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Cannabis / Legal / Municipal government / Venture capital

A medical cannabis firm in Pittsburgh just raised $18M. What’s the state of Pennsylvania’s weed laws?

With federal and state laws contradicting each other, are local dispensaries still walking a fine line? We asked a lawyer for the latest.

Some green leaf. (Photo by Flickr user momento mori)
Aside from parks, bridges and sandwich shops, another thing Pittsburgh has more of than you might think? Cannabis dispensaries.

You might remember that in 2016, Gov. Tom Wolf signed the Medical Marijuana Act legalizing the sale of cannabis to physician-approved Pennsylvanians with certain medical conditions, and in 2018 medical cannabis became available for patients at dispensaries across the Commonwealth.

Now, the Steel City has around 20 dispensaries that a person with a medical card can choose from. Philadelphia has a comparable number.

Venture capital, too, is backing Pittsburgh’s cannabis industry: Although they didn’t respond to Technical.ly’s request for comment earlier this week, a SEC filing shows that East Liberty-based medical cannabis firm Maitri Holdings recently raised $18 million in outside investments.

As a patient to have access, you need to register through the Pennsylvania Medical Marijuana Registry, have a qualifying diagnosed condition, pay for a medical ID card, and only purchase from approved dispensaries. Dispensaries have to undergo application processes and require licenses, and they are subject to state inspections and license renewal processes, as well as some limitations about where they can be located.

Still, although medical cannabis is legal in the Commonwealth — and in this week’s election, two other states voted through referendums to legalize recreational cannabis — federal laws related to cannabis haven’t changed, and marijuana remains a Schedule I drug under the Controlled Substances Act.

So, what does that mean for dispensary owners and the people who purchase from them? Mike Sampson, a partner at Leech Tishman and an adjunct law professor at the University of Pittsburgh, told Technical.ly that it’s complicated. While he describes the industry itself as being well-regulated, Sampson noted that state laws being in conflict with federal laws can sometimes cast a looming shadow over the industry.

When will recreational cannabis use be legal in the state? Sampson feels it’s not a question of if, but when that happens.

“This is a very heavily regulated industry,” Sampson said. “The bottom line is that marijuana remains illegal under federal law. It is still illegal to manufacture, distribute, dispense cream, and possess marijuana because marijuana is a controlled, Schedule I substance and therefore, there is always a risk.”

The good news for those in the industry, Sampson said, is that currently the Department of Justice isn’t devoting resources to heavily enforcing this area of federal law. Still, the risk remains, and there are other areas of a person’s life where issues could arise.

“It may have adverse employment consequences,” Sampson said. “There may be issues about usage on property [or] uses [at]  your work and whether or not the use of cannabis qualifies as a disability, or whether it’s a proxy for disability, and whether somebody can be terminated based on their use of cannabis or whether or not that qualifies as disability discrimination.”

(Note, too: Yes, a drug policy from the ’80s is still a requirement for federal contractors. Under the Drug-Free Workplace Act of 1988, a drug-free workplace policy is required for any organization that receives a federal contract of $100,000 or more. It’s also required for any organization receiving a federal grant.)

Sampson added that even medical cannabis use or working in the industry could create challenges for those in the immigration system. If a person needs to maintain a green card or other forms of a visa, Sampson noted there had been examples in the past where individuals had faced deportation.

Currently in Harrisburg, there are lawmakers — Senator-Elect John Fetterman having at one point been one of them — pushing toward a day when recreational cannabis use is legal in the state. Sampson feels it’s not a question of if, but when that happens. Should the state laws change, for medical cannabis dispensaries, there would likely be an impact on demand, but Sampson said dispensaries could also look forward to additional regulations.

“Exactly how it will play out remains to be seen,” he said. “But there’s a number of steps that would have to occur before we’d have a good sense of what the recreational market would look like.”

Sampson felt that it was important to note that despite the perception of the industry some people have as enabling a vice, dispensaries are “clean” and try to be good business owners and neighbors. Still, it is important to remember that while federal and state laws are in conflict, the medical cannabis industry must be navigated very carefully.

“The big issue out there is that cannabis is still illegal under federal law, and that nothing in state law can change that,” Sampson said. “Therefore, because there’s a dichotomy between federal and state law, there are very few clean and clear answers. And there is no way to eliminate all risk of working in or purchasing cannabis in the Commonwealth or in any state.”

Atiya Irvin-Mitchell is a 2022-2024 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Heinz Endowments.
Companies: State of Pennsylvania

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