Tag Archives: growers

One company is trying to make a profit before Pennsylvania’s medical marijuana program commences.

Back in June of this year, the Pennsylvania Department of Health granted 12 medical marijuana grower/processor permits to the following companies:

Prime Wellness of Pennsylvania (Berks County)
Franklin Labs (Berks)
Pennsylvania Medical Solutions (Lackawanna)
Standard Farms (Luzerne)
Ilera Healthcare (Fulton)
AES Compassionate Care (Franklin)
Terrapin Investment Fund 1 (Clinton)
GTI Pennsylvania (Montour)
AGRiMED Industries of PA (Greene)
PurePenn (Allegheny)
Holistic Farms (Lawrence)
Cresco Yeltrah (Jefferson)

Under Pennsylvania’s Medical Marijuana Act, in order to obtain a grower/processor permit, an applicant had to pay a nonrefundable $10,000 initial application fee and along with $200,000 for the actual permit. The grower/processor also had to prove it had $2 million in capital on hand. Despite the steep price, the health department still received 177 applications for grower/processor permits and generated $1,770,000.00 in nonrefundable application fees.(The Department of state also received 280 applications for a dispensary permit which required payment of a $5,000.00 in non refundable initial application fees, or $1,400,000.)

Of the 177 applicants, only 12 grower/processor permits were issued so the demand was great. Now apparently one of the successful permit applicants is trying to sell the rights to his permit. Franklin Labs, LLC in Reading, Berks County is willing to sell 100% of Franklin Labs including the grower/processor permit for $20 million dollars. Franklin Labs also applied for a special clinical research (CR) license, and only applied for the grow permit as a backup plan. The CR license would allow the company to partner with a teaching hospital to conduct research on medical cannabis. Companies that are granted CR permit will receive permits to open a growing facility as well as six storefront dispensaries for selling oil-based cannabis products.

Under Pennsylvania’s Medical Marijuana Act, the issuance of a permit is a revocable privilege and any permit issued may not be transferred to any other person or location. Apparently, Franklin Labs is trying to circumvent the Act by selling of the whole company lock, stock, and barrel. The Department of Health has issued a statement saying that “no permit may be sold or transferred without approval from the Department of Health” but what about an entire company. Needless to say, this has caused some unsuccessful applicants to requests that Department of Health revoke Franklin Labs’ permit.

There is significant risk in purchasing Franklin Labs and its permit for $20 million dollars. The cost of applying for a permit during Phase II of the applications will still be $210,000.00. While there is no guarantee, the risk is still only the non-refundable $10,000.00 and whatever costs are incurred as part of the application process. While those costs could be significant, they are not likely to near $20 million dollars. Additionally, the Pennsylvania Department of Health could revoke the permit at any time or choose not to re-new it the next year. Despite the risk, Medical Marijuana is big business and it would not surprise me if an existing company in a state such as Colorado or California saw the sale of Franklin Labs as an opportunity to expand into Pennsylvania.

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