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Medical pot industry wins ruling

Court puts brakes on Wolf's program

Pennsylvania's medical marijuana industry on Monday won a court battle with the state Department of Health, when a judge issued a preliminary injunction halting the Wolf administration's medical marijuana research program.

Commonwealth Court Judge Patricia McCullough issued the injunction Monday, after medical marijuana companies from across the state — including Cresco Yeltrah, which has a dispensary in Butler County and a grower-processor facility in Jefferson County — objected to the state's plan.

The plan, which administration officials announced in March, calls for the certification of medical marijuana research centers throughout the state. Officials outlined a process by which medical schools could seek approval to conduct research, and on May 14 Gov. Tom Wolf announced the certification of eight “Medical Marijuana Academic Clinical Research Centers.”

Included in the list of certified universities were the University of Pittsburgh School of Medicine and Lake Erie College of Osteopathic Medicine.

The state's plan also called for the research centers to work with separate marijuana growers, called “clinical registrants,” which would supply them with the drug.

That's the aspect of the plan to which members of the state's marijuana industry objected to in court, arguing that officials effectively rewrote regulations governing how licenses for growing and dispensing medical marijuana were awarded, months after the firms sunk “tens of millions of dollars” into securing licenses for themselves through a competitive application process that saw hundreds of applicants.

“It was disingenuous. It was switching the rules of an industry,” said Judith Cassel, a Harrisburg-based attorney who represented Cresco Yeltrah and other medical marijuana companies in Commonwealth Court.

In their petition before Judge McCullough, the companies argued that the temporary regulations for the research providers “turn (them) into super-permittees chosen by (the universities) in privately-negotiated contracts that compete directly,” with companies that went through the state's first round of permit applications.

In her ruling Monday, McCullough wrote that the companies had presented “sufficient evidence” that the DOH overstepped when it issued the temporary regulations. She said the rules for CRs don't live up to the letter or the spirit of research provisions within the state law authorizing medical marijuana, known as Chapter 20.

“(T)he Regulations appear to be inconsistent with the legislative intent of Chapter 20, which was to permit distribution of medical marijuana for purposes of and in conjunction with research studies ...” the opinion reads, in part.

“Despite Chapter 20's apparent goal of research, the Regulations appear to require only a minimal commitment to research in order for a CR to obtain and retain a permit,” McCullough wrote.

Cassel, in an interview Wednesday, said the companies aren't trying to hold up research on medical marijuana. But, she said, the companies object to a process that allowed CR's to circumvent the state's public, highly-competitive permitting process and appear to allow them to position themselves to flood the medical marijuana market with product.

“DOH, if they were truly interested in having research, could solve this tomorrow,” she said. “They could issue regulations that are in line with the (state law). My clients are ready tomorrow to do research with any (school) that wants to do research.”

In a statement on the ruling, a DOH spokesman said state officials continue to support the program.

“The research program was rolled out in consultation with the sponsors of the original legislation and our approach was meant to ensure lower costs, more accessibility and ground-breaking treatments. We will continue to pursue our nation-leading research component and we are evaluating our legal options. We remain committed to ensuring that Pennsylvanians with serious medical conditions have access to a high quality, efficient and scientifically based medical marijuana program.”

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