Pennsylvania’s six medical marijuana testing laboratories have been approved by the state Department of Health to begin testing for tetrahydrocannabinol (THC) levels in Pennsylvania’s hemp crops.
The Department of Health and the state Department of Agriculture announced on Thursday that the labs, which could previously only test medical marijuana products, will be expanding their services to hemp crops as more farmers cultivate the plant.
The medical marijuana laboratories will be joining the testing at an important time as growers near the harvest season, the departments wrote in a press release.
“We’re grateful to the Department of Health for helping to make these labs available to Pennsylvania’s new and growing hemp industry as they work to meet testing requirements during a very tight, critical harvest window,” said Agriculture Secretary Russell Redding.
Last year marked the first time that farmers across the country could legally produce hemp plants for commercial products after the 2018 Farm Bill reclassified the crop as legal for industrial use.
Hemp is used in commercial and industrial products to manufacture cement, rope, textiles, insulation and more. However, cultivation of the plant is closely monitored because any hemp plants with a THC level of .3% or higher is considered marijuana and the entire crop is destroyed.
To ensure that the hemp’s THC levels are below that threshold, farmers could previously send samples of their crops to one of 13 in-state and out-of-state labs that test for potency.
Pennsylvania medical marijuana testing laboratories may only see a minimal increase in the samples they receive since established growers already have relationships with other laboratories, said Russell Greenland, CEO of Keystone State Testing in Lower Paxton Township.
Keystone State is one of the Department of Health’s six approved medical marijuana testing laboratories.
“Since samples coming in are expected to be minimal if any at all, this change of heart by the Department of Health won’t have much impact at all if any,” Greenland said. “This decision is about two years too late.”
Greenland added that the testing won’t require any additional work that the laboratories weren’t already doing with the testing of medical marijuana, but warned growers of the laboratories they send their product to since the allowable limits for THC are so low.
“Since allowable limits of THC are below .3%, laboratories must be able to do the work correctly as the margin for error is really small,” he said.
For this year’s 2020 growing season, Pennsylvania has 510 farms growing approximately 3,000 acres of hemp. Last year, 324 farmers grew just over 4,000 acres of hemp across the state.
Following its most recent round of applications for the Pennsylvania Medical Marijuana Research Program, the state Department of Health has approved four more organizations to begin clinical trials alongside academic partners.
Last September, the department began accepting applications for clinical registrants to grow, process and dispense medical marijuana for pre-approved Pennsylvania-based medical schools.
Through the program, clinical registrants will also perform double-blind, placebo-controlled clinical testing that researchers can use to understand the effects of marijuana on the state’s 21 approved medical conditions.
As a part of the 2016 medical marijuana law, eight Pennsylvania-based medical schools were chosen to lead the state in medical marijuana research.
The schools, known as academic clinical research centers, are required to partner with entities that will grow and process marijuana and dispense the drug to patients with medical marijuana licenses. Proceeds of the medical marijuana sales can be used to help fund the school’s research.
“Pennsylvania remains on the forefront for clinical research on medical marijuana,” Secretary of Health Dr. Rachel Levine said. “This research is essential to providing physicians with more evidence-based research to make clinical decisions for their patients. It is the cornerstone of our program and the key to our clinically based, patient-focused program for those suffering with cancer, PTSD and other serious medical conditions.”
The state’s four new clinical registrants and the academic clinical research centers they will partner with include:
Lackawanna County-based Laurel Harvest Labs LLC, contracted with Lewis Katz School of Medicine at Temple University, Philadelphia.
Lawrence County-based CannTech PA LLC, contracted with Lake Erie College of Osteopathic Medicine (LECOM), Erie.
Enola, Cumberland County-based Organic Remedies Inc., contracted with Philadelphia College of Osteopathic Medicine, Philadelphia.
Philadelphia-based Curaleaf PA LLC, contracted with The Perelman School of Medicine at the University of Pennsylvania, Philadelphia.
Laurel Harvest Labs LLC is planned to open a plant to grow and process medical marijuana in Mount Joy, Lancaster County, and Organic Remedies will open a grower/processor plant in Carlisle, Cumberland County.
The four clinical registrants will join the following previously approved companies: Harrisburg-based PA Options for Wellness, contracted with Penn State College of Medicine; Agronomed Biologics LLC, contracted with Drexel University School of Medicine in Philadelphia; and MLH Explorations LLC, contracted with Sidney Kimmel Medical College at Thomas Jefferson University in Philadelphia.
PA Options for Wellness broke ground on its grower/processor center in October, 2019, and expect to open the $12 million facility by this summer.
