Medical marijuana growers, labs file lawsuit against 2-lab rule

A new rule in Pennsylvania requiring cannabis growers to use different labs to test their products at the harvesting and final stages is on hold as the case is litigated in Commonwealth Court.

In early March, a group of cannabis growers and labs went to court to block the rule, saying its immediate implementation would have the result of voiding existing contracts and creating other problems.

The plaintiffs in the case are Green Analytics North LLC, doing business as Steep Hill PA; Hanging Gardens LLC; Pennsylvania Medical Solutions LLC; Curaleaf PA LLC; AES Compassionate Care LLC; Standard Farms LLC; and Parea BioSciences LLC.

Harrisburg attorney Judith Cassel, who is among those representing the plaintiffs, explained in an email that the state Department of Health developed temporary regulations for the medical marijuana program in 2017, permitting “each grower/processor to contract with a lab of their choice for testing at both of these stages.”

On March 4, the department released new, permanent regulations, mandating that one laboratory be used to test at the harvest stage and another at the final stage.

In their filing to block the two-lab rule, the plaintiffs argued that it throws a spanner into the existing system, effectively freezing the production and sale of medical cannabis, creating shortages and increased prices.

The permanent rules had been voted on and approved last October by the body that regulates the medical marijuana program in Pennsylvania. One of the reasons given by the state to defend the two-lab rule is it would better protect the public from contaminants.

Asked for a response from the Health Department, a spokesman from its press office released the following statement: “The department does not comment on pending litigation.” Its website did note that the two-lab reg is not being enforced as court action plays out.

The requirement strips “50% of the business away from a lab that previously performed testing for a grower/processor at both stages,” Cassel said. “And grower/processors lose the continuity and cost savings they achieve with using a single lab for both testing stages.”

The extra costs incurred will at least partly be passed on to patients, she said.

“The other potential harm is that production on products could be halted or less safe, which will also lead to negative impacts on patients.”

Cassel, of the firm Hawke McKeon & Sniscak LP, said the Department of Health “admits that there is no problem in Pennsylvania for which this regulation is aimed. And DOH has not justified its implementation of this regulation. In addition to not providing any rationale for the promulgation of this regulation, DOH has not provided any guidance as to its use. In other words, what if these two laboratories get two different results, which is likely since the two laboratories use different processes, different equipment, and different personnel and are testing two completely different products? … DOH doesn’t bother explaining what will happen when the inevitable discrepancies occur.”

She asked: “Will there be a third test required and would all three laboratories get different results? Does the product get destroyed? If the product is getting stalled or destroyed, that will mean less product in the market, which translates to higher prices again.”

The plaintiffs are challenging the rule legally on three counts, Cassel explained: that it is beyond DOH’s enabling statute, the regulation is an abdication of DOH regulatory responsibility, and the regulation violates the Constitution’s (state and federal) contract clause.

Both parties have been ordered by Commonwealth Court to file applications for summary relief. If neither wins, she said, “then the issues will go to full litigation.”

Oral arguments before the full court (en banc) are scheduled for May 10.

Paula Wolf is a freelance writer

Cannabis dispensary opens in Allentown

Curaleaf Holdings Inc., an international provider of consumer cannabis products, has opened a dispensary at 1801 Airport Road, Allentown.

The company’s sixth new location in Pennsylvania this year, Curaleaf Allentown expands Curaleaf’s retail presence to 18 dispensaries in Pennsylvania and 137 nationwide.

Curaleaf Allentown’s curated selection of products include Grassroots, Select and Curaleaf brands. Patients can choose from Select Elite, Select Elite Live, Grassroots full-spectrum and strain-specific RSO, Grassroots full-spectrum and strain specific RSO capsules, Grassroots pre-packaged flower, Curaleaf pre-packaged flower and Grassroots concentrates.

The new dispensary is scheduled for a Sept. 27 grand opening after celebrating a Sept. 15 soft opening Sept. 17. Curaleaf, based in Wakefield, Massachusetts, marked its latest retail opening by making a $5,000 donation to the Urban Affairs Coalition, a nonprofit dedicated to improving quality of life and building wealth in marginalized communities.

“We are excited to deepen our roots in the Keystone State with the opening of Curaleaf Allentown, our first dispensary in Lehigh County,” Matt Darin, CEO of Curaleaf, said in a release. “… We remain committed to expanding access to high-quality medical marijuana products for the state’s growing body of medical patients.”

Within Pennsylvania, the company also operates in Altoona, Bradford, Brookville, City Avenue, DuBois, Erie, Gettysburg, Greensburg, Harrisburg, Horsham, King of Prussia, Lancaster, Lebanon, Morton, Philadelphia, State College and Wayne.

