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Pennsylvania medical marijuana businesses may soon sell flower for vaping

Pennsylvania’s medical cannabis board has recommended allowing the sale of flower for vaping.

All that stands in the way of MMJ flower sales is a go-ahead from the state’s secretary of health, according to Triblive.com.

Adding flower to the list of available products should boost the bottom line of Pennsylvania’s cannabis companies.

Flower is one of the most affordable and commonly purchased forms of cannabis.

Here’s what you need to know:

  • The board voted 11-0 to allow “dry leaf or plant form for administration by vaporization.” One member abstained.
  • Pennsylvania’s MMJ businesses currently can sell only oil, pills, tinctures or concentrate for vaping as well as ointments.
  • As of April 6, more than 25,000 MMJ patients were signed up to purchase medical cannabis, and 914 doctors were registered to recommend medical cannabis.
  • The advisory board is also expected to vote on whether to add terminal illness and palliative care to the list of medical conditions that can be treated with MMJ.

Read the full article HERE

Cable TV Scion Chase Lenfest Sued Over Marijuana Deal Gone Bad

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A California-based cannabis industry expert has accused the prominent philanthropist and two New York men of conspiracy, fraud, and other offenses.

Last June, Pennsylvania awarded medical marijuana licenses to 12 companies in the state, allowing them to cultivate and process cannabis for sale at as-yet-to-open dispensaries. And now one of those companies — the one involving Main Line millionaire Chase Lenfest — is embroiled in a legal battle in federal court.

California-based cannabis industry expert Harris Silver, owner of consulting firm EntityX, has filed a federal lawsuit against Lenfest and New York investors Kevin Murphy and Melvin Yellin, the three men behind medical marijuana licensee Prime Wellness.

In the suit, Silver alleges that the men participated in a “fraudulent scheme to dupe” Silver into helping them get their license and then “cheat” him out of the money he says they owe him. Through a representative, Lenfest told Philly Mag he had no comment on the suit. Contacted at his New York apartment, Yellin termed Silver a “disgruntled consultant.” Neither Murphy nor an attorney for Prime Wellness could be reached for comment.

According to the suit, Murphy and Yellin decided to get into the medical marijuana business in Pennsylvania, and they wanted Lenfest on their team because of his prominent family name (the Lenfests are some of the region’s most well-known entrepreneurs and philanthropists), his fat wallet (he laid out $7.7 million for a 46th-floor condo at Two Liberty Place in 2009, and then there’s his vast manse in Gladwyne across the street from the exclusive Philadelphia Country Club), and all of the connections that come with those things.

Silver claims that Murphy and Yellin tried but failed to get medical marijuana licenses in Connecticut and Illinois in previous years, so they brought in Silver, whose company claims a 100-percent success rate in obtaining marijuana licenses, to help convince Lenfest to join them and to ensure that the application was approved once he did.

 

Read the full article HERE

Firm hired to track Pa.’s medical-marijuana sales suffers another website crash

by Sam Wood, Staff Writer  @samwoodiii  samwood@phillynews.com

MJ Freeway, the company awarded a $10.4 million contract to track all of Pennsylvania’s medical-marijuana commerce, suffered major disruptions over the weekend, causing some businesses in cannabis-legal states to suspend work for hours.

 The state Department of Health contracted with MJ Freeway in April for software that will track all cannabis produced in the state from seed to sale. The software will also be used as the state’s registry for patients, caregivers, and practitioners who will participate in the program, which is expected to begin in early 2018.

The outages required retailers and dispensers to record all sales by hand. In an email received late Monday, a spokeswoman for Denver-based MJ Freeway said service had been restored.

“On Saturday afternoon and Monday afternoon, we observed performance issues with our legacy Tracker software product,” wrote Jeanette Ward. “All client sites were taken offline for a period of time on Saturday evening and Monday afternoon to resolve the issues as quickly as possible. On both days, service was restored within a few hours, and client sites are currently live.”

The affected software is not the same product that MJ Freeway sold to Pennsylvania, Ward said Tuesday.

The disruption — it was unclear if it was the result of a crash or a deliberate attack — was the latest of several setbacks for MJ Freeway, which has provided tracking software for several states and a point-of-sale system for about 1,000 marijuana retailers nationwide.