The University of Pittsburgh School of Medicine has yet to link with an approved clinical registrant. The Department of Health will need to announce a fourth round of applications to approve the final partnership.
Levine told the Medical Marijuana Advisement Board recently that the department plans to host a summit in late March for the eight academic clinical research centers to discuss their plans for research along with their clinical registrants.
Harvest’s medical marijuana dispensary in Harrisburg opened this week. PHOTO/IOANNIS PASHAKIS
Harvest Health & Recreation Inc. opened its Harrisburg dispensary on Tuesday. It’s the Phoenix-based cannabis company’s fifth in Pennsylvania.
The new dispensary was first announced in July, with the company stating it expected the business’ doors to open by the end of the year.
The Harvest Dispensary is the first medical marijuana dispensary in Harrisburg and is located at the Camp Curtin Fire Station on 2504 N. 6th St.
Harvest operates about 130 retail locations with more than 1,700 employees across 18 states. In Pennsylvania, the company operates dispensaries in Cambria and Lackawanna counties and two in Reading.
“The medical marijuana market in Pennsylvania has incredible potential, and we’re pleased to be growing our presence in the Commonwealth,” said Steve White, CEO of Harvest. “We’re looking forward to providing qualifying patients and caregivers with access to high-quality, innovative products and experiences, while working to educate and partner with the communities we serve.”
The former fire station that houses the new dispensary needed a number of repairs before Harvest could move in, including preserving the station’s bell tower.
Harvest has five affiliates in Pennsylvania that each have their own medical marijuana dispensary permits through the state Department of Health. While the company currently has only five operating dispensaries in Pennsylvania, its permits allow it to open ten more in the coming years.
Four prominent women in Pennsylvania’s medical marijuana industry spoke during an online panel on Wednesday. Clockwise from top left: Tammy Royer, Jackie Parker, Jamie Ware and Chris Visco. PHOTOS/SUBMITTED
Prominent women in Pennsylvania’s medical marijuana industry shared their experiences Wednesday at “Women in Cannabis,” a discussion hosted by Terrapin Pennsylvania, a grower/processor in Clinton County owned by Boulder, Colorado-based Terrapin Care Station.
The panelists talked about what led them to the industry, how they focused on diversity within their organizations and where they see the industry going.
“We are in our communities every day, hiring women and people of color and working to end the stigma of medical cannabis,” said Chris Visco, President of Terra Vida Holistic Centers, three dispensaries in Bucks, Montgomery and Chester counties.
Visco was joined on the panel by Jamie Ware, compliance officer for the Pennsylvania arm of Holistic Industries, a Maryland-based grower, processor and dispensary; Tammy Royer, president of Organic Remedies, a dispensary in Chambersburg, Enola and York; and Jackie Parker, community outreach director for Eastern Pennsylvania for Green Thumb Industries, which operates Rise dispensaries in Carlisle, Mechanicsburg and York.
“Our goal was to highlight the real-life success stories of women who are leading and making a difference in Pennsylvania’s emerging medical cannabis industry,” said Chris Woods, president and CEO of Terrapin Pennsylvania.
The panelists talked of the importance of diversifying the medical marijuana workforce as the industry continues to grow quickly throughout the state.
After two years of operation in Pennsylvania, the state’s medical marijuana industry has earned more than $500,000 between dispensary sales to patients and grower/processor sales to dispensaries, according to the Pennsylvania Department of Health.
The panel members spoke on the need to educate Pennsylvanians on the benefits of medical marijuana, targeting misinformation on the uses of the product and its benefits as a medicine.
“If we continue working together as an industry, we can be as impactful on economic growth as the natural gas industry or gaming industry,” Parker said. “We are creating jobs, building communities by repurposing underutilized or vacant buildings, providing revenue for the state and looking out for the health of Pennsylvanians.”
During the panel, Ware said that medical cannabis’ major speedbump continues to be its status as a federally illegal drug. She said that the nation still needs to address its framework for regulating the medicine.
“We are faced with myriad regulations that don’t have a meaningful impact on ensuring high-quality, safe products,” Ware said.
Kelly Greenland, chief scientific officer at Keystone State Testing, works in their medical marijuana laboratory in Lower Paxton Township.
In Pennsylvania, four laboratories are often the last line of defense between the medical marijuana manufacturer and the consumer.
And those labs’ role in public safety is becoming more apparent in light of the rise in lung-injury cases connected to the use of cannabis-based products in e-cigarette and vaping products.
As of October 15, the Centers for Disease Control and Prevention reported that cases of lung injury among vape and e-cigarette users had killed 33 people and injured 1,479.
