Tag Archives: Medical Marijuana

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 State Police Reiterate ATF Position on Medicinal Marijuana

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It should come to no surprise that the Pennsylvania State Police (“PSP”) have issued a position statement in relation to Pennsylvania’s new card carrying medicinal marijuana users. Once again, individuals who seek to use marijuana for medicinal purposes are forced to choose between the comfort they find in medicine or their constitutional rights.

Marijuana is still a Schedule I narcotic under federal law, which means that regardless of what state law says, at the federal level, it is still illegal to possess. Medicinal marijuana has grown in popularity since California legalized it in 1996 with a majority of states legalizing it in some form. However, the federal government has not taken any action to legalize it for medicinal purposes and DEA recently declined to reclassify it.

Medical marijuana card holders in Pennsylvania should take note of the following. It has been ATF’s position since 2011, that if an individual is merely in possession of a medical marijuana card, they are prohibited from purchasing a firearm. This is based on the theory that the transferor would have “reasonable cause to believe” that the person is an “unlawful user or addicted to a controlled substance.” In other words, it could be inferred that you fit that category by merely possessing a license, regardless of whether you obtained it for actual use or a political statement.

The statement also tells individuals that “[i]t is unlawful for you to attempt to purchase a firearm under Federal law and you will be denied during your Pennsylvania State Police background check, due to prohibitions under 18 U.S.C. § 922(g)(3),” which would seem to suggest that the information of medical marijuana users will be contained in the PSP’s central repository of information and/or sent to NICS.

IMPORTANT NOTE: I have not researched the medical marijuana law to see if that is the case or whether there are HIPAA concerns, etc., this is just a theory.

The PSP also states that an individual is unable to lawfully obtain a License to Carry Firearms (“LTCF”) and that “[t]he sheriff should not process your application if you truthfully indicate to the sheriff that you are the holder of a Medical Marijuana Card.” Moreover, the PSP continue to say “you will be denied during the Pennsylvania State Police background check, which occurs as part of the LTC application or renewal process,” again suggesting information pertaining to medical marijuana users are retained by the PSP and/or transmitted to NICS.

Perhaps most interesting about the PSP’s statement is this

It is unlawful for you to keep possession of any firearms which you owned or had in your possession prior to obtaining a Medical Marijuana Card, and you should consult an attorney about the best way to dispose of your firearms.  Again, this is due to prohibitions under 18 U.S.C. § 922(g)(3).

Essentially, PSP is contending that you are an unlawful user of a controlled substance if you obtain a medical marijuana card. However, possession of a card does not automatically equate to the use of the substance. So for individuals who seek to obtain a medical marijuana card for a political statement, be aware of the PSP’s position on the matter. That is one that will eventually require litigation.

 

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Are PA Medical Marijuana Patients Prohibited From Possessing and Purchasing Firearms and Ammunition?

Last week, Pennsylvania Governor Tom Wolf announced that the Medical Marijuana Program Patient Registry had reached 3,800 registered patients in its first week of registration. While individuals may be able to lawfully possess marijuana in Pennsylvania under Pennsylvania law if the person is registered on the Patient Registry and has been approved for use by a qualified doctor, Federal law still provides that the possession and/or use of marijuana is unlawful, as a Schedule 1 drug.

Although we have written extensively about the fact that marijuana is federally prohibited and that ATF revised the ATF 4473 form to reflect such, few individuals appear aware that they lose their right to keep and bear arms if they are a current user of marijuana, even if approved for use by a qualified doctor. (As many people are confused, a doctor cannot prescribe marijuana, due to Federal law, but can suggest to a patient that he/she utilize marijuana).

On the most recent version of the ATF 4473, it reflects under question 11e.:

e. Are you an unlawful user of, or addicted to, marijuana or any depressant, stimulant, narcotic drug, or any other controlled substance?

Warning: The use or possession of marijuana remains unlawful under Federal law regardless of whether it has been legalized or decriminalized for medicinal or recreational purposes in the state where you reside.

As a result, more than 3,800 residents of Pennsylvania have presumptively become prohibited under Federal law from possession and purchasing firearms and ammunition.

Moreover, individuals who live in households where a registered medical marijuana patient resides, need to consider the potential ramifications of their own rights to keep and bear arms.

If you are concerned about whether you have lost your right to keep and bear arms as a result of Pennsylvania’s medical marijuana program or your residing in a residence with a medical marijuana user,  contact Firearms Industry Consulting Group today to discuss YOUR rights and legal options.

 


Firearms Industry Consulting Group® (FICG®) is a registered trademark and division of Civil Rights Defense Firm, P.C., with rights and permissions granted to Prince Law Offices, P.C. to use in this article.

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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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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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Watch out for Higher Rents For Medical Marijuana Businesses

Any entrepreneur looking to participate in Pennsylvania’s Medical Marijuana program understands that one of the biggest expenses and concerns is the location of the operation of the marijuana business venture.  The Pennsylvania Department of Health is planning on issuing 25 permits for grower/processors and 50 permits for dispensaries (with up to three locations per each dispensary permit). Theoretically, that is a maximum of 175 properties throughout the state that can house a medical marijuana grower/processor or dispensary. The Medical Marijuana Act requires that all medical marijuana business be indoor and 1000 feet from the property line of the nearest school or daycare. There are additional requirements under the MMA that are primarily security related that must also be factored in when searching for a property to house the business.