  • Last week, the Washington State Liquor and Cannabis Board announced that MJ Freeway would fail to meet an Oct. 31 deadline to take over the state’s marijuana tracking software.
  • In September, Nevada abruptly canceled its agreement with MJ Freeway two years into a five-year contract.
  • The same month, an anonymous hacker circulated an offer to sell confidential information hacked from the Washington state and Nevada programs.
  • That followed a June incident in which the company’s source code was stolen and posted on Reddit (the code was later removed).
  •  In January, MJ Freeway was the target of a “malicious” hack that caused canna-businesses to lose data.

Pennsylvania’s contract with MJ Freeway was greeted with controversy when announced April 20. The company’s software ranked lower on technical merits than its Fort Lauderdale, Fla.-based rival, BioTrackTHC, which earned a perfect score. MJ Freeway, however, undercuts the competition on price, according to a state scoring document.

 

Read more HERE.

Medical marijuana grower gets green light in Pennsylvania

HARRISBURG, Pa. (AP) — A licensed grower and processor of medical marijuana in western Pennsylvania is the first with state approval to begin operating. Pennsylvania has fully approved its first medical marijuana grower.

Democratic Gov. Tom Wolf’s administration said Tuesday that the Department of Health has approved Cresco Yeltrah to begin growing and processing medical marijuana at its Jefferson County location. That makes it the first facility to be deemed fully operational in Pennsylvania’s medical marijuana program.

Earlier this week, the state gave final approval to Cresco Yeltrah, which will operate out of a 40,000-plus-square-foot cultivation facility in Brookeville, Jefferson County. 

The Illinois-based company was the first to pass several inspections from the state Department of Health and can now begin planting marijuana seeds.

Cresco says it will use the Brookeville facility to grow more than 30 different genetic strains of pharmaceutical-grade marijuana, available in the form of high CBD strains, vapor oils, transdermal patches, and pills.

The department expects 11 other licensed grower-processors to be operational in the coming weeks. It issued the permits in June, selecting the 12 winners from among 177 applicants. The department has also issued permits to 27 entities to operate retail dispensaries.

In a statement, Cresco’s co-founder Charlie Bachtell said “providing relief to patients across the state as quickly as possible is our focus.”

Read more HERE and HERE.

Israel: land of milk, honey and medical cannabis

Breath of Life’s huge new facility, the largest medical cannabis facility in the world, can store enough medical marijuana to supply the entire United States.

 

In August, a joint feasibility committee of the Health and Finance ministries submitted a recommendation that Israel open its booming medical marijuana business to international exports. The market could be worth as much as $4 billion a year in revenue.

In the expectation that the proposal will be approved by legislators, an Israel company – Breath of Life Pharma (BOL) – is positioning itself to become the world’s largest medical cannabis facility.

BOL’s new production, research, and development campus in central Israel has a 35,000-square-foot plant, an 8,000-square-foot storage room, 30,000 square feet of grow rooms and labs, and a million square feet of cultivation fields.

BOL CEO Dr. Tamir Gedo says his firm can store enough medical marijuana to supply the entire United States. Gedo estimates that BOL will produce 80 tons of medical cannabis per year.

“Just don’t call it ‘marijuana,’” Gedo told a group of visiting journalists under high security (marijuana is, after all, a controlled substance in much of the world, including Israel).

The word “marijuana” was used by US drug enforcement agents in the 1930s to make it sound foreign and dangerous. Gedo, like most in his industry, prefers to use the plant’s real name, cannabis. He refers to BOL’s business as the growing, packaging and distribution of “medical-grade cannabis” (MGC for short).

BOL has no interest in pushing the legalization of recreational cannabis, Gedo says. Rather, BOL works toward bringing pharmaceutical-grade quality and delivery systems to purified extracts of the plant.

Because the chemical composition of cannabis flowers from different branches is not at all consistent, companies in the medical cannabis space don’t use the whole plant but instead isolate specific molecules and turn those into controlled, consistent drugs.

That can be quite a challenge: Cannabis has 142 different cannabinoids – active components – and each targets different illnesses.

The two best-known cannabinoids are THC and CBD. The former is the psychoactive component responsible for marijuana’s “high.” It also helps with pain and nausea, which has made it a much sought-after medication for patients undergoing chemotherapy.