The New York State Department of Health found cases in the Empire State involved cannabis vaping products, many of which tested for high levels of vitamin E acetate, a nutritional supplement used in vitamins or ointments that can be fatal if inhaled.
Some medical marijuana testing facilities in Pennsylvania are adding vitamin E acetate to their portfolio of tests, but they are currently not mandated to do so.
In many cases, those products were untested and sold in states without recreational marijuana laws, the New York State Department of Health wrote in a statement last month.
“If it weren’t for testing labs, people would die,” said Kelly Greenland, chief scientific officer at Keystone State Testing, a medical marijuana laboratory in Lower Paxton Township, Dauphin County. “Even if the growers are trying to do it right, they need the science behind them to say (the medical cannabis) is correct.”
Pennsylvania has a list of requirements that all state-approved medical marijuana growers and processers must meet before their products are sold at dispensaries. The companies hire one of the state’s labs, who must test for metals such as arsenic and lead, microbials such as salmonella, and mold and pesticides like Butane and Ethanol.
The labs are free to test for more than the state requires. Keystone State Testing, and Allentown-based PCR Labs LLC, both added vitamin E acetate to their regimen following news of its potential connection to the vaping epidemic. The state’s other two labs, Steep Hill Pennsylvania in Harrisburg, and ACT Laboratories of Pennsylvania in Clearfield and Westmoreland counties, could not be reached for comment.
“We offer this test so that medical cannabis product manufacturers of Pennsylvania can supply their patients with an official report that states their products do not contain vitamin E acetate,” said Corey Fitze, COO of PCR. “There has been no evidence of any regulated products in Pennsylvania containing the substance, but offering this test ensures consumer confidence and prevents patients from returning to the illicit market.”
Standardization needed
Along with the ability to decide what tests they offer growers and processors, labs are free to choose the kind of tests they use to detect contaminants. That inconsistency in the testing may not be good for the industry, according to Russel Krupnitsky, CEO of Keystone State Testing.
“Everyone can (test the marijuana) differently,” Krupnitsky said. “There is no consistency or steadiness in the field. It is an uphill battle where things aren’t only unclear but nonexistent.”
The lack of standardization can also be a breeding ground for “lab shopping,” he said, noting that some labs will offer tests capable of detecting the highest THC level allowable to attract more contracts.
“They have a lot of competition, I understand it from their perspective,” Krupnitsky said. “If a lab is telling them they have a higher percentage of THC, you can guess who they will go with.”
Keystone’s leadership hopes to see more regulation and management from the state Department of Health. Both praised the department’s handling of the program, but said it is working with limited resources at a time when the medical marijuana industry is quickly expanding.
Medical marijuana in Pennsylvania is a more than $350 million industry with more than 200,000 Pennsylvanians registered to purchase the product, according to the state department.
Going beyond the regs
Not all medical marijuana processors use all of the additional services a laboratory can offer, but officials at PA Options for Wellness, a Harrisburg-based medical marijuana research company, say they will need to test beyond the regulations for the patient-base they serve.
PA Options is building a 65,000-square-foot plant in Penn Township, Perry County, where medical cannabis will be grown, processed, manufactured and researched as a part of the state’s medical marijuana research program.
To more accurately research the drug and its effects on various illnesses, PA Options plans to have one of the state-approved labs verify their test results.
“We will follow the states regulations but we might have more extensive requirements over and above what the state requires,” said Thomas Trite, CEO of PA Options. “Our focus will be completely on patient safety.”
The company plans to back up its own testing by submitted its product to neutral lab, he said. “We will make sure they were properly tested and we are comfortable with the makeup of the product.”
Homogenous testing across the country could be in the near future if the federal government legalizes either marijuana for medical or recreational use and federal oversight is established, Greenland said.
Until then, the states will have to continue to oversee their separate programs and regulate them as they see fit.
“Things happen in the food industry all the time and various other industries but because there is no CDC or EPA governing marijuana, it’s more important for the lab to have the highest level of integrity to avoid potential illness or death,” Krupnitsky said.
Keystone Canna Remedies, the first medical marijuana dispensary in the state, opened on Stefko Boulevard in Bethlehem in early 2018. The family-owned and operated company leases the building from a family friend.
For cannabis entrepreneurs, finding a place to operate their business presents considerable challenges amidst the uncertainty surrounding the legality of cannabis.
It’s an industry rife with risk, but also opportunities.
On the one hand, property owners can often charge higher rents knowing that cannabis entrepreneurs have fewer options for finding space to set up shop. On the other hand, finding a building to purchase for a cannabis operation presents its own set of legal and financial challenges.
