Keystoned: Pennsylvania launches medical marijuana program

By Dave Z (Flickr: CITY HALL PHILADELPHIA) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

By Lauren Rudick

Pennsylvania became the 24th state to legalize medical marijuana when Gov. Tom Wolf signed the Medical Marijuana Act in April.

The Keystone State has the sixth-highest population in the country. The newly-enacted medical program covers a variety of qualifying conditions and creates more licensed organizations (and jobs) than Pennsylvania’s neighbors combined. The act also addresses diversity, affordability and access issues that have plagued other medical states, and grants the state Department of Health the flexibility to expand the program in response to patient needs, as determined through built-in registration, reporting and research requirements.

The act establishes two types of medical marijuana organizations in a for-profit model: grower/processors and dispensaries. Initially, 25 growing/processing permits will be issued, and 50 dispensary permits will be issued. Each dispensary licensee may operate three locations, for a total of 150 statewide. Dispensaries will be geographically dispersed within three regions. Vertical integration is permitted for up to 20% of all grower/processors. There are no residency requirements.

Application and operating fees are as follows:

– Growing/processing: $10,000 non-refundable application; $200,000 refundable initial registration; $10,000 annual renewal. Grower/processors must have $2 million in capital, $500,000 of which must be on deposit with a financial institution.

– Dispensary: $5,000 non-refundable application; $30,000 refundable initial registration: $5,000 annual renewal. Dispensary licensees must have $150,000 in capital, all of which must be on deposit with a financial institution.

Permit applicants must submit, among other things, a complete description of anticipated business activities, fingerprints of all prospective principals, financial backers, operators and employees (for background checks to be run by the state and FBI) and a demonstrated ability to implement effective security measures to prevent diversion of product. They must also submit a statement of good moral character and the ability to run a lawful operation. Permits are revocable and non-transferrable. Drug-related convictions will disqualify financial backers, principals and employees. The Department of Health must implement procedures aimed to foster participation in the permitting process by diverse groups, including minorities, women, service-disabled veterans and small businesses.

In Pennsylvania, qualifying “serious medical conditions” include cancer, HIV/AIDS, ALS, Parkinson’s disease, multiple sclerosis, certain spastic spinal cord injuries, epilepsy, irritable bowel syndrome, Huntington’s disease, Crohn’s disease, PTSD, intractable seizures, glaucoma, certain chronic pain, sickle cell anemia and terminal illnesses with a life expectancy of one year or less. Pennsylvania is also the first state to formally recognize autism as a qualifying condition.

Doctors of medicine or osteopathy are invited to apply for qualification and registration as practitioners who may certify patients for medical marijuana, and must successfully complete a four-hour course. They may not advertise their medical marijuana certification services, nor may they own an economic interest in a license. Practitioners must maintain electronic copies of patient certifications issued, and report to the Department of Health if a patient dies or no longer requires medical marijuana.

For certification, patients must be in the continuing care of a registered practitioner, who has determined that the patient has a documented serious medical condition for which medical marijuana would provide a palliative or therapeutic benefit. During the program’s first two years, parents/guardians of minor patients may seek medical marijuana from other states without violating applicable state law.

Medical marijuana may be produced in the following limited forms: pill, oil, topical, tincture, liquid and vape products. Home grow, dried leaf, whole-plant formulas, smoking and edibles remain unlawful, but patients can incorporate cannabis products into their own food. Patients may purchase a 30-day supply at a time. The Department of Health is tasked with monitoring pricing to ensure patient affordability. Each patient is permitted two caregivers, and each caregiver is permitted five patients, all of whom are required to carry state-issued identification cards when in possession of medical cannabis. Identification cards require a $50 processing fee, which may be waived for financial hardship, and expire after one year or upon death.

Grower/processors must utilize seed-to-sale tracking, and dispensaries must utilize point-of-sale tracking; each must maintain a daily log and satisfy other technical and reporting requirements.  Packaging must be appropriately sealed and labeled. Cultivation must be indoor with electronic security. Quality and safety will be largely self-regulated, but grower/processors have an ongoing obligation to provide the state, patients and caregivers with such documentation.

The act imposes a 5% excise tax paid by grower/processors on gross sales receipts to dispensaries. Proceeds will be deposited in a program fund and are allocated among the Department of Health, drug prevention programs, counseling and treatment programs, safety and use, background checks and local police departments. Sales to patients/caregivers are exempt from sales tax.

The act will take approximately 12-24 months to ramp up and the Department of Health has yet to promulgate applicable regulations. But given its size and the multiple research obligations supporting and encouraging program expansion, the program stands to be among the most comprehensive in the nation.