Preparing for Phase 2: Securing Dispensary and Grower/Processor Permits –

Peter Murphy, left, and Daniel Clearfield, right, of Eckert Seamans.

On March 22, the Pennsylvania Department of Health (the department) announced it will begin accepting applications for medical marijuana dispensary and grower/processor permits as early as April. During this second round, the department will issue 13 additional permits to grow and process medical marijuana, and 23 dispensary permits. Completed applications must be postmarked no later than May 17.

Applying for a state license to dispense or cultivate marijuana is an expensive and labor-intensive process. Typically, experienced cannabis operators have a significant advantage over those seeking their first license. Regulators are more likely to approve applicants with well-defined standard operating procedures that govern all aspects of cultivation, processing and dispensing. Moreover, those currently operating legal cannabis businesses have likely invested heavily in their security and anti-diversion systems, which are critical in protecting plants, products and the proceeds from marijuana sales. Finally, experienced applicants, and their lawyers, will be familiar with the dynamic environment in which laws and regulations are drafted and implemented through a fog of competing interests and agency priorities.

Today’s largest legal cannabis operators have quickly evolved into a national network of nimble and hungry entrepreneurs. When new cannabis licenses become available, they invest time and money to evaluate the new market and weigh the costs of competing for a limited number of cultivation and dispensary licenses. Questions abound. Will marijuana flower be permitted According to BDS Analytics, marijuana flower currently makes up over 50 percent of all legal marijuana sales in Colorado, Washington and Oregon, according to ArcView Market Research, “The State of Legal Marijuana Markets,” 5th Ed. (2017) pg. 67. If sales are restricted to cannabis concentrates, does the law include a mechanism to expand the types of cannabis products that will be allowed for sale? Is

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