“A lot of property owners are very nervous about renting to cannabis businesses,” said Morgan Fox, spokesperson for The National Cannabis Industry Association, a nonprofit trade association and advocacy group in Washington, D.C. “State and local authorities can institute asset forfeiture.”
The threat of asset seizure by these authorities can make property owners less willing to rent.
While there are certainly risks, entrepreneurs could benefit from the changing attitudes and beliefs about cannabis as they look to offer a place for their products.
Cannabis entrepreneurs are sitting at the forefront of an emerging trend. While it’s a turbulent and uncertain one, it’s an industry that’s growing as new companies make inroads throughout the state to open dispensaries for medical marijuana.
Whether it’s better to rent or buy commercial real estate depends on the user, but Fox said property owners should not be afraid to rent to cannabis businesses. If property owners can view these businesses as those that could contribute to economic development through business and job growth, that could turn things around.
“The stigma is certainly starting to erode,” Fox said. “On the national level, it already has. Having cannabis businesses in their jurisdiction is beneficial to their cities and towns in terms of job creation.”
However, finding a place to locate continues to be a conundrum for these businesses. Often the places available to the industry are limited by local zoning rules, he said. Municipalities may force these businesses into industrial zones, which cuts down the number of properties available to them.
Legal concerns
In addition, state-mandated security regulations are tough, Fox said, partly because few banks are willing to provide services to the industry because of its murky legal status. That complication forces many to be cash-only, which creates crime risks.
There were many rules that made it hard to sell to a grower or seller, said Tom Skeans, managing director of SVN Imperial Realty, a brokerage firm in South Whitehall Township.
“From the brokerage side, [the firm] really wasn’t going to get involved in it because of the risk,” Skeans said. “Normally, if you have a small tenant, the only risk factor is, are they going to succeed?”
As a broker, Skeans said he has made an intentional choice not to get involved in this industry because it’s so heavily regulated, particularly because banks are federally regulated and it is federally illegal to sell marijuana.
Until the legal questions are resolved, cannabis entrepreneurs will be better off owning their shops, he said. And that’s a tough choice.
“In general, for a business, renting is always going to be better because you have an easier exit, Skeans said. “Buying and selling real estate is really expensive.”
Dealing with uncertainty
Since distribution and sales remain illegal under federal law, that creates uncertainty, particularly as it relates to the enforcement of contracts with cannabis businesses, said Paul McGinley, a partner in the Allentown law firm Gross McGinley LLP.
It affects their ability to get property insurance, title insurance and to ensure the validity of their leases, he added.
“Until the federal government says that cannabis is no longer a controlled substance, there’s going to continue to be some uncertainty,” McGinley said. “What we are hearing is that it’s driving those businesses to use state credit unions as opposed to fiduciary-chartered banks.”
Generally, banks do not want to do business with a business that’s illegal under federal law, McGinley said.
While Pennsylvania allows marijuana dispensaries, it’s unclear what the federal government would do should it decide to step in, McGinley said. So far, the U.S. Justice Department is leaving these facilities alone.
“The good news from the cannabis industry point of view is that while federal law continues to say cannabis cultivation and production is illegal, there’s no appetite at the federal level to enforce that statute,” McGinley said. “Cannabis seems to be a very fast growing industry.”
In the meantime, property owners are trying to write provisions into their leases that protect them from potential federal enforcement practices. Essentially, the provision would outline how the tenant would conduct him or herself in a legal fashion, often requiring a large security deposit, he added.
On the purchasing side, buyers would need to prove they can obtain title insurance, even for a lawful dispensary business in Pennsylvania.
In other states, some cannabis businesses are bifurcating their operations, creating one entity as the licensed business and a separate one as the property owner, he said.
Getting creative
McGinley has seen massive growth in public support to legalize medical marijuana, as well pressure on states to legalize recreational use. That, he thinks, is giving many entrepreneurs the confidence to enter the industry.
One Lehigh Valley dispensary has established a rare real estate arrangement.
“Because of our business and the federal illegality of it, my preference was always to have a standalone building and not deal with lenders or tenants,” said Patricia Gregory, a lawyer at PG&R Law Firm.
Gregory is one of the owners of Keystone Canna Remedies, the first medical-marijuana dispensary in the state. The family owned and operated company leases the Bethlehem building from a family friend.
The building, which sits on Stefko Boulevard across from the Just Born factory, opened in early 2018. While it may be along a fairly high-traffic area, the building is not considered in the real estate world to be a Class-A (often newer, higher quality) property.
