Pennsylvania Governor Signs Bill To Let Medical Marijuana Growers Sell Directly To Patients, While Also Allowing Dispensaries To Cultivate

The governor of Pennsylvania has signed a bill to allow all licensed medical marijuana grower-processors in the state to serve as retailers and sell their cannabis products directly to patients.

Just two days after the Senate gave final approval to the legislation—which was amended to further grant grower permits to independent dispensaries—Gov. Josh Shapiro (D) signed it into law on Thursday.

Under the measure, sponsored by Sen. Chris Gebhard (R), the state Department of Health will create a process to allow the state’s 10 independent marijuana grower-processors to apply to obtain a dispensary permit to engage in direct commerce with patients. Meanwhile, the state’s four independent dispensaries can also get grower permits to cultivate products in-house.

This replaces the current law that states no more than five of the state’s 25 grower-processor license holders can also hold dispensary licenses. Others must sell their products to a licensed dispensary, which in turn can sell products to patients.

This has created a near-monopoly in the state, giving select out-of-state operators dominance over the industry, and supporters say allowing independent in-state growers to vertically integrate represents a partial remedy.

A fiscal note posted last month also estimates that the reform would bring in nearly $2 million in revenue from application and permit fees. For subsequent fiscal years, the state could expect to generate about $90,000 annually. Some of that revenue would be offset by administrative costs that the health department would take on to process applications and oversee the permitting.

Over the course of the legislative session, some lawmakers had predicted SB 773 would be amended to make more sweeping changes to the state’s marijuana law, for example by legalizing home cultivation of medical marijuana or even expanding legalization to include adult use. But those substantive changes were not ultimately incorporated.

One provision in the legislation that the governor signed would bar licensees from transferring permits for a period of time, which lawmakers said is meant to prevent larger, sometimes out-of-state companies to buy up permits and control the market.

While Pennsylvania has yet to enact adult-use legalization, there’s a growing expectation that the state will eventually follow others in the region and begin allowing recreational sales. Some businesses have felt the strain as anticipation about the policy change builds, especially as wholesale marijuana prices drop and multi-state operators continue to acquire smaller businesses.

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A Pennsylvania House committee held a second informational hearing on marijuana legalization this week as momentum builds in the state to enact the reform. After Ohio voters’ decision last month to legalize recreational cannabis, both Pennsylvania’s governor and U.S. Sen. John Fetterman (D-PA) have said it’s time for Pennsylvania to make the change, too.

Fetterman said recently that the state is being “lapped” on marijuana policy as neighboring states enact legalization.

Two bipartisan lawmakers are now seeking co-sponsors for a more modest change. Sens. Camera Bartolotta (R) and Sharif Street (D) recently circulated a legislative proposal that would decriminalize marijuana, downgrading simple possession from a misdemeanor crime to a civil offense.

“Medical marijuana has provided many patients with relief from their respective ailments and has aided them in their ability to cope effectively,” says a co-sponsorship memo sent out earlier this month. “Yet, we still criminalize recreational cannabis and incarcerate those who possess small amounts of it. This seems injudicious and, frankly, inappropriate.”

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Photo courtesy of Chris Wallis // Side Pocket Images.