Paula Wolf is a freelance writer

Senate approves cannabis banking bill 

State-legal cannabis businesses could have better access to banking and insurance services if a bill passed by the state Senate on Wednesday receives approval from the House. 

The Senate approved Senate Bill 1167, authorizing financial institutions and insurers to provide services to state-legal cannabis businesses. 

The legislation was authored by Senators John DiSanto, R-Dauphin and Perry counties and Sharif Street, D-Philadelphia, and would protect against state penalties for banks and insurers that service the medical cannabis industry. 

The approval by the Senate comes after the Pennsylvania Senate Banking and Insurance Committee bipartisan approved the legislation in late March. 

Financial institutions and insurers received guidance in 2014 from the U.S. Treasury’s Financial Crime Enforcement Network regarding how they could service cannabis-related businesses. However, federal law does not currently protect financial institutions for servicing cannabis-related businesses. 

The legislation would codify that existing climate of regulatory non-enforcement, according to a release from DiSanto.   

It would also allow the state-legal cannabis industry to operate on credit. Currently companies are forced to operate strictly with cash, making them a target for armed robberies and putting patients and employees in jeopardy, said the release. 

A Conversation With: John Fetterman, Pennsylvania Lieutenant Governor

Pa. Lt. Gov. John Fetterman


John Fetterman is currently serving as lieutenant governor of the State of Pennsylvania. He is also running as a Democrat for the U.S. Senate. He has been a longtime supporter of legalized recreational adult-use marijuana.

LVB: You have been a very vocal advocate for the legalization of recreational adult-use marijuana. How did you get started with the issue?

Fetterman: It started when I was a small town mayor working with young people. These silly charges would hold these kids back. It was just ridiculous and enforcement was vastly disproportionate on Black and brown people. Criminality associated with marijuana would not happen if it was legal. No one knocks over a convenience store for a six-pack of beer.

LVB: What are your personal feeling on marijuana?

Fetterman: Personally, I do not use marijuana and I wouldn’t even if it was legal. This is just a plant and it should be in the same basket as tobacco or alcohol. No one has ever died from a [marijuana] overdose. Prohibition just doesn’t make sense.

LVB: What has been the impact of medical marijuana, which is already legal in the state?

Fetterman: It’s approaching $1 billion in sales and I can tell you about the testimony of people who’ve used it and say it’s saved their life and allowed them to get back to normal. Just think of the people on chemo alone and it’s so many things.

Medical marijuana has proven to be an incredible success and I’m reaching out to people urging them to help us remove that last legal barrier for marijuana.

LVB: What do you expect the fiscal impact of legal recreational adult-use marijuana to have on the state?

Fetterman: We’re conservatively estimating that it could bring in $5 billion dollars over the next 20 years, estimating about $250 million in revenue a year. Can you imagine what Pennsylvania could do with that money that’s now going to cartels and dealers?

Make no mistake about it. Soon you’re going to be able to go to New Jersey and go to New York and buy as much legal weed as you want. That’s millions of dollars that Pennsylvania will be missing out on.

Look at what it’s done for states’ budgets in places that have legalization, like Oregon or California or Colorado. Even South Dakota has approved legalization. What are we doing here in Pennsylvania?

LVB: With the expenses that Pennsylvania has had over the past year coping with the COVID-19 pandemic, the state needs money more than ever. Do you think that will nudge legislators who may have been sitting on the fence?

Fetterman: Honestly, I don’t know. What we do between now and when we are able to make it legal is important. We already have our first Republican senator sponsoring marijuana legalization legislation — state Sen. Dan Laughlin, R-Erie. That’s a step. Besides, prohibition is so much harder and more expensive. We could fill Beaver Stadium every five years with people arrested for marijuana. Think of that expense.

I think I want to see some of these [legislators] say ‘Hey, I’ve evolved. Let’s legalize this and help bring millions of dollars into the state.

New recreational marijuana study shows gains for Pennsylvania economy

Legalizing recreational marijuana in Pennsylvania would support at least 32,000 full-time in-state jobs, $3.3 billion in sales per year and $520 million in annual tax revenues, according to a study released by Seattle-based Cannabis marketplace Leafly.

State Lt. Gov. John Fetterman met with Yoko Miyashita, CEO of Leafly, and Jeff Riedy, executive director of Lehigh Valley NORML, to call for the legalization of recreational cannabis in Harrisburg on Tuesday after the new study was released.

Leafly is an online platform where cannabis consumers can learn more about the many strains of cannabis and be connected to a local dispensary to buy products.
The new study, created by Leafly analysts, estimates Pennsylvania’s potential cannabis market size and the impact the industry would have on the job market by comparing Pennsylvania with states that have already gone recreational.

