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Doctors and dispensaries may not advertise participation in PA’s medical marijuana program but they can educate the public.

Despite some serious concerns caused by Attorney General Jeff Sessions’ decision to abandon the Cole Memo guidelines for how the Department of Justice would treat state medical and recreational marijuana programs, the legal state programs are continuing to move forward. There is simple too much demand, interest, and money involved in the marijuana industry to put the genie back in the bottle.

Pennsylvania’s medical marijuana program is set to begin in full this year. To date, the Pennsylvania Department of Health has approved 10 grower/processors to begin operations and three dispensaries. The demand and interest is evident and hundreds of millions of dollars have been invested in Pennsylvania’s Medical Marijuana Program. Given the substantial investment in the program, you would think it would be a high priority to notify and educate interested patients on how to participate in the program. However, Pennsylvania law prohibits growers/processors and dispensaries from advertising or promoting themselves.

Moreover, certified doctors are prohibited from advertising their services to write cannabis recommendations. As marijuana is still illegal under federal law, doctors cannot prescribe medical marijuana but may write recommendations under state law. There are over 14,000 patients who have registered but only 2,300 have been certified by doctors. Additionally, physicians continued to register to participate in the program with over 625 registered, of which 326 have been certified by the state.

Given the level of interest and investment, one would think it would be a priority to notify patients on how they can participate in the program, to identify doctors who can recommend medical marijuana and to list where it can legally be purchased. Certified doctors and dispensaries are listed on the Department of Health’s website but the Department of Health has no budget for advertising the program. The Pennsylvania Department of Health believes that all the information a patient will need is on the state’s website.

Dispensaries and doctors must get creative. Under the law, there is no prohibition against educating the public about the medical marijuana program. Dispensaries and doctors can post educational blogs, youtube videos, and/or devote sections of their websites to informing people of the program. Use social media to promote the program itself but do not advertise. So long as there is no direct advertisement or publication of their participation in the medical marijuana program, participants in the program should not run afoul of the law. Instead, they may direct any prospective patients to the Department of Health’s website where the certified doctors and approved dispensaries are legally listed. Certified doctors and approved dispensaries will have to thread the needle until the law changes.

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Pennsylvania Announces the First Phase of Permit Applications for Grower/Processors and Dispensaries.

Yesterday, Secretary of Health, Dr. Karen Murphy of the Pennsylvania Department of Health (“DOH”) announced that applications for medical marijuana grower/processors and dispensaries will be available at the Pennsylvania DOH’s website, www.health.pa.gov, beginning January 17, 2017. Permit applications will be accepted from February 20, 2017 until March 20, 2017.

In less than a year, Pennsylvania’s Medical Marijuana Act (“MMA”) has gone from enactment to the first phase of implementation. Pursuant to chapter 6 of the MMA, Section 601 authorizes grower/processors and dispensaries as the only entities authorized to receive a permit and operate as a medical marijuana organizations and grow, process or dispenses medical marijuana.

Section 602(a) of the MMA generally requires all applications to include:

1. Verification of all principals, operators, financial backers or employees of a medical marijuana grower/processor or dispensary.
2. A description of responsibilities as a principal, operator, financial backer or employee.
3. Any release necessary to obtain information from governmental agencies, employers and other organizations.
4. A criminal history record check.
5. Details relating to a similar license, permit or other authorization obtained in another jurisdiction, including any suspensions, revocations or discipline in that jurisdiction.
6. A description of the business activities in which it intends to engage as a medical marijuana organization.
7. A statement that the applicant: (i) Is of good moral character; (ii) Possesses the ability to obtain in an expeditious manner the right to use sufficient land, buildings and other premises and equipment to properly carry on the activity described in the application and any proposed location for a facility; (iii) Is able to maintain effective security and control to prevent diversion, abuse and other illegal conduct relating to medical marijuana; and (iv) Is able to comply with all applicable Commonwealth laws and regulations relating to the activities in which it intends to engage under this act.
8. The name, residential address and title of each financial backer and principal of the applicant. Each individual, or lawful representative of a legal entity, shall submit an affidavit with the application setting forth: (i) Any position of management or ownership during the preceding 10 years of a controlling interest in any other business, located inside or outside this Commonwealth, manufacturing or distributing controlled substances; and (ii) Whether the person or business has been convicted of a criminal offense graded higher than a summary offense or has had a permit relating to medical marijuana suspended or revoked in any administrative or judicial proceeding, and
9. Any other information the department may require.

Section 607 of the MMA sets forth the following fees and requirements to obtain a permit.

For a grower/processor:  1) An initial nonrefundable application fee of $10,000 must be paid; 2) A permit fee of $200,000 is required at the time of application. (The fee shall be returned if the permit is not granted); and 3)  A grower/processor must have at least $2,000,000 in capital, $500,000 of which must be on deposit with a financial institution.

For a dispensary: 1) An initial nonrefundable application fee of $5,000 must be paid: 2  A permit fee of $30,000 for each location must be paid. (The fee shall be returned if the application is not granted); and 3) A dispensary must have at least $150,000 in capital, which must be on deposit with a financial institution.

In October and November, the DOH drafted and published general regulations as well as specific regulations for both grower/processors and dispensaries. The regulations can be found at 28 PA. Code CHS 1141, 1151, and 1161.

Pursuant to 28 PA. Code §1141.23, no more than 25 permits will be issued for grower/processors and only one grower/processor permit per applicant. Additionally, no more than 50 dispensary permits will be issued and no more than five dispensary permits to one person. A dispensary permit may be used at no more than three locations.

28 PA. Code §1141.28 states the DOH shall publish in the Pennsylvania Bulletin notice of the initial permit application availability and the timeframe which they will be accepted. Only the form of application provided on the DOH’s website may be used and it must be submitted electronically.

Secretary Murphy further announced that this was the first phase of the program and that initially up to 12 permits will be issued for grower/processors and up to 27 permits will be issued for dispensaries, across Pennsylvania’s six medical marijuana regions. Secretary Murphy stated that “the decision for which counties will be issued permits in this first phase was determined by using the department’s medical data, as well as comments from more than 5,000 patients and nearly 900 potential grower/processors and dispensary applicants.” For further information on how many permits will be issued per each region please read the blog at http://cannabisindustrylawgroup.com/index.php/2016/12/21/pa-department-of-health-outlines-phase-i-of-medical-marijuana-program/

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