And one of the key reasons Gregory chose it.
“When I’m looking for real estate, I discard Class-A real estate,” she said. “Most of those kinds of properties have tenants that have use restrictions on the property. My preference is always to try to look for a nice location and stay away from Class-A properties.”
As a commercial real estate attorney, has seen many properties with marijuana use restrictions. However, among Class-D and C properties, a buyer can find less restrictive requirements.
She also believes that as long as cannabis business tenants are structuring their leases appropriately in their negotiations with property owners, they should have protection from legal pitfalls.
One tip would be to include numerous renewal options, she said. In addition, from a tenant’s perspective, it’s good to make sure the lease terms are tied to the market rent for retailers in general, not specific to cannabis users, which are sometimes treated differently, she said.
Moreover, buying a site can be an option if the right institution is behind the financing.
Gregory and the other owners of Keystone Canna used New Jersey-based Parke Bank to finance the purchase of a second Keystone Canna dispensary, which opened earlier this year on Hamilton Boulevard in South Whitehall Township.
“Having that as an option really increases what we can do,” she said. “Without having that kind of financing, buying wasn’t an option.”
Keystone Canna plans to open a third location in Stroud Township. It is seeking a building permit for a leased property.
The Stroud Township building has one other tenant and with that property under lease, Keystone plans to open that site in the first quarter of next year.
“What’s critical is you have to make sure you have sufficient term on your lease so you can control your rent,” Gregory said. “At least 20 years is a good length.”
Whether they buy or own their own real estate, it’s hard for any cannabis entrepreneur to set up shop, she acknowledged.
“But you have to weather those early years,” she said. “There’s always the hope the federal government will change the law. As time goes on, I think you are going to see some significant changes.”
A new bill that would not only legalize recreational use of cannabis in Pennsylvania, but also ensure small business owners aren’t crowded out of the market by larger players, has been introduced in the state Senate.
Senators Daylin Leach, D-Montgomery/Delaware, and Sharif Street, D-Philadelphia, co-sponsored Senate Bill 350 to end what they described as the state’s prohibition of cannabis. And it’s a bill that’s crafted to make sure small businesses can get a foot in the door in what is expected to be a very lucrative industry.
The sale of cannabis for medical purposes was legalized in 2016 and the first sales began in early 2018. This bill would allow recreational use of cannabis by anyone 21 or older. It would also expunge the criminal records of those arrested for cannabis-related crimes in the past.
Leach said the social justice component of the bill is important to him. The prohibition of cannabis “has resulted in about 25,000 Pennsylvanians, disproportionately people of color, being put into the criminal justice system per year,” he said. “It costs the state more than a half-billion dollars per year to arrest, prosecute, incarcerate and monitor people arrested for cannabis-related offenses.”
Protecting business
The measure could also create growing and selling opportunities for businesses and individuals, Leach said.
Under the bill, the state Department of Agriculture would oversee cannabis growers, including micro-growers and home-growers, processers, dispensaries, use lounges and deliverers. Leach said the bill was crafted to create business opportunities for businesses and individuals at different income levels and protect the industry from being monopolized by large corporations.
One way it helps small business is by keeping fees reasonable, he said. A dispensary permit would cost $5,000 up front and $5,000 to renew annually. The bill would also limit the number of permits a company could hold, a move that would prevent large businesses from gaining an “outsized market share” or monopolizing the market, Leach said.
A person may have a business interest in up to three dispensary permits, one grower permit, one micro-grower permit, one processor permit, and one home-grower permit.
But one small business that would be impacted by the bill isn’t thrilled with some of the components in the bill. Patricia Gregory, counsel and co-owner of Keystone Canna Remedies, which has dispensaries in Bethlehem and South Whitehall, said she feels with no limit on the number of total permits the state will issue, there will be too much competition.
“This is a hard industry to be in,” Gregory said. “You’re setting up a lot of small businesses for failure.”
Leach said he understands those concerns and agrees that not everyone who gets a permit will succeed in the industry.
“It is true that businesses will fail, but that’s true in any industry. We don’t have limits on pizza restaurants,” he said. “Our job is not to rig the market.”
He said there are clearly differences with cannabis because, like alcohol, it is an intoxicant and needs to be controlled in stricter ways than some industries. But in the end he wants the cannabis industry to be a ‘meritocracy’ where anyone with a good product will have a chance to succeed.
“It’s the free market,” he said. “Who succeeds will be up to the market and the customer.”
Medical cannabis dispensaries will have a leg up on the competition because they already have facilities and the know how to take the lead in the industry, Leach said.