CBD, on the other hand, works on the autoimmune system and acts as an anti-inflammatory. It is being tested on inflammatory bowel diseases (including Crohn’s and ulcerative colitis) and has shown to be effective with conditions as diverse as autism, epilepsy, diabetes and heart disease. Moreover, you can’t get high from CBD.

In order to get FDA approval, a company like BOL, which was founded in 2007, must conduct the same kind of double-blind clinical trials any drug would go through. Some 120 trials are currently underway in Israel – more than in any other country.

Gedo says that if even 10 percent of trials underway at his facility result in a patentable drug, BOL could be the Pfizer of MGC. BOL’s autism trial, under the supervision of Dr. Adi Aran, director of the neuropediatric unit of Shaare Zedek Medical Center in Jerusalem, will go to the FDA in 2018. If it’s approved, a commercial drug could be available as early as 2021.

 

Read the full article HERE

 

Jilted Pa. Medical Marijuana Bidder Drops License Challenge

By Matt Fair

Law360, Philadelphia (October 5, 2017, 6:04 PM EDT) — A company claiming it lost out on a lucrative medical marijuana growing and processing permit after a rival failed to tell Pennsylvania regulators about a criminal probe it was facing agreed Wednesday to drop a lawsuit challenging the state’s decision in the bidding process.
BrightStar Biomedics LLC, which has said it would have won the permit but for a Vireo Health LLC subsidiary’s disclosure failures, withdrew its Commonwealth Court lawsuit in lieu of what a spokesman said would be efforts to resolve its issues through administrative channels under the state’s new Medical Marijuana Act.

“After discussions with counsel at the Department of Health, BrightStar decided to voluntarily withdraw its suit without prejudice and continue with the administrative appeal process,” said BrightStar spokesman Daniel Fee. “BrightStar continues to believe strongly in the merits of its position and looks forward to getting to the truth of what happened here.”

BrightStar had asked the Commonwealth Court last month to bar Vireo unit Pennsylvania Medical Solutions LLC from receiving the permit in light of the fact that officials with a company affiliate in Minnesota had been charged for diverting cannabis oil to another state, and that permits awarded to another affiliate in Maryland had been revoked.

PMS was one of two companies in Pennsylvania’s northeast region that the state’s Department of Health announced in June had been selected to receive coveted grower-processor permits under the state’s recently legalized medical marijuana program.

But BrightStar argued in its lawsuit that the score PMS received on its application to the department’s Office of Medical Marijuana was artificially inflated as a result of its failure to disclose the allegations of criminality its Minnesota affiliate faced.

While BrightStar has administratively appealed the OMM’s licensing decision, the company argued in its suit on Friday that the process was “illusory,” as the office had already made it clear in correspondence that it would not change its decision.

With its decision to withdraw its lawsuit on Wednesday, BrightStar signaled its commitment to go through with the administrative appeal before moving forward with any potential challenge in Commonwealth Court.

Vireo has cast the lawsuit as nothing more than sour grapes from a losing bidder.

“It is unfortunate, but not entirely unexpected, when a company turns to the courts after failing to win a medical cannabis license in a merit-based process,” the company said in a statement last month. “We participated in the process fully and transparently, just as we have in other states such as Minnesota and New York, where our licenses were recently renewed. We will not let matters like these distract us from our mission of providing medical cannabis products to patients suffering from life-threatening and debilitating conditions.”

In the meantime, the department is facing another Commonwealth Court challenge from Keystone ReLeaf LLC asking that licenses be revoked due to what the company claims was a “fundamentally flawed, secretive, inequitable, unconstitutional and illusory permitting process.”

That lawsuit remains pending and is scheduled for a hearing at the end of the month, according to court records.

BrightStar is represented by Mark Sheppard, Michael Witsch, Arianna Goodman and Ernest Holtzheimer of Montgomery McCracken Walker & Rhoads LLP.

Read the full article HERE

Want to grow marijuana? Company selling permit for $20M

by Sam Wood, Staff Writer

 

For sale: One never-used permit to grow medical marijuana in the state of Pennsylvania. Includes a turnkey operation with a 47,000-square-foot former beverage warehouse in Reading outfitted with state-of-the-art cultivation pods and hash-oil processing equipment. Price: $20 million.