After New Jersey Gov. Phil Murphy’s signed New Jersey’s recreational marijuana law in February, legal cannabis stores are set to open in the state this year. The study estimates that Pennsylvania consumers could drive $200 million in annual sales to New Jersey if Pennsylvania doesn’t have its own competing industry based on comparable legal state sales.

“The reality is that there is a massive economic opportunity that Pennsylvania will miss if it does not legalize for recreational use,” said Miyashita. “Neighboring states are a half an hour drive away and you could lose millions in actual sales revenue.”

Pennsylvania currently has one of the country’s largest pools of medical cannabis patients and ranks among the country’s top 10 cannabis job-creating states, according to the survey.
Pennsylvania’s Medical Marijuana Program was signed into law in mid-2016 with the first medical marijuana dispensary opening in early 2018.

Fetterman has been a staunch supporter of Pennsylvania’s expanding its marijuana industry to include recreational cannabis.

“Legal weed is a powerful tool to create family-sustaining, full-time jobs while ending the prosecution of more than 20,000 Pennsylvanians every year,” said Fetterman. “This is a strong bipartisan issue, and it’s past time to end prohibition, right the wrongs of the War on Drugs and for Pennsylvania to reap the revenue, jobs, freedom and benefits for our farmers that more than a dozen other states already enjoy.”

Despite its support from Pennsylvania Democrats, as well as support from nearly 2 in 3 Pennsylvania voters, according to Harrisburg-based Harper Polling, recreational marijuana continues to face an uphill battle within the Republican-controlled House and Senate.

“Our plan with the original medical marijuana bill was to have our own clinical trial and it’s still premature,” said House Majority Leader Kerry Benninghoff (R-Centre County). “Our priority is getting the economy opened up, and getting people back to work and school.”

Cannabis operator closes on $25.5M Franklin Labs acquisition

Harvest Health & Recreation, a Tempe, Arizona–based multi-state cannabis operator, said it closed on the acquisition of Franklin Labs LLC, a subsidiary of CannaPharmacy, for about $25.5 million. The acquisition includes a 46,800-square-foot cultivation and manufacturing/processing facility in Reading. – (FILE PHOTO)

Harvest Health & Recreation, a Tempe, Arizona–based multi-state cannabis operator, said it closed on the acquisition of Franklin Labs LLC, a subsidiary of CannaPharmacy, for about $25.5 million

The acquisition, payable with $15.5 million in cash and a $10 million promissory note, includes a 46,800-square-foot cultivation and manufacturing/processing facility in Reading.

Pending necessary approvals, Harvest expects to expand the existing cultivation operation this year and potentially complete further expansion to support market growth.

It plans to begin manufacturing and processing operations this year during the second quarter. Franklin Labs is the only cultivation facility owned by Harvest in Pennsylvania and is expected to supply significant product to retail dispensaries across the state, the company said.

“This acquisition helps to alleviate supply constraints in a fast-growing market, while contributing to improved financial performance,” said Harvest CEO Steve White, in a statement. “This investment in Pennsylvania is an important milestone in our plan to expand operations in key states and return to profitability.”

Harvest of Reading is at 201 Lancaster Ave., and is open from 9 a.m. to 6 p.m., Tuesday through Saturday. Its other Reading location is on North Fifth Street.

Harvest affiliated entities own and operate five retail dispensaries in Pennsylvania: two in Reading, and one each in Harrisburg, Johnstown, and Scranton. Harvest affiliated entities are permitted for up to 15 total retail locations across the state.

“This investment is part of our focus on allocating capital to a core state where we can improve our financial performance by going deeper,” said Alex Howe, spokesperson for Harvest. “It will allow us to improve our margin profile of our overall Pennsylvania operations and provide high-quality products to medical patients and our existing and future stores. Pennsylvania is an important market where we see significant growth in the future.”

Will marijuana grow the region’s commercial real estate market?

The legalization of medical marijuana in Pennsylvania led to an increase in demand for industrial space for growing operations. PHOTO/GETTY IMAGES –


States where medical or recreational adult-use marijuana has been legalized have seen a boost to their commercial real estate markets.

“As more states legalize marijuana, the real estate market will progressively have to adjust,” said Jessica Lautz, vice president of demographics and behavioral insights for NAR. “From property owners, to manufacturers, to those who simply want to engage for leisure – it all touches real estate in some form.”

A survey conducted by the NAR found that more than a third of its members in states that legalized marijuana for medical and recreational use saw an increase in requests for warehouses or properties used for storage. In those same states, up to a quarter of members said the demand for storefronts grew, while a fifth said there was a greater demand for land.