Gregory also raised concerns over the bill’s lack of protocols and testing requirements, such as those the medical cannabis dispensaries must adhere to.
Leach pointed to California where sellers do their own testing because they want to ensure the quality of the product they are selling.
Local support
Leach said that the bill has gotten support from his constituents. More than 3,000 people signed on to be “citizen co-sponsors” of the bill on his website.
“We’ve worked with hundreds of advocates, experts and stakeholders over the last two years drafting legislation the people support,” Leach said. “We’re confident this legislation will create an efficient new industry that’s good for all Pennsylvanians.”
Currently, 11 states and Washington, D.C. have legalized recreational pot use in some form, and Leach noted that, despite a federal ban on cannabis, the U.S. Department of Justice has largely allowed those states to operate without interference.
PA Options for Wellness broke ground on its newest facility in Perry County this week. PHOTO/IOANNIS PASHAKIS
One of the first of three medical marijuana research organizations approved by the state broke ground Wednesday on a 65,000-square-foot facility in Penn Township, Perry County where cannabis will be grown, processed, manufactured and researched.
The medical marijuana company and Penn State were approved in June to take part in the state’s medical marijuana research program by the Pennsylvania Department of Health. Known as clinical registrants by the state, the authorized companies are able to grow, process, manufacture and distribute medical marijuana products as they research its effects at the facility.
“Our agreement is that we are looking for any concerns with the cannabis and we will report any positive or negative findings,” said Thomas Trite, CEO of PA Options. “We have been focused on education and research from the beginning, and it will be an ongoing process of building the educational resources as we learn more about the products and the diseases this product works well with.”
PA Options plans to have the facility finished within 10 months. When completed, the company will produce marijuana that is either used in clinical trials held at the facility or sold at one of six dispensaries the state has permitted the company to open.
Certain portions of the facility are expected to be completed in stages, allowing PA Options to begin growing and research before the entire operation is ready, Trite said.
The company plans to initially staff 15 to 20 people at the facility, which Trite said could grow to 80 employees in the future. The company’s dispensaries, which will sell products by PA Options as well as medical marijuana vetted by PA Options to be suitable for its patients, could have as many as 20 employees each.
PA Options and Penn State College of Medicine will look at all of the 21 medical conditions approved by the state for treatment with medical marijuana. Those conditions include opioid-use disorder, epilepsy, cancer and post-traumatic stress disorder (PTSD).
Marijuana grown by PA Options will only be utilized by the company for its own research and sales, but a portion of the marijuana sales will be given to Penn State to pay for research.
Penn State will provide the company with resources, including databases to document the findings of PA Options researchers.
“Right now, (medical cannabis) is the Wild West, and you get whatever the dispensary has,” said Kent Vrana, chair of the department of pharmacology at Penn State College of Medicine. “We need to provide doctors with some evidence to predict what will be effective for our patients.”
In addition to PA Options, the state has also approved Agronomed Biologics LLC, affiliated with Drexel University of Medicine in Philadelphia, and MLH Explorations LLC, affiliated with Sidney Kimmel Medical College at Thomas Jefferson University in Philadelphia.
The Pennsylvania Department of Health is looking to jumpstart five more marijuana research programs with its latest round of applicants.
The state is once again accepting applications for entities looking to grow, process and dispense marijuana for one of five state-approved research centers.
As a part of the 2016 medical marijuana law, eight Pennsylvania-based medical schools were chosen to lead the state in medical marijuana research.
The schools, known as academic clinical research centers, are required to partner with entities that will provide marijuana for clinical tests and dispense the drug to patients with medical marijuana licenses. Proceeds of the medical marijuana sales can be used to help fund the school’s research.
The application process has proven difficult for the state, with the Department of Health declining the first round of applicants, known as clinical registrants, in December. Applicants are judged based on their diversity plans, plans of operations, community impact and organization, ownership, capital and tax status.
This June marked the end of the state’s second round of applications, which resulted in the approval of three clinical registrants.
The three clinical registrants approved to begin clinical trials with their partnered research centers were: Harrisburg-based PA Options for Wellness and Penn State College of Medicine; Agronomed Biologics LLC and Drexel University of Medicine in Philadelphia; and MLH Explorations LLC, affiliated with Sidney Kimmel Medical College at Thomas Jefferson University in Philadelphia.
Five medical centers will be unable to start their medical marijuana research until they can partner with a clinical registrant, an issue that the department hopes to fix with the newest applicants.
Each medical center is allowed one partner and the clinical registrant must include a completed research contract between it and a medical center along with the application. The applications are due to the department by Oct. 10.
