PA: Medical Marijuana Legalization Sparks Business Interests

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Pennsylvania may still be shedding one of the most archaic wine and liquor systems in America, but Diane Czarkowski already has visions of marijuana dispensaries dotting the local landscape.

These would be dispensaries for people with serious medical conditions, she is quick to point out, but marijuana dispensaries nonetheless. “Communities need to be involved so they can either be supportive or be aware of the reality of the industry coming to Pennsylvania,” she said.

Mrs. Czarkowski will be the keynote speaker at a daylong program today organized by the Denver-based Marijuana Business Daily on how to start a marijuana business, targeting “Pennsylvania entrepreneurs, professionals, and investors looking to tap into the multi-billion dollar cannabis market,” according to a pre-event press release.

She and husband Jay’s Boulder, Colo.-based Canna Advisors consulting firm, started in 2013, has helped marijuana startups from Nevada to Massachusetts, and she says they have already seen strong interest among those in Pittsburgh region in getting into the cannabis business. About 150 people are expected to attend the $399 program at the Westin Convention Center Hotel, Downtown, which will cover marketing and branding, investment opportunities and regulatory issues.

“The types of teams we’re working with are deeply rooted in their communities, multi-generational Pennsylvania families that do have quite a bit of success,” she said. “Many of them have personal stories of why this [legalization] will be very helpful.”

Five months have passed since Gov. Tom Wolf signed the Medical Marijuana Act, which went into effect in May. The law establishes a marijuana program to ease patients’ pain or improve quality of life if they have been diagnosed with one of 17 specific ailments such as glaucoma, epilepsy or Crohn’s disease.

With a similar law enacted in Ohio, now half of the 50 states have legalized the medical use of cannabis to some degree, even as federal law still classifies its use – medical or otherwise – as a criminal offense.

The Pennsylvania program, overseen by the state Department of Health, won’t be operational until 2018 but for those planning to make a business investment, said Mrs. Czarkowski, the time to act is now as temporary regulations are under review.

Applications to be a grower/processor should be ready by year’s end, and dispensary applications should follow in the second quarter of 2017.

“Once the application is posted, it’s like the gun has gone off and you’re in a race to get it approved,” she said, so prospective entrepreneurs need to be ready with detailed information about their business plan.

Thar Process in O’Hara has indicated an interest in adding marijuana pills to its established lineup of high-pressure extraction products. The Pennsylvania law only allows cannabis to be distributed in pill, oil, topical or liquid form.

Initially, licenses will be awarded to 25 growers/processors and up to 50 dispensaries, each of which can have up to three retail locations.

“That’s certainly not a lot, but it’s a good start,” Mrs. Czarkowski said. And for those holding one of the licenses, she noted, “They’re guaranteed a limited pool of competitors. If they can get in early and get to market, they certainly will have a competitive advantage.”

Getting into the game won’t be cheap; those interested in becoming one of the 25 approved growers or processors must submit a non-refundable $10,000 fee and, if granted, the permit fee will cost $200,000, under the Pennsylvania law. They then face a 5 percent tax on gross revenues.

For a dispensary permit, there’s a $5,000 non-refundable application fee and a $30,000 permit fee. Applicants must also have proof they have $150,000 in capital.

The price is worth it both from a business standpoint and a societal standpoint, said Mrs. Czarkowski, whose home state of Colorado has legalized recreational pot use, generating millions of dollars for local schools and cities. She believes Pennsylvania can benefit, too.

“There’s already a thriving marijuana market,” she said. “It’s just not regulated.”

News Moderator: Katelyn Baker
Full Article: Medical Marijuana Legalization Sparks Business Interests
Author: Steve Twedt
Contact: (412) 263-1100
Photo Credit: CannabisCamera.com
Website: Pittsburgh Post-Gazette