Rumors have been circulating for months. Shortly after the Pennsylvania Department of Health awarded a dozen permits to grow cannabis in June, email pitches went out touting that some of those potentially lucrative licenses were already for sale. The state immediately tried to put the kibosh on them.

 “No permit may be sold or transferred without the approval of the Department of Health,” spokeswoman April Hutcheson first said in July. She has repeated those words to reporters every time another rumor of a sale surfaced.

Late Monday, a confidential prospectus was delivered to the Inquirer. The document includes an offer to sell 100 percent of Franklin Labs LLC, the company that won one of the 12 permits, for $20 million.

Franklin Labs is helmed by John Hanger, a former Democratic candidate for governor who once served as an adviser to Gov. Wolf. Hanger was not available for comment.

Franklin Lab’s CEO, John Pohlhaus, acknowledged that the permit was being shopped. His company, he said, is in the running for a special clinical research (CR) license that would allow it to become a much mightier venture. As a CR, the company could investigate marijuana’s benefits under the auspices of a teaching hospital. CR status would include permits for a growing facility and six storefront dispensaries where patients could buy oil-based cannabis products.

“Our business has always wanted to do medical research. We’ve been clear about that from the beginning,” Pohlhaus said. “We applied for the commercial grow license only because the CR rules weren’t out. It was a backup. There’s nothing nefarious about it.”

Selling a grow permit

The Franklin Labs prospectus does come with caveats.

“The purchase of the company involves a high degree of risk, including the federal government’s current characterization of the growing and sale of medical marijuana as a felony. Other risk factors include risks applicable to all start-up enterprises,” the prospectus reads.

And yes, the offer makes it clear that any sale would have to be approved by the Department of Health.

“The law clearly states that a permit is not transferable, meaning that it can’t be sold,” department spokeswoman Hutcheson said Tuesday when told about the prospectus.

According to state law, a company cannot operate more than one grow facility. But Pohlhaus, who was surprised that the prospectus had leaked out, is hedging his bets.

“We would like to keep both,” Pohlhaus said. Because the rules for CRs haven’t been finalized, he said, there’s still a chance that the state might allow it. There’s also a chance that, as a CR, Franklin Labs could grow at the already outfitted Reading warehouse.

Pohlhaus said the company is spending $5 million to transform the warehouse into a state-of-the-art indoor greenhouse, no matter what occurs with the permit. Whoever owns it is bound by law to start producing medical marijuana by the end of December.

Potential buyers were required to sign nondisclosure agreements before being allowed to see the prospectus, according to one person who was approached with the offer but asked to remain anonymous, fearing reprisals.

Franklin Labs was one of two companies approved to grow marijuana in the state’s southeastern zone. Both are slated for the Berks County area. Prime Wellness LLC won the second permit for a site in South Heidelberg. Chase Lenfest, son of Philadelphia philanthropist H.F. “Gerry” Lenfest, is the primary backer of Prime Wellness, which also is pursuing a CR permit. Chase Lenfest declined to comment.

Some of the unsuccessful applicants, who had spent hundreds of thousands of dollars competing for a chance to grow, were shocked at the brazenness of Franklin Labs’ offer.

“I’m very surprised,” said Lindy Snider, whose company Snider Health applied for a grow permit but did not win. Snider, daughter of the Flyers’ late owner Ed Snider, said other companies with permits had approached her. She said she had declined their offers. “I didn’t think this was a possibility without state approval. It’s unbelievable.”

The lucrative clinical research license

The Pennsylvania medical marijuana program is an unprecedented tangle of laws and regulations. In drafting the statute, the legislature created a special category of “vertically integrated” CR companies that will pair with medical schools to conduct research. No other state in the nation provides for similar alliances with academic institutions, which are called Accredited Clinical Registrant Centers (ACRCs) in the law.

Eight CR permits are available. The application process is not competitive. Already, six growers have paired with six medical schools. The University of Pennsylvania and Drexel, Thomas Jefferson, and Temple Universities in Philadelphia and the University of Pittsburgh Medical Center reportedly signed agreements with undisclosed marijuana companies. Franklin Labs has partnered with Lake Erie College of Osteopathic Medicine, which bills itself as the largest medical school in the United States.