“We are looking forward to continuing to grow our essential research portion of the medical marijuana program by adding to our already approved clinical registrants,” Secretary of Health Dr. Rachel Levine said. “These entities will work alongside the academic clinical research centers to ensure that patients with serious medical conditions get the most benefit. The work done by (the research centers) and (registrants) has the potential to help patients diagnosed with serious medical conditions such as cancer, PTSD, and individuals who are struggling with opioid use disorder.”
The five remaining schools are University of Pittsburg School of Medicine, Pittsburgh; Lake Erie College of Osteopathic Medicine, Erie; and Lewis Katz School of Medicine at Temple University, the Perelman School of Medicine at the University of Pennsylvania and Philadelphia College of Osteopathic Medicine in Philadelphia.
Pennsylvania’s medical marijuana industry has made $350 million in sales since the state’s first dispensary opened in February 2018, nearly tripling in five months.
John Collins, director of the Pennsylvania Office of Medical Marijuana gave an update on the progress of the state’s program to the Pennsylvania Medical Marijuana Advisory board Wednesday.
Two hundred million dollars’ worth of 4.4 million medical marijuana products were sold to the state’s 200,000 individuals registered to purchase the products, according to Collins. The medical marijuana industry’s total revenue also puts into account $150 million in sales between the state’s growers and processors of medical marijuana to dispensaries.
Likewise, the number of registrants have jumped from 116,000 to 200,000. The growth has been attributed to the continued rise in the state’s number of active dispensaries, which have gone from 45 to 60, and a rise in growers and processors from 12 to 18.
On July 20, the state Department of Health approved anxiety disorders and Tourette syndrome to be added to the list of conditions eligible for medical marijuana treatment. Since then, the rate of patients certified to use medical marijuana to treat their anxiety disorders has been particularly fast, growing by a thousand people a week, according to Collins.
“That growth rate makes it fairly comparable with how severe chronic pain rolled out initially,” Collins said, referencing the largest condition treated with medical marijuana in the state with about 50 percent of registrants in the state.
At the end of June, the state also approved a partnership between Penn State College of Medicine and Harrisburg-based grower, processer and dispensary, PA Options for Wellness. PA Options for Wellness was one of three companies to be approved as a clinical registrant for Pennsylvania’s medical marijuana research program after the first wave of applications didn’t meet the state’s standards.
The other two registrants included: Agronomed Biologics LLC, affiliated with Drexel University of Medicine in Philadelphia; and MLH Explorations LLC, affiliated with Sidney Kimmel Medical College at Thomas Jefferson University in Philadelphia.
During Wednesday’s meeting, Secretary of Health Dr. Rachel Levine said that the state Department of Health is hopeful that a third wave of applications set to begin this fall will be more fruitful and allow for all eight centers to begin research.
“Round three will open up sometime this fall for clinical registrants,” Levine said. “We are cautiously optimistic that these clinical registrants will be approved to work with the five other academic clinical research centers.”
The five other centers include Lake Erie College of Osteopathic Medicine in Erie, University of Pittsburgh School of Medicine in Pittsburgh and Lewis Katz School of Medicine at Temple University, The Perelman School of Medicine at the University of Pennsylvania and Philadelphia College of Osteopathic Medicine in Philadelphia.
Last month, the York County Economic Alliance hosted our Economics Club breakfast series on the economics of the cannabis industry. We welcomed two leaders – GTI (Green Thumb Industries), the operator of RISE facilities that grow and dispense medical marijuana; and Groff North America, part of the Wyndridge Farm family, which has stepped into the industrial hemp and CBD industries.
It’s evident the cannabis industry is growing, thriving and impacting the economy in ways we have only just begun to comprehend. 2018 was the first year for Pennsylvania’s medical marijuana program, and GTI alone experienced transactions totaling $132 million. By comparison, neighboring Maryland generated just under $100 million in its first year.
Industry leaders equate this to the forethought and inclusion of PTSD and chronic pain as qualifying conditions for medical marijuana patients in Pennsylvania. The projections after quarter one of 2019 are approximately $175 million.
With this volume of sales comes job growth. In the 10 states with legalized recreational use of marijuana, and 34 with medicinal use, the cannabis industry employs 211,000 people directly nationwide. And jobs grew 44 percent in 2018, making cannabis the fastest-growing job sector in the country right now. In Pennsylvania, only 90 people were employed in the sector at the beginning of 2018, and that has increased to 3,878 – if you’re doing the math, that’s a 4,208 percent increase (Yes, 420 is in that number).
