LAST UPDATED NOVEMBER 23, 2016
Are you in the process of building an investor group to apply for a Pennsylvania Medical Cannabis dispensary or grower/processor license?
Are you trying to raise capital to apply for a Pennsylvania Medical Cannabis dispensary or grower/processor license?
Are you already fully funded and simply need legal guidance with the application process?
STEP ONE | Establish the Entity & Raising Capital
We can help. We can help you create a private placement security offering to raise the capital to fund your medical cannabis business. Our securities lawyers will guide you through the process step by step; we want to be your trusted partner in this process and we are invested in your success.
STEP TWO | Applying for the License
We have deep experience dealing with federal and state regulations and we can shepherd you through the application process for a Medical Cannabis license here in Pennsylvania. Whether you are applying to become a grower/processor or for a dispensary license, we can help you with the application process. Our franchise attorneys have been navigating the regulatory waters of the Federal Trade Commission and the various state agencies that oversee franchising for over 20 years. We will apply this experience and diligent attention to detail when working with you on your license application.
STEP THREE (if necessary) | Challenging a Denial
If you are not granted a license you need to be prepared to challenge the process. These are newly minted rules and regulations that are bound to be full of ambiguities and issues. Only a limited number of organizations will be granted licenses, which will in essence be a moat around your new business as the barrier to entry will not just be economic but regulatory. If you are denied the application, you have to be prepared to fight to reverse any arbitrary or ambiguous decision that is not in your favor. Our litigation team has decades of experience fighting for our client’s business interest. We have successfully pursued due process claims against government and quasi-government entities and are prepared to challenge any license denials in this new area of the law. No law firms have direct experience with these regulations in Pennsylvania because they are so new. You need a legal team behind your new business that is experienced, aggressive, and creative.
STEP FOUR | Opening the Business and Complying with the Regulations
The Medical Cannabis business is going to remain a highly regulated business and it is imperative that your new business sets up the procedures and protocols to comply. The expected high margins and profits need to be safeguarded against regulatory mistakes. The business can only operate if the license remains in good standing. Our regulatory team has experience in helping new businesses work through new regulations and setting up processes and procedures to efficiently comply with the myriad of government rules that will govern the Medical Marijuana industry in Pennsylvania.
Full regulations for Act 16 - The Pennsylvania Medical Marijuana Act, have not yet been issued by the state. However, temporary regulations and guidance have been issued. This information may be superseded by additional regulations issued by the State of Pennsylvania.
Whether you are applying for a grower/processor license or a dispensary license, the permitting process for both is similar. An applicant will need to disclose the following information when applying for either license:
• A description of the business organization and activities
• A federal and state criminal background check
• A statement indicating the applicant is of good moral character
• The ability to maintain effective security and control to prevent diversion, abuse or other illegal conduct and
• Provide a diversity plan
• Applicants must also complete a two hour training course
The fees associated with each application are different.
• $10,000.00 Non-Refundable Application Payment
• $200,000.00 Refundable Application Payment (refundable if application is not granted)
• Applicant must have a minimum of $500,000.00 on deposit in a financial institution and proof of access to an additional $1,500,000.00 of capital
• $5,000.00 Non-Refundable Application Payment
• $30,000.00 Refundable Application Payment (refundable if application is not granted)
• Applicant must have proof of a minimum of $150,000.00 in capital available
Initially, the state is going to issue 25 licenses for Growers/processors and 50 licenses for Dispensaries. Applicants would be well served to understand that these financial figures are given as minimum starting points. Pennsylvania has not issued guidance on exactly how it will evaluate the applications. Experience in other states has shown that those groups that are better capitalized will have a better opportunity at having their application approved.
We welcome the opportunity to confidentially discuss how to structure your company and to apply for the license. One of our attorneys, Andrew Matson, is a member of the National Cannabis Bar Association who can answer any questions you may have. Please call 215-525-1165 or fill out the form on this page for more information.