When Pennsylvania’s first sale of medical marijuana went down at a dispensary north of Pittsburgh on Valentine’s Day 2018, William Roark’s colleague came into his office to share the news.
“I looked out the window and said, ‘Look, the world didn’t end,’” said Roark, chair of the medical marijuana practice at Lansdale-based law firm Hamburg, Rubin, Mullin, Maxwell & Lupin. “A whole new industry happened, but the world didn’t end. It wasn’t some cataclysmic shift.”
It took a few more months for Philadelphia’s first dispensary, Restore, to open in Fishtown. Five years later there are now 17 dispensaries in the city, out of 178 across Pa.
Industry experts see Philly’s slightly delayed entry into the market — and relatively low number of dispensaries even after half a decade — as part of a trend that’s left the city underserved as a result of strict zoning requirements in the medical marijuana law, Roark told Billy Penn.
As a new frontier edges toward reality, with Harrisburg seriously considering recreational legalization, the city is moving forward with new restrictions.
Two City Council members, Republican Brian O’Neill and Democrat Curtis Jones Jr., recently sponsored a bill that would use zoning overlays to block existing dispensaries from converting to recreational sales in the future. Passed by majority vote on June 22, it would affect businesses in their districts (10 and 4, respectively), which include parts of Northeast, West and Northwest Philadelphia.
The legislation currently awaits signature on the desk of Mayor Jim Kenney. Kenney was an early advocate of decriminalizing marijuana — as councilmember, he championed the bill that made it happen — and he has recently vetoed other similarly restrictive zoning bills. It’s unclear what he’ll do with this one.
Advocates hope it doesn’t go through. Pennsylvania Cannabis Coalition executive director Meredith Buettner called the zoning bill “shortsighted” and said it would be a hindrance to diverse applicants and small businesses interested in serving their own communities.
“Laws like this really stand to limit access for folks like that to enter the market,” Buettner said. “In the long run, it will be a detriment to those districts to force folks to go through the expensive and onerous process of getting a variance to operate.”
Medical marijuana in Pennsylvania: By the numbers
- 898,992 patients and caregivers have registered for access to medical marijuana over the course of the program’s existence, per the Pa. Dept. of Health’s latest quarterly update
- 425,367 patients currently have medical marijuana cards
- 1,825 practitioners have been approved to prescribe medical marijuana
- $7.3 billion in total sales across 31 million transactions
- $109.5 million in Pa. tax revenue over the life of the program, with annual revenues peaking at $35.5 million in FY 2021
- Dispensaries are charged a $30,000 fee to begin operating
- Medical marijuana ID cards cost users $50 from the state
Corporate presence grows
It’s already difficult for independent operators to run medical marijuana operations in Pennsylvania.
In its first year, as the program was taking shape and the rules and regulations governing medical marijuana in Pa. were still being understood, there was a rush to start up operations. Billboards offering seminars on how to capitalize on the state’s newest cash crop popped up around the city, and colleges began offering certificates in medical marijuana careers.
Lawyers like Roark and others with a hand in the industry were “drinking from a firehose” as they learned what to expect, he said.
As established medical marijuana companies figured out loopholes in the commonwealth’s initial regulations — which forbid one company from owning more than five permits — there was a consolidation of operators. Many of the state’s more independent shops got rolled up into large, publicly traded and often international companies, bringing a more corporate face to the local dispensary.
There were still bumps in the road, including the vape recall in early 2022 that raised questions for consumers about the safety of the products they had been using.
Perhaps the most significant shift in the implementation of the program was the 2019 expansion of who is eligible for a card. Although the list of qualifying conditions was originally crafted to focus on the chronic pain associated with cancer and other diseases, the addition of anxiety disorders opened the door to a whole new portion of Pennsylvanians. Certifications spiked 53% in 2020 and another 64% in 2021, and anxiety was the sole qualifying condition in nearly 40% of certifications that year, according to a Spotlight PA report.
The increase in certifications coincided with the pandemic, as anxiety issues spread throughout the population, noted Buettner, of the Pa. Cannabis Coalition.
“Folks came into the regulated market — the medical market — at a really interesting time and have made the choice to continue to access safe, regulated medicine as we moved out of that period,” Buettner said. “I think that speaks volumes of the benefits that patients find in the program.”
At the same time, the bottom dropped out on prices. Even as inflation soared during the pandemic, the retail cost of a gram of marijuana from a Pennsylvania dispensary dropped from $15.67 in January 2020 to $9.81 by March 2023.
Legalization on the horizon
The next question is whether — or really, when — Pennsylvania will join neighboring states like New York, New Jersey, Delaware and Maryland by legalizing marijuana for recreational adult use.
In May, Philly state Sen. Sharif Street said he plans to team with Sen. Dan Laughlin, a Republican from Erie, to introduce bipartisan legislation to legalize adult use. Pa. House Rep. David Delloso, a Delco Democrat, introduced a bill to legalize recreational sales, but route them through the same state-run system as Wine & Spirits stores to keep out-of-state corporations from getting an edge.
Gov. Josh Shapiro, meanwhile, included in his 2023-24 budget a proposal to tax wholesale marijuana products at 20%, adding the caveat “once legalized.” The budget estimated adult use sales would begin in January 2025.
“We’re hopeful for Gov. Shapiro’s leadership on this issue and the new-won majority of the House Democrats,” said Cannabis Coalition director Buettner. “We’re hoping that with Democrats being in charge of the House and a governor being supportive of adult use cannabis, we’ll see movement soon.”
The Department of Health, which operates the medical marijuana program, has not taken a stance.
“As a public health agency, the department’s primary responsibility is to ensure that patients have access to treatments that will aid in treating their serious medical conditions,” department spokesperson Mark O’Neill told Billy Penn.
Roark, the Lansdale-based lawyer, said that with “serious momentum” building, the legislature is likely to vote on adult use this fall.
“If that happens, then buckle up,” Roark said, “because it will be a lot like it was five years ago when you had this dramatic influx of interest.”