And that is just medical marijuana.
Pennsylvania has also issued 350-plus permits for the cultivation of industrial hemp. In 2019, an estimated 5,000 to 10,000 acres of hemp will be farmed in just Pennsylvania.
Groff North America is building Hemplex, right here in Red Lion, as an industrial hemp research park – the first in the United States. With the purchase of the HempTrain equipment, the company is able to process the whole plant, producing materials for health and wellness, textiles, automotive, agriculture, construction, logistics and other industries. It’s essentially the cotton gin for hemp.
The economic impact here is uncapped. For example, the CBD industry, hemp-derived, is projected to be a $16 billion market by 2025. Groff North America has also answered this call, opening Farmacy Partners physician-owned retail store providing hemp and CBD health care products.
The direct benefits, as we know, are the jobs and tax revenue generated, but indirectly, marketing agencies, banking systems, fulfillment centers, web developers and retail shops will feel this economic boom, as well, from the new market on the scene.
One of the most notable impacts will be to the farming industry, which experienced a $9 billion net decline in 2018, with the lack of a cash crop. Now, the hemp industry is breathing new life into the crop cycle. Hemp for fiber allows traditional farmers using large-scale agricultural equipment to earn strong profits from a rotational crop. Vegetable and tobacco-style farmers also have the opportunity to farm hemp for CBD and other cannabinoid extracts.
Regardless of your personal opinion, we can’t ignore the incredible and vast impact this industry is having in our country, our commonwealth, and our county. We’re proud these industries are leading the charge while calling York County home. It’s truly high times in YoCo.
Kevin Schreiber is president and CEO of the York County Economic Alliance.
Penn State College of Medicine is hoping to start studying medical marijuana as soon as possible under a 10-year partnership with one of the first companies approved to take part in Pennsylvania’s medical marijuana research program
The company is PA Options for Wellness, a grower, processer and dispenser based in Harrisburg. It is one of the first so-called clinical registrants approved by the Pennsylvania Department of Health to begin clinical trials with an academic partner.
Penn State College of Medicine expects to start preclinical studies immediately. The studies will help the medical school determine the doses and research methods that PA Options will use in clinical trials on human subjects, according to Dr. Kent Vrana, chair of the pharmacology department at the medical school, which is in Derry Township, Dauphin County.
The studies will involve departments from across the school, including pharmacology, pediatrics, anesthesiology and public health science. They will start by using marijuana acquired legally through the federal government.
In four to six months, PA Options will begin dispensing its own medical marijuana to Pennsylvania residents certified to receive the drug. The company’s products will either be used in clinical trials or offered for sale, with some of the proceeds going to help Penn State’s research.
The college itself will not use or sell products made by PA Options.
PA Options is expected to begin clinical trials within the next six months. The trials will be double-blind, placebo-controlled, which is considered the gold standard for scientific testing, according to Vrana.
For two weeks, patients will receive doses of either marijuana or a placebo. Neither the provider nor the patient know which they are getting. The trials will give researchers a better idea of what kinds of marijuana are effective in treating which conditions.
Vrana said PA Options and Penn State College of Medicine will look at all of the 21 medical conditions approved by the state for treatment with medical marijuana. Those conditions include opioid-use disorder, epilepsy, cancer and post-traumatic stress disorder.
The state is currently looking at adding anxiety and Tourette syndrome to the list.
“I am confident not all of those will be treatable by marijuana,” Vrana said. “I want to contribute in some small way to what patients can trust.””
Population health scientists from the college will be helping PA Options create a database to document what researchers find.
“We will help them use the database to determine, for example, that the best product for chronic pain would have high CBD and low THC,” Vrana said.
CBD, or cannabidiol and THC or tetrahydrocannabinol, are two chemicals found in marijuana.
But this month, the state approved an initial group of clinical registrants. In addition to PA Options, they include: Agronomed Biologics LLC, affiliated with Drexel University of Medicine in Philadelphia; and MLH Explorations LLC, affiliated with Sidney Kimmel Medical College at Thomas Jefferson University in Philadelphia.
“Pennsylvania is on the forefront of clinical research on medical marijuana,” said Dr. Rachel Levine, Pennsylvania’s secretary of health. “This research is essential to providing physicians with more evidence-based research to make clinical decisions for their patients. It is the cornerstone of our program and the key to our clinically-based, patient-focused program for those suffering with cancer, PTSD and other serious medical conditions.”
The state so far has approved 106,000 Pennsylvania residents to use medical marijuana.
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Kevin Schreiber is president and CEO of the York County Economic Alliance.