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BLOG: State speeding up grower process

David Weissman
717-505-5431/@DispatchDavid

State health officials are working to quickly bring medical marijuana into the state now that legislation has passed, but moving too quickly may lead to some adverse effects.

State Sen. Daylin Leach speaks to the audience at the "Innovation in the Cannabis Industry" conference on Saturday, April 30 in Philadelphia. (Photo by David Weissman)

Officials met last week to discuss, among other things, creating temporary regulations for cannabis growers and processors.

Justin Moriconi, a Philadelphia-based attorney who specializes in regulated cannabis, said setting up temporary regulations makes sense because it allows the players to identify problems and make corrections, but he worried officials may be pushing for a timeline that's too aggressive.

Pa. officials working to get temporary regs in place for medical marijuana

Heavily involved with parties interested in the coming industry throughout the state, Moriconi said he's heard grower/processor provisional applications may be distributed and due as early as August.

Such an early deadline would be "impossible" for many potential applicants, Moriconi explained, because certain regulations may alter land deals, spending plans, etc.

"I guarantee some applicant will get licensed and ultimately have to change their proposed location," he said.

Moriconi said he also took issue with the apparent lack of a review/comment period following the release of temporary regulations.

The state Department of Health is creating surveys on its website to promote feedback on its progress, with this month's survey geared toward growers and processors, but they did not mention what its review process might include following release of regulations.

Moriconi said a September or October application deadline would be reasonable for potential applicants as long as there is a review/comment period.

The sped-up process could add to a plethora of issues that are discouraging investment in garnering one of the 25 available grower/processor licenses.

Submitting an application is already dependent on proving some significant financial backing — must have at least $2 million of capital — but the program also fails to include the "Right to Farm Law" in its current description, which Moriconi said poses long-term risks.

And with a projected 18-month to two-year time span projected before dispensaries are open and selling medical marijuana in Pennsylvania, an early start for growers and processors will leave them spending money without generating any revenue for a significant amount of time.

Moriconi also said the state stands to lose money from potential application fees.

State Department of Health officials said they've had about 100 queries from people interested in attaining grower/processor licenses. With a $10,000 nonrefundable deposit required to submit an application, the state would gain $1 million if each follows through on their interest.

Though the point of this program obviously isn't to put money in the government's pockets, it certainly would be a benefit given that it's clearly being provided by groups with plenty of capital at their disposal.

Rushing the grower applications would also leave primarily well-established, out-of-state entities that have already been through an application process in the driver's seats for those limited licenses.

"I just don't see the benefit of accelerating it to the end of the summer," Moriconi said.

— Reach David Weissman at dweissman@yorkdispatch.com or on Twitter at @DispatchDavid. Like the blog on Facebook at The CannaBiz Kid.