Medical marijuana businesses will face stiff competition in the New Year: State regulators have reduced the amount of licenses available initially.
State law allows the Pennsylvania Department of Health to grant up to 25 licenses for growers and processors and 50 licenses for dispensaries, but the amounts will be cut in half for what the department described Wednesday as phase one of Pennsylvania’s medical marijuana program.
At the same time, the department has opened up earlier than expected the process for applying for dispensary licenses.
Growers and processors will compete for 12 licenses when the application process opens in January. Dispensaries will be competing for 27 licenses, the department announced Wednesday.
The department decided to move ahead in phases in order to collect data on the new industry before releasing all licenses. Phase one will open Jan. 17, 2017, with applications accepted between Feb. 20 and March 20, the department said.
There is no set date for opening the second licensing phase, said John Collins, director of the state’s Office of Medical Marijuana.
The department is expecting about 900 applications to flood in, and it anticipates spending at least 90 days to go through them, Collins said, noting that the department is on track to have an operating medical marijuana program by mid-2018.
State will approve two grower and processor licenses per region
Licenses are divided up regionally, with the midstate slated to get at least four dispensaries and maybe two grower/processor facilities.
Overall, licenses will be scattered across six regions, or districts.
Lancaster County is grouped with the Southeast District, which includes eight counties in the greater Philadelphia area. That means grower and processor applicants in Lancaster will be competing with rivals in areas such as Berks, Bucks, Chester, Delaware, Montgomery and Philadelphia counties.
Cumberland, Dauphin, Lebanon and York counties are in the South Central District, which includes a total of 13 counties.
Each district will have up to two grower and processor licenses, creating tough competition for prospective cultivators.
“My takeaway from the conference was it is going to be very competitive since they are limiting two grow applications per region,” said Andrew Blasco, executive director of the Pennsylvania Medical Cannabis Industry Group, a Harrisburg-based trade association. “Those that do win permits are going to have an incredible advantage to any subsequent permits awarded.”
Midstate allowed four dispensaries
Dispensary licenses will be granted based on patient demand, industry interest and medical data in each region, Collins said.
The department received feedback from about 5,000 patients, which showed where patients with qualifying conditions lived and that the two most-common qualifying conditions are chronic pain and post-traumatic stress disorder.
The department used the patient feedback, along with feedback from industry stakeholders, to determine where dispensaries should be located, Collins explained.
The Southeast region will have a total of 10 dispensary licenses, with Lancaster allowed one of those licenses.
The South Central region will have a total of four dispensary licenses, so Dauphin, Cumberland, and York will each be allowed one license.
Dispensary license holders can open a total of three locations. Each location must be approved by the state, according to department spokeswoman April Hutcheson.
Each licensed dispensary operator must have its first location in its designated county. The second and third dispensary locations must be in different counties than the first but must still be in the same region, Collins said.
A dispensary license holder in Dauphin County, for example, could open a second location in Lebanon County to serve patients there. Both counties are in the South Central District.
Dispensaries will be able to purchase products from any grower and processor in the state, and will not be restricted to buying only from those within their district, Collins said.
Dispensary applicants weren’t expecting their licensing process to open until after growers and processors were approved, so Wednesday’s announcement of a January opening date came as a surprise, according to Justin Moriconi, attorney and partner at a Philadelphia-based firm, Moriconi Flowers Ltd.
Since the newly announced deadline is much sooner than dispensary applicants anticipated, many are scrambling to secure locations and receive letters of approval from township officials, Moriconi said.
“It’s a much more accelerated process,” Moriconi said.