Medical Cannabis in Pa.

One week into Pennsylvania’s medical marijuana sales, here’s what you need to know

What’s happened and what’s ahead.

The site of a planned medical marijuana dispensary in Pittsburgh's Strip District

The site of a planned medical marijuana dispensary in Pittsburgh's Strip District

ROSSILYNNE CULGAN / THE INCLINE
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Updated: 1:50 p.m. 

Last Thursday, the first legal sales of medical marijuana in Pennsylvania history took place inside a fortress-like building in Butler, near a city baseball field not far from the center of town.

One week later and Pennsylvania’s medical marijuana program is up and running statewide and largely without the shortages and snafus that have plagued similar programs in other parts of the country — at least so far.

That’s not to say there haven’t been issues, and here we look at a few of them, as well as what’s ahead for medical marijuana in Pennsylvania and where experts see reason to celebrate and reason for caution.

Unexplained delays

There were delays in the weeks leading up to medical marijuana’s rollout here.

Perhaps more crucially, though, was the wait for state officials to formally approve two of the state’s 12 permitted growers, even after sales of medical marijuana were officially underway.

One of those growers, AGRiMED Industries in Carmichaels, Greene County, was approved by Gov. Tom Wolf to begin operations this week, the governor’s office announced Thursday, bringing the statewide total to 11 grower/processors out of 12.

The second, AES Compassionate Care in Chambersburg, is still waiting.

“There are 12 permits currently issued for grower/processors in the state, and I believe only 10 are operational, and that’s an issue,” Judy Cassel, an attorney with Cannabis Law PA in Harrisburg, said Thursday before the governor announced his approval of AGRiMED Industries.

“You would think if there was any lag it would be in the dispensary category, and so it’s curious as to why two of these grower/processors are not up and running yet.”

The DOH confirmed Wolf’s approval of AGRiMED Industries on Thursday but offered no further insight into the process or holdup.

Mark Kaminski, chief creative officer with AGRiMED Industries, told The Incline by email that “a number of scheduling factors and the holidays contributed to the delay of the AGRiMED facility being deemed operational,” and that the delays “were due to scheduling constraints by the Department of Health and AGRiMED…”

Kaminski added, “Understandably, this is a new program, and the state is doing a fantastic job ensuring the program is set up for long-term success.”

With their operation newly approved, Kaminski said “a number of processes are underway and we have a lot of work to do such as continuing propagation from seed and clone, growing vegetative plants, growing flowering plants, harvesting flowers from mature plants, and producing medical marijuana products which will be submitted for laboratory approval and testing before being delivered to dispensaries across Pennsylvania. […] We are pleased to report that we have plants in the ground and more seeds under propagation.”

Beyond the occasional manufacturing delay, there’s also the matter of a lawsuit filed by an unsuccessful applicant for one of the state’s grower/processor licenses who has appealed to the Commonwealth court and sought a halt of Pennsylvania’s entire medical marijuana program.

In the scheme of things, advocates hope these are mere speed bumps.

In the near future, Pennsylvania’s plan is to continue to complete the permitting process for the 50 dispensaries and 25 grower/processors allowed under the law. Pennsylvania has only given out half of the total allotment so far.

“We have issued 12 grower/processor and 27 primary dispensary permits. The law allows for up to 25 grower/processors and 50 dispensaries,” said April Hutcheson, communications director with the DOH. “There will be future rounds of permitting to meet the needs of patients. We are working on that timeline now.”

Pennsylvania is also set to distribute 8 grower/processor permits to research hospitals and medical schools to produce marijuana solely for use in clinical research studies. 

A spokesperson with the University of Pittsburgh’s School of Medicine says it has entered into an agreement with a medical cannabis company that is applying for one of the Clinical Registrant permits. That partnership “will allow the School of Medicine to conduct scientific research to determine the safety and efficacy of medical cannabis products in treating specific diseases,” the spokesperson said. There were no further details immediately available.

In Pittsburgh last week, a medical marijuana dispensary in Squirrel Hill began sales a day after the dispensary in Butler did. There is also a dispensary planned for the Strip District by Cresco Yeltrah, a joint venture between Chicago-based Cresco Labs and a Butler company called Yeltrah Cannabis.

Zach Marburger, CIO for Cresco Yeltrah, said they’ve experienced no delays with the state or local officials. “To the contrary, working with them has been a pleasure and very expeditious thus far,” Marburger said.

He added, “We plan to open the Strip location in April and are incredibly excited about the opportunity to operate in such a historic neighborhood.”

Marburger declined comment on sales figures or banking issues that continue to vex marijuana businesses nationwide.

Smokable forms of the drug

At the same time, there is talk of expanding Pennsylvania’s medical marijuana program to include more iterations of the drug, specifically smokable and edible forms. The program currently only covers pills, oils, gels, creams, ointments, tinctures, liquid, and non-whole plant forms — essentially just the less-potent leaves — for administration through vaporization, according to the Marijuana Policy Project. These also represent the most expensive forms of the drug.

