Pennsylvania House Approves Senate-Passed Bill To Let Medical Marijuana Growers Sell Directly To Patients

The Pennsylvania House of Representatives has approved a Senate-passed bill to allow all licensed medical marijuana grower-processors in the state to sell their cannabis products directly to patients.

The legislation—which has been amended to further grant grower permits to independent dispensaries—cleared the chamber in a 114-89 vote on Wednesday. Because it was revised, it must return to the Senate for concurrence before it’s potentially sent to the governor’s desk.

Under the measure, sponsored by Sen. Chris Gebhard (R), the state Department of Health would 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. On the flip side, as amended in House, the state’s four independent dispensaries could get grower permits to cultivate products in-house.

As it stands, Pennsylvania’s medical marijuana law currently says that only 25 businesses can be licensed for marijuana growing and processing, and only five of those licensees can sell directly to patients through vertically integrated dispensaries.

That’s 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.

In the House Health Committee last month, members also adopted an amendment adding new restrictions on the ability of businesses to sell ownership of their permits.

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.

To that end, some lawmakers previously discussed using the bill as a vehicle for additional reforms, including the possibility of legalizing cannabis for adult use, or at least permitting medical marijuana patients to grow plants for personal use. But those substantive changes were not incorporated in the bill that’s being transmitted back to the Senate for concurrence. The chamber isn’t scheduled to meet again until December 11, so it may still be several weeks before that happens.

A fiscal note for the bill that was posted on Wednesday 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.

Meanwhile, another Pennsylvania House committee convened earlier this month for an informational meeting to hear from experts about adult-use marijuana legalization as legislators chart a path for the reform, which the panel’s chairman says may involve consideration of a state-run cannabis sales model.

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With a new, narrow Democratic majority in the House this session and support from Gov. Josh Shapiro (D), the prospects of legalization in Pennsylvania picked up—but there’s still an open question about how the GOP-controlled Senate might approach reform if the opposite chamber delivered it a bill.

That said, more Republican senators have come on board with the policy change, with a bipartisan legalization measure already having been filed in the body this session by Sens. Dan Laughlin (R) and Sharif Street (D), for example.

Last year, the Senate Law and Justice Committee held a series of hearings on marijuana legalization that were meant to inform legislation that the panel’s Republican chairman, Sen. Mike Regan (R), was drafting.

In addition to the more conventional legalization proposal that’s being sponsored by bipartisan senators this session, House lawmakers have also filed separate bills to legalize marijuana sales through state-run stores and to provide permits for farmers and small agriculture businesses to cultivate cannabis once adult-use sales are allowed.

Also, earlier this month, the House approved a large-scale tax reform bill that contains language to provide state-level relief to medical marijuana businesses as they continue to struggle under federal financial barriers. The reform drew the ire of Republican members—who normally champion tax cuts—as a Democratic giveaway to the cannabis industry.

Another measure to allow all licensed medical marijuana grower-processors in the state to sell their cannabis products directly to patients cleared the Senate in September, and it advanced through the House Health Committee on Monday.

Former Gov. Tom Wolf (D), who came around to support legalization near the end of his term, also signed large-scale legislation last year that included provisions to protect banks and insurers in the state that work with licensed medical marijuana businesses.

Black lawmakers separately discussed the need to ensure equity considerations are at the center of any marijuana legalization plan at a conference last month.

Shapiro, the governor, supports enacting cannabis reform and proposed to legalize and tax adult-use marijuana as part of his 2023-2024 budget request in March.

A staffer for the governor recently said that neighboring Ohio’s vote to legalize marijuana at the ballot last week serves as “another reminder” of why the state needs to leverage the “momentum” behind reform and end prohibition within its own borders.

Meanwhile, Laughlin, who is sponsoring legalization legislation this session, also sent a letter to state law enforcement in February, urging officials to take steps to protect gun rights for cannabis consumers, particularly medical marijuana patients, in light of a federal court’s recent ruling on the issue.

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Photo courtesy of Chris Wallis // Side Pocket Images.