But, Pennsylvania, which has only legalized medical marijuana, isn’t seeing quite as much of an impact as other states with medicinal marijuana. And Realtors in the region say they think the impact of the legalization of recreational marijuana, which is being promoted by Lt. Gov. John Fetterman, would be significant but not extraordinary.

Del Markward, president of the Markward Group in Allentown, has been keeping an eye on how the relatively new medical marijuana industry is impacting commercial real estate in eastern Pennsylvania.

“We worked on a couple of the original grow buildings in the area,” he said. “They [the state] didn’t issue very many permits so it’s not that big of an impact.”

The buildings being used by the industry are smaller than those typically used by manufacturers, Markward said. A growing facility is typically between 25,000 and 50,000 square feet, while many other manufactures in the region have facilities that are several hundred thousand square feet.

The real impact is in warehousing, he said, and since the eastern half of the state already has a robust warehousing market it’s not filling a real need.

“I have friends out in Colorado bragging that their rents are going up,” Markward said. But, since this region already has such a competitive market, he isn’t seeing that much of an impact. Likewise, because of the limited number of permits being issued, the impact of medical marijuana on the retail market hasn’t been huge.

There would be a larger impact if recreational adult-use marijuana was legalized because there would be a need for places for people to buy and perhaps even use the marijuana, Markward said.

Still, size is an issue.

Markward said there is an obvious need to fill empty retail store fronts in the region and marijuana retail locations will be filling some of that need – just not enough of it. Current dispensaries and any marijuana retailers that might appear if cannabis is legalized for recreational use, tend to be between 2,000 and 10,000 square feet.

“When you have all of these empty Kmart and Sears stores that are 120,000 square feet that’s not a huge net absorption,” he said.

Ultimately, Pennsylvania would see a positive impact on its commercial real estate market should marijuana legalization laws be extended, just not a huge one.

The Greater Lehigh Valley Realtors association is paying attention to the issue.

“Staff and leadership at the Greater Lehigh Valley Realtors have been actively monitoring marijuana legislation coming out of Harrisburg and are keeping a pulse on how current and future legislation could affect real estate, both residentially and commercially,” said Justin Porembo, CEO.

For residential real estate Porembo said the organization is honed in on how marijuana legislation could affect or change fair housing and anti-discrimination laws.

The Association, however, has not taken an official position on the legality of marijuana, whether for medicinal or recreational purposes.

Sensing a growing market, CBD retailer opens in larger space

Smooth Roots, a CBD store, moved into a full-fledged space in the Palmer Park Mall. (Submitted) –

After operating out of a kiosk in the Palmer Park Mall in Palmer Township for more than a year, the co-owner of a CBD retailer opened last week in a larger, full-fledged space in the mall.

Cannabidioil, or CBD, is an active ingredient in cannabis and part of an emerging industry.

Eddie Salzman, co-owner of Smooth Roots, sees continued growth in the industry, particularly for cannabis stores such as his that sell lab-tested CBD products.

Salzman said he opened his store in a kiosk in the mall more than a year ago and now occupies a nearly 1,600 square-foot-shop in the space formerly occupied by Kay Jewelers. The store sells oils, creams, medication and gummies, among other items.

“We were just doing good and we’ve been having a lot of good feedback in the area,” Salzman said.

The extra space gives customers more room to have consultations and allows the store to carry more products, he added.

Salzman said the focus on educating customers, coupled with the company’s experience in the industry as well as its legitimate farm-to-table CBD products helps separate his business from pack.

“There is a huge degree of difference as opposed to everyone just trying to cash in on this whole industry,” Salzman said. “I’ve been an advocate of cannabis for a long time.”

Salzman grew up in Nazareth and attended Kutztown University, discovering a desire to go into the cannabis business. In 2014, he decided to move to Oregon and immersed himself in the industry.

He completed extensive research, then worked for a marijuana dispensary, taking on roles in retail management and manufacturing and then as a compliance director for a different company in the industry. Salzman believes this experience can help him.

Smooth Roots has been growing medical marijuana in Oregon and its hemp farm is certified by the Department of Agriculture. The company produces two of its products in Oregon, State CBD and TriChome, which he described as products that help people with anxiety, pain and inflammation, and sleep and insomnia issues.

Aside from Oregon, Smooth Roots also sells some products from Pennsylvania, Washington, Colorado and California.

Some labs are certified in these states for cannabis products, he added.

Salzman said his company’s products are tested and the company checks lab results to make sure the ingredients are coming from a legitimate source and do not contain any heavy metals, pesticides, mold and other contaminants.

