schain, Senior Attorney at Hoban Law Group.

After blitzing through @500 applications in 90 days, nine months ago Pennsylvania's Department of Health ("DOH") awarded 12 grower/processor and 27 dispensary medical marijuana licenses ("First Phase").

After generally awarding licenses to the best funded applicants with proven track records of success. the DOH just announced the launch of its Medical Marijuana Program's Second Phase ("Second Phase") and here's what you need to know.

PA's Medical Marijuana Program

Defined by the Medical Marijuana Act, 35 P.S. §§ 10231.101-10231.2110, regulations promulgated there under, and Medical Marijuana Organization ("MMO") Permit Application ("Application") (hereafter, collectively referred to as "PA Marijuana Law"), the Program encompasses 17 "serious medical conditions" eligible for marijuana prescription including "post traumatic stress disorder".

Authorizing 25 grow/processing licenses and 50 dispensary licenses, each empowering the licensee to open 3 locations for up to 150 dispensaries, leading trade publication Marijuana Business Daily estimated that if even less than 1% of the Commonwealth's 12.8 million residents participate, the Program would be populated by over 100,000 card holders generating $100 to $150 million in annual sales revenue.

Dividing Pennsylvania into 6 delineated geographic regions, the DOH launched a competitive, "1000 point scoring system" based on factors including respective region's population, number of "serious medical condition" suffering patients, serious medical conditions types, public transportation access, and rural and urban areas health needs. Because applicants compete inter-Regionally, a winning Region 6 score may fall short of that which prevailed in Region 1.

Requiring that each MMO's application provide a "Diversity Plan" defined as a strategy promoting or ensuring diverse groups participation in an MMO's ownership, management and operation through contracting and employment opportunities, the Program's scoring rubric apprised that 100 potential points would be awarded for "Diversity" and "Community Impact", respectively. Further, unlike Alaska, Colorado and Washington State's programs' launch, the Program imposed no "residency requirement" removing any "barriers to entry" for out-of-state-interests.

Phase One

On June 20, 2017, the DOH awarded 12 grower/processor - - and on June 26, 2017, 27 dispensary - - licenses. All 12 licensed Phase One grow/processors are approved to operate and 9 of the 27 dispensary permittees are actively dispensing.

25,573 patients have registered, 9,020 patient certifications have been issued and 6,683 patients have purchased marijuana from Pennsylvania dispensaries.

866 physicians have registered to participate in the program, 473 of which have been approved.

Program's Phase II

Phase Two is comprised of issuing 13 grower/processor and 23 dispensary permits. Two grower/processor permits will be issued in each of the Commonwealth's six medical marijuana regions with the 13th permit awarded to the highest scorer.

Dispensary permits will be issued as follow: 9 in Region 1; 3 in Region 2; 3 in Region 3; 2 in Region 4; 4 in Region 5; and 2 in Region 6.

On April 5th applications will be available online at medicalmarijuana.pa.gov and have a May 17th submission deadline.

Clinical Registrant Program

Eight "clinical registrant" permits are available the permittee for which will receive both a grower/processor and dispensary license and must have a relationship with a Pennsylvania acute care research center ("ACRC") that is affiliated Pennsylvania licensed acute care or urgent care hospital.

The ACRC must first apply to be approved for the program beginning on April 5th with a deadline of May 3rd, On May 24th, the DOH will make the clinical registrant application available, the submission deadline for which is July 12th.

Steve Schain is a Senior Attorney to Hoban Law Group and admitted to practice in Pennsylvania and New Jersey. Steve represents entities, governments and individuals in choosing a structure, preparing and submitting license application, regulation, compliance and litigation, and drafting legislation. A nationally recognized consumer finance litigation, banking law and cannabis law expert, Steve is a The Legal Intelligencer and Cannabis Business Executive columnist, frequent Pennsylvania Bar Institute and National Bar Institute author and lecturer and serves as a court appointed judge pro tempore and arbitrator. He can be reached at steve@hoban.law.

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