Local zoning ordinances will also impact any search for a property to rent or buy.  Many townships and municipalities are enacting ordinances in anticipation of medical marijuana businesses setting up in their area.  Local ordinances may place additional requirements and restrictions on properties housing medical marijuana business so long as they are consistent with the MMA. Township zoning classifications and conditional uses, maximum square footage, entrance, signage, parking and distance between competing unrelated medical marijuana businesses in the same township are all within the township’s authority to regulate.

A new medical marijuana business in the state you can either buy or rent. Grower/processors may have larger amounts of capital available then dispensaries and elect to buy and build. The problem when you buy is that bank financing will likely be required and there is a good chance that banks and other lending institutions will charge higher rates due to the risks involved. Marijuana is still illegal federally and the new administration’s unclear position with regards to marijuana is creating a lot of fear and worry in the legal marijuana industry.  A legal business could still be subject to federal prosecution, shut down, and seizure causing default on loans and loss of collateral. Banks will look to protect themselves by charging higher rates if they accept the risks and provide financing to buy and build.

If a marijuana business elects to rent a property, the landlord is subject to risk of default on the lease if the business is shutdown.  Many potential landlords will have properties that are subject to mortgages.  A lose of rental income even for a short time could cause landlords to default on those mortgages.  Additionally, within the mortgage there is likely a default provision allowing banks to foreclose if any illegal business is conducted on the property.  Landlords could be subject to foreclosure by simply entering into a lease with a medical marijuana business.

So long as the Department of Justice’s focus was not on marijuana business legal under their respective state laws, banks have accepted these risks but with a new administration banks may start to have cold feet.

The point is all of these factors make it more of a seller’s market and give potential landlords an advantage when it comes to setting rental terms and rates. With all the risks involved, the statutory requirements, and the limited amount of locations, landlords will be able to charge rents higher than the going market rate.

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What The Nomination Of Senator Jeffrey Sessions as Attorney General Could Mean to the Legal Marijuana Industry.

On election day in November, I wrote a blog article outlining the states which were voting to legalize either recreational or medical marijuana. Eight states voted on election day to legalize marijuana in some form bringing the total number of states who legalized recreational marijuana to eight and medical marijuana to 29. 1 in 5 Americans now live in states where recreational pot is legal. National opinion favors the continued growth of the marijuana industry. Before the election, both candidates expressed support for medical marijuana at the very least. There currently is a policy by the federal government to not interfere with state intrastate commerce and the legal marijuana industry.

Following the election, President-elect Donald Trump nominated Senator Jeffrey Sessions of Alabama for attorney general. Senator Session is on the record as opposing the legalization of marijuana in any form. Sessions has called marijuana reform a “tragic mistake” and criticized FBI Director James Comey and Attorneys General Eric Holder and Loretta Lynch for not vigorously enforcing the federal prohibition. Earlier this year on the floor of the Senate, Senator Sessions said: “You can’t have the President of the United States of America talking about marijuana like it is no different than taking a drink… It is different…. It is already causing a disturbance in the states that have made it legal.” Session further said, ”good people don’t smoke marijuana.”

Such an antiquated way of thinking ignores the progress made by states with legal medical marijuana programs and shows no empathy for those individuals who currently benefit from medical marijuana. Sessions should spend a day with the cancer patient or the epileptic child who benefits from medical marijuana. His view also threatens to derail and drive the multi-billion dollar marijuana industry business back underground right at the time that it is starting to gain support in the legitimate investment world.

Other than the President–elect, there is no one with more power than Sessions to interrupt the growth the marijuana industry has experienced in the last two decades. The Justice Department under President Obama has been hands-off, issuing the Cole memos that basically say the federal government will not prosecute legal marijuana sellers or buyers in states where it is legal. As the new Attorney General, Senator Sessions could reverse the DOJ’s position and simply tear up the Cole Memos. With little more than the stroke of his pen, the new Attorney General could direct the enforcement of the federal law against marijuana and direct that federal law enforcement officers shut down legal marijuana operations and arrest growers, retailers and users.

Sessions would face at least one stumbling block in the the Rohrabacher-Farr amendment. The Rohrabacher-Farr amendment to annual appropriations bills prohibits the Department of Justice and the DEA from using federal money to target or prosecute state-compliant medical marijuana businesses. The problem with Rohrabacher-Farr amendment is that it must be renewed annually with each budget or it will expire.

No one is certain what President-elect Trump will do with regards to the legalization of marijuana. Trump’s exact views on marijuana remain mixed at best. While campaigning, he has expressed support for medical marijuana. However, he has also stated the recreational marijuana is bad and has spoken of undocumented problems with recreational adult use in states like Colorado. What clouds things even things even further is Trump’s expressed support for a state’s right to govern themselves. He is on the record as saying if the state voter for it that’s the law in the state. Moreover, he has routinely touted himself as pro business and it seems unlikely that he would interfere with the multi-billion dollar marijuana industry.

Some have argued that it would be political suicide for the Trump administration to go against a campaign promise on a hugely popular issue that is widely supported by voters even Republicans. But the marijuana industry is worried. With the nomination of Senator Sessions, it is facing uncertainty that could become a very real threat to its growth.

Updated December 12. 2017.  The U.S. Senate approved approved a stopgap  federal spending measure to fund the government through April 28, 2017 which included renewal of the Rohrabacher-Farr Amendment.

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