The addition of smokable and edible forms would not require legislation or legislative approval. Instead, the decision lies with the Pennsylvania Department of Health, Cassel explained.

“The DOH has an advisory board made up of people, from state top law enforcement people to patient advocates, and that board can recommend to the health secretary things like [medicinal smoking of marijuana] flowers and then the secretary would have to issue regulations,” she added.

Sen. Daylin Leach, D-Montgomery, is among the lawmakers supporting the addition of other plant-based forms of the drug to Pennsylvania’s program, arguing that different forms of the drug hold different therapeutic values.

The state’s temporary medical marijuana regulations are set to expire in December. 

Asked if Physician General/Acting Secretary of Health Rachel Levine supported the addition of marijuana flowers to Pa.’s approved medical marijuana product list, Hutcheson said, “The Medical Marijuana Advisory Board is reviewing the forms of medical marijuana and will make a recommendation to the Secretary. She is waiting for that recommendation before making any decisions.”

But what about the price?

There are also macroeconomic hurdles. The wholesale price of marijuana is dropping as supply outpaces demand nationwide, making it harder for growers to turn a profit. Meanwhile, Pennsylvania producers spend far more than producers in other states, according to Steve Schain, a senior attorney in Philadelphia with the Hoban Law Group, a “cannabusiness” law firm with offices nationwide and clients around the world.

“Number one, the real issue is the price per pound dropping. That’s gonna cause a problem when marijuana in Pennsylvania costs $1,600 per pound to produce and the same pound costs $500 to produce in California,” said Schain.

“[Going forward] The greatest threat to the industry is how are you gonna compete? If you could get a gallon of gas for 50 cents, what would happen to every gas station in western Pennsylvania? They’d go out of business. When the industry gets to a more mature level, you’re gonna see a price war. You’ll see mega farms in California which will hurt mid-sized and small growers.”

According to the Allentown Morning-Call, “Pennsylvania’s relatively limited market is estimated to start at $125 million and grow at an annual rate of 180 percent until it makes up 9.2 percent of the U.S. market share by 2020.”

Pennsylvania officials have said they’re trusting market forces to keep the price of medical marijuana fair and affordable.

“Revenue is important because obviously we want people to make enough money to pay the bills and stay in business,” Cassel said, “but I’m sure no one is in this to make the big bucks. Everyone came into this knowing the risks while believing passionately that this is medicine. I’ve talked to moms with kids with epileptic seizures that have gone from 500 seizures a day to less than 50 using this medication.”

The Department of Health, which oversees Pennsylvania’s medical marijuana program, said it’s too early to compile sales data from the last week. The DOH said medical marijuana has been dispensed to more than 1,100 patients or their caregivers since Thursday.

‘They’ve done an amazing job’

Others want to see Pennsylvania’s list of 17 qualifying medical conditions expanded and the number of prescribing doctors expanded as well.

“Pennsylvania is doing an amazing job,” Schain said Tuesday, days after the first-ever sales of medical marijuana products were recorded here.

“It has hit every deadline and moved much faster than I thought it would,” he added. “Is it perfect? No. Is anything perfect? No. But in the world of legalized marijuana, they’ve done an amazing job — and I’m cynical.”

Schain questioned what the impact of more liberal marijuana policies in neighboring states might be on patronage of Pennsylvania’s medical marijuana program long term.

“Pennsylvania is an oil-based system,” Schain said. “We don’t have flower or infused products. And they say New Jersey’s gonna have 60 dispensaries and if they have adult use [meaning accessible to both recreational and medicinal users without qualification] — if you live in southeastern Pennsylvania and if you have the choice of adult use…”

And while federal law currently prohibits you from buying legal weed in another state and bringing it back home, even if it’s legal in both places, that could change at some point — although it seems unlikely under the current presidential administration — Schain added.

Either way, while states operate their own distinct programs, they do not exist in vacuums or bubbles, and Schain said without more forms of the drug more widely available here, people and patients may go looking elsewhere.

Cassel disagreed, saying, “as long as everyone abides by the law, there isn’t the potential of product demand or supply between states.”

She added, “I think people in Pennsylvania are really super focused on the medical and the research aspect of marijuana now.”

She also pointed out that New Jersey’s medical marijuana program has only 5 qualifying conditions to Pennsylvania’s 17. (New Jersey is considering legalization of recreational use, it should be noted, while Maryland has a medical program in which smokable forms of the drug are allowed. Maryland’s program also has no residency requirement for those receiving medical care there from other states.)

Still, advocates say Pennsylvania’s legalization of medical marijuana in April 2016 was a huge step forward. They just believe there’s room to go even further.