Act 16 legalized medicinal cannabis, but many dispensaries are still tangled in a web of red tape.
BY MELISSA JACOBS
It ain’t easy being green. Marijuana, unlike its botanical brethren tobacco and sugarcane, hasn’t been proven to cause disease or addiction. And yet, it took years of wrangling for the Pennsylvania legislature to legalize it for medical purposes. When Act 16 was passed in 2016, the bill’s chief architect and cheerleader, state Sen. Daylin Leach, a Democrat serving parts of Delaware and Montgomery counties, called it “the most significant piece of social policy enacted in Pennsylvania in generations.”
While that remains to be seen, what’s clear is that Act 16 has several Catch-22 legalities, and it stands on somewhat shaky medical ground. The law approved medical marijuana for a petite list of 17 diseases (see sidebar), including cancer, Crohn’s disease, glaucoma and HIV/AIDS. Legal delivery methods are liquids, gels, creams, pills, and tinctures. Vaping is allowed, but smoking is not—and neither are edibles. Act 16 also created an intricate grower, dispensary and “prescription” system to be implemented by the Pennsylvania Department of Health.
How does the system work, and how can you get some? Well, the first thing to know about medical marijuana is that you shouldn’t call it “medical marijuana.” Weed, pot, chronic, blunt, spliff—industry insiders don’t use any of those terms, either. Chris Kohan calls it “MMJ.” Skip Shuda uses the phrase “medicinal cannabis.” Both were awarded licenses to open multiple dispensaries in Pennsylvania.
The Department of Health didn’t exactly roll out the green carpet for MMJ. Obtaining licenses required an American Ninja-style application process. Still, the passage of Act 16 sparked a “green rush” of investors wanting to get into the canna-business. Whether medicinal or recreational, legalized marijuana has two things entrepreneurs look for: demand and growth potential.
Sources familiar with the process say that applying for a grow license required a bankroll of more than $2 million. At approximately $200,000, dispensary applications are more affordable, but they’re still pricey gambles. A Media-based entrepreneur with decades of start-up experience, Shuda knows that every venture carries risk. “We had a one-in-10 chance of getting a dispensary license,” he says. “We would’ve been in for $150,000 and had a 90-percent chance of losing that.”
In June 2017, the Department of Health awarded the highly coveted licenses. Kohan’s Healing Center will open three dispensaries in the southwest corner of the state. That’s Region 5, one of six the Department of Health created to sprinkle dispensaries throughout Pennsylvania.
Region 1 includes Philadelphia, Bucks, Montgomery, Delaware, Chester, Lancaster, Berks and Schuylkill counties. Shuda is COO of Chamounix Ventures. Under the name Keystone Shops, he’ll open dispensaries in Devon, King of Prussia and Upper Darby.
Only 27 dispensary licenses were granted, and the selection process was almost immediately called into question for its lack of transparency. People who wrote checks with a lot of zeroes—including several prominent Main Liners—cried foul. Shuda believes that the solidity of his group’s applications won those licenses. “We put together comprehensive plans,” he says. “Some of the selection process wasn’t completely open, but we were all told what the grading process would be. The state seems to have adhered to that.”
Dispensaries and “grows” had six months to be open for business. That was a tight deadline for dispensaries and nearly impossible for grows. They had to be built, pass a host of inspections, then grow and process plants. Given all of that, most grows won’t have product until March, possibly April. “We can’t open dispensaries until we have product to sell,” Kohan says. “We can’t import it from any other state. It has to come from Pennsylvania.”
And there’s no fudging that, Kohan says. Every legal plant in the state will be tracked through MJ Freeway, a seed-to-sale software system mandated by the Department of Health. Patients and their purchases will also be monitored via MJ Freeway. “The state created this system, and every dispensary has to adhere to it,” he says. “Given the level of vigilance the state is promising, it would be unwise to mess around with that.”
Kohan and Shuda adhered to the state’s strict parameters for the physical composition of their dispensaries, which include extensive video surveillance, secure storage and a complicated delivery system. “Security requirements for dispensaries exceed those for a pharmacy or liquor store,” says Shuda. “Arguably, those are much more dangerous substances. But in order to pass the law in a relatively conservative state like Pennsylvania, legislators had to include those things.”
Kohan and Shuda say their dispensaries are on target to open whenever MMJ becomes available.
But there’s another hurdle. Dispensary owners need something money can’t buy: the cooperation of physicians. To enter a dispensary, you need a state-issued MMJ card. To get the cards, you need letters from doctors. Those letters are recommendations, not prescriptions. Not every physician can issue recommendations. To qualify, they have to register with the state and take four-hour courses.
The local healthcare community is proceeding with caution. As of September, Crozer-Keystone Health System wasn’t participating in the program, and inquiries to Main Line Health went unanswered. Had the state legislature legalized recreational cannabis, physicians wouldn’t have to be involved in MMJ. But as it stands, the Department of Health is asking them to endorse the use of cannabis for medicinal purposes. More than a dozen, all of whom requested anonymity, expressed reservations about recommending MMJ. “Do whatever you want recreationally,” one physician says, “but don’t ask me to sign off on cannabis as medical treatment.”
Dispensaries will be staffed by medical professionals, including doctors, pharmacists, physician assistants and nurse practitioners. Keystone Shops’ dispensaries are creating private areas in which staff members brief patients on how to get physicians’ recommendations and state-issued cards. “We’re also looking at creating centers of excellence at our dispensaries,” Shuda says. “We want to build relationships with patient advocacy groups and become destination sites for cannabis treatment of specific conditions.”
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