Organization Types Under The Medical Marijuana Act – Pennsylvania
What is a Medical Marijuana Dispensary?
A dispensary operates like a pharmacy, and they will be regulated just as strictly. This is where patients, caregivers and some health care organizations will go to pick up the medical marijuana they are legally entitled to.
A “Dispensary” under the Medical Marijuana Act is defined as follows:
“A person, including a natural person, corporation, partnership, association, trust or other entity, or any combination thereof, which holds a permit issued by the Department to dispense medical marijuana. The term does not include a health care medical marijuana organization under chapter 19.” (Medical Marijuana Act Chapter 1 Section 103)
A permit for a medical marijuana dispensary requires an initial fee of $5,000, and a permit fee of $30,000. Proof of $150,000 in capital is required, and only 50 permits will be initially granted.
What is a Medical Marijuana Grower and Processor?
A medical marijuana grower will grow the cannabis sativa plant to be used for medical purposes. A medical marijuana processor will turn the marijuana plant into the medical forms allowed in the Medical Marijuana Act. Medical marijuana dispensaries must buy their products from someone with a medical marijuana grower/processor permit.
Under the Medical Marijuana Act, growers and processors are grouped together, and they will receive the same permit. However, growers and processors will each have similar and unique regulations that pertain to their particular business.
The Medical Marijuana Act defines a marijuana “Grower” and “Processor” as follows:
“A person, including a natural person, corporation, partnership, association, trust or other entity, or any combination thereof, which holds a permit from the Department under this Act to grow and process medical marijuana. The term does not include a health care medical marijuana organization under chapter 19.” (Medical Marijuana Act Chapter 1 Section 103)
There will be 25 permits for growers and processors, and five of those will also be allowed to receive a dispensary permit. The permit fees for growers and processers are steeper than dispensary fees: the initial fee is a non-refundable $10,000, and a $20,000 refundable fee is required as well.
Health Care Medical Marijuana Organizations
Health care medical marijuana organizations are health care facilities that are approved to use medical marijuana and participate in the new research program. These organizations are regulated to pristine standards, and have permit fees with capital requirements in the millions. Chapter 19 in the Medical Marijuana Act was designed to create and fund a new medical marijuana research program to facilitate research on marijuana medical treatment for serious diseases, and to identify other possible medical uses for marijuana.
“Health Care Medical Marijuana Organizations” are defined as follows:
“A vertically integrated health system approved by the department to dispense medical marijuana or grow and process medical marijuana, or both, in accordance with a research study under this chapter.” (Medical Marijuana Act Chapter 19 Section 1901)
A “Vertically Integrated Health System” is defined as follows:
“A health delivery system licensed under the Act of July 19, 1979 (p.l.130, no.48), known as the Health Care Facilities Act, in which the complete spectrum of care, including primary and specialty care, hospitalization and pharmaceutical care, is provided within a single organization.” (Medical Marijuana Act Chapter 19 Section 1901)
An organization only qualifies under Chapter 19 as a health care medical marijuana organization if it is used for the research study established in the Act. Health care licensing is required for growing and dispensing as a health care medical marijuana organization.
Starting a medical marijuana business is complex, but there are many aspects of starting a medical marijuana business that is no different than any other business startup venture. You should have a business plan, and you need to decide the legal organizational structure for your business. (Businesses are allowed to change organizational structure during the course of business.)