He officially opened the doors in the new Palmer Township space on Oct. 25 and has 10 employees. With the newest store, Smooth Roots now has four locations. One is on Hamilton Street in Allentown, another in New Hope, and a third in the Christiana Mall in Delaware.

He strives to educate customers on how the products work and show how CBD products have helped others.

By educating people, the company hopes to break down the stigma surrounding the cannabis industry.

“Coming back to the East Coast made a lot sense,” Salzman said.

The Cannabis Challenge

Pennsylvania legalized medical marijuana in 2016, and Gov. Tom Wolf has called on the state lawmakers to take the next step; allow its recreational use. Doing so would create new opportunities for entrepreneurs, and new tax revenue for the state. Today, Lehigh Valley Business reports on issues facing this niche industry and the serious obstacles that stand in its way.


Where’s the money?

Banks are reluctant to issue loans to cannabis-related businesses because the fed says it’s illegal. But a proposed law called the SAFE Act could change that.





Risky Business

Cannabis entrepreneurs face financial and legal challenges when securing real estate





Recreational pot could be a boon for business in PA

In 2014, Colorado became one of the first states to legalize the recreational use of marijuana.




Customers says ‘yes’ to hemp, ‘no’ to cannabis

While banned for decades, passage of the 2018 Farm Bill allowed farmers to return an historic crop to their fields – hemp. More importantly, it made it legal for banking institutions to loan money to hemp-related businesses.




Quality control: Testing labs say consistency is needed

In Pennsylvania, four laboratories are often the last line of defense between the medical marijuana manufacturer and the consumer.






Cannabis operator opens second dispensary in Reading

Harvest Health & Recreation, a Tempe, Arizona-based cannabis company, announced the opening of Harvest of Reading, its second Reading dispensary and the second Harvest-affiliated dispensary in Pennsylvania.

“Pennsylvania has quickly become an important state for our long-term plans,” said Harvest CEO Steve White, in a statement.

Harvest Health & Recreation, a cannabis company, opened a second dispensary in Reading. (Submitted) –

Harvest of Reading is at 201 Lancaster Ave., and is open from 9 a.m. to 6 p.m., Tuesday through Saturday. Its other Reading location is on North Fifth Street.

Headquartered in Tempe, Arizona, Harvest Health is a multi-state cannabis operator.

“Harvest is committed to improving patient access in all markets, including those traditionally underserved,” said Alex Howe, spokesperson for Harvest Health & Recreation, in a statement. “The Lancaster [Ave.] store is a high-traffic location that we feel will serve the market well.”

Harvest has 12 employees ready to answer any questions patients have, including two licensed Pennsylvania pharmacists, Howe said.

Harvest will aim to improve lives through cannabis, provide medicated products to consumers and education around their use.

In Pennsylvania, Harvest plans to open additional stores in Johnstown, Scranton and Harrisburg, Howe said.

Gov. Tom Wolf signed the medical marijuana program into law in April 2016. As of Sept. 23, the state office reported that in Pennsylvania, there are more than 202,500 patients registered, more than 176,500 patient certifications issued; more than 133,500 active certifications; more than 1,200 approved practitioners; more than 5,300,000 products sold; and more than $410 million in total sales.

Hemp is big business in Pa.

This year, the Pennsylvania Department of Agriculture issued more than 300 permits to grow hemp on nearly 600 acres at more than 800 locations around the state, according to a press release.

Gov. Wolf visiting a hemp farm in Blair County -submitted

Hemp and marijuana are different species of the same plant, but unlike marijuana, hemp is grown mainly for fiber and seed and must maintain a lower concentration of the psychoactive chemical tetrahydrocannabinol, or THC.

Gov. Tom Wolf and Agriculture Secretary Russell Redding highlighted the opportunities available to hemp growers and processors across the commonwealth at a recent visit to a hemp farm in Blair County.

Pennsylvania has a tremendous opportunity to capitalize on a new and in-demand market for hemp,” said Wolf. “This is a versatile product with many uses, and it’s a product that consumers want.”

Pennsylvania recently designated hemp as a controlled plant, which requires all growers to register and obtain permits through the Department of Agriculture.

“Hemp is a new/old crop that has the potential to make a big impact on Pennsylvania’s agricultural and economic landscape,” said Sec. Redding. “It’s a crop with both a rich history and a bright future here in the commonwealth.”

This summer, Wolf signed a state farm bill that created a state-level grant program to invest in and encourage farming of hemp.

Hemp was grown in Pennsylvania and throughout the United States until after World War II but became regulated along with marijuana and its cultivation was prohibited.