Chester Mayor Thaddeus Kirkland wants a grow facility for his financially distressed city. He said he appealed to the state in August to disqualify both Franklin Labs and Prime Wellness, which is reportedly aligned with Drexel, because they appeared to be shoo-ins for CR permits.

In a letter cosigned by U.S. Rep. Bob Brady, whose district includes Chester, Kirkland said the grower applicants with the third- and fourth-highest scores should be awarded the permits.

 

Read the full article HERE

Pennsylvania medical marijuana program on track, but legal issues loom

By Bart Schaneman

Pennsylvania’s developing medical marijuana market appears to be progressing on schedule.

Industry watchers expect seeds to be in the ground ahead of the Dec. 20 deadline, six months after 12 grower/processor licenses and 27 dispensary permits were issued.

But a pair of legal issues could gum up the works:

 

 

While either issue could cause the department to be stretched thin and delay the program, neither has industry insiders particularly worried.

“This program should be available to the patients by early 2018,” said Christine Brann, a cannabis attorney in Hershey.

Michael Bronstein, a Philadelphia-based lobbyist, said the mechanisms for the appeals process undertaken by Keystone ReLeaf and the Reading Eagle’s request for application review were built in so as not to hinder the development or rollout of the program.

Judith Cassel, a Harrisburg-based attorney, said the health department has done a good job communicating with grower/processor and dispensary permit holders to ensure the businesses can meet their deadlines.

“They’re not just sitting in their offices waiting for the grower/processors to come to fruition by themselves,” she said.

Brann is encouraged that applications were submitted and permit winners announced only about 13 months after the act was passed in April 2016.

Bronstein agreed.

“Things have gone pretty well in Pennsylvania,” he said.

Ahead of schedule

Cassel’s optimistic the program could develop quicker than expected.

“We’re not only on schedule,” she said, “we may have grower/processors who are ready ahead of their due date.”

She added that some growers could have seeds in the ground in November, which would be about a month ahead of the Dec. 20 due date.

“That’s significant,” Cassel said. “Everyone thought that was a tight timeline to begin with, but obviously first-to-market is incentivized.”

One point of contention has been the six-month requirement for grower/processor and dispensary license holders to have their facilities constructed.

“This shouldn’t be a surprise,” Cassel said. “Every grower/processor applicant – before they ever applied – they knew they had six months from the date that they were awarded a permit.”

Her understanding is that the health department will grant extensions if a licensee’s facility isn’t ready at the six-month mark but has been making progress.

The next step is Phase 2, where the second half of the licenses are awarded.

Relief for ReLeaf?

Cassel, who represents business applicants for the medical marijuana program, said Keystone ReLeaf’s lawsuit could lead the health department to rescind all the permits it has issued. And that, she added, “would be a mad mess.”

But the company is fighting a losing battle, Cassel said, because it filed its application two days late.

“That’s a nonstarter,” she said. “It’s kind of like a spoiled child stomping their feet and saying, ‘If you don’t give me a permit, then no one should have a permit.’”

Brann expects the Commonwealth Court to rule on Keystone ReLeaf’s suit on the hearing for injunctive relief by the end of October.

State Sen. Daylin Leach – the main advocate for the 2016 law legalizing medical cannabis – said “people will be forced to needlessly endure excruciating pain, agony and, in some cases, death,” if Keystone ReLeaf’s lawsuit succeeds in delaying the program, according to the Philadelphia Inquirer.

Redactions reviewed

The main concern over the open records request about the redactions in the MMJ applications is the effect on the health department’s resources.

Asked how long it would take to review the 450-plus grower/processor and dispensary applications to ensure all the information required to be made public under the law is released, health department officials estimated the process could go nearly two years.

That estimate was based on a review of 300,000 pages of redacted and nonredacted applications by two employees looking at 600 pages per day.

To help with the process, Brann said the health department asked the applicants to explain why they redacted certain sections of the applications. The applicants have been asked to answer within 30 days.

Cassel said her firm helped applicants with redactions and cited legal precedent as to what was redacted. Her firm looked at the redactions as essential to preserving her clients’ business plans.

“What entity is forced to give their business plan to their competitors? No one,” she said. “It just seems outrageous … If you make it public record, all your competitors can have it.”

 

Read the full article HERE