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Big Marijuana tightens grip, receives most new Pa. dispensary permits

Pennsylvania awarded 23 permits to cannabis companies to dispense medical marijuana in the state. Each permit allows the operation of three retail dispensaries.

Marijuana plants in the flowering stage.
Marijuana plants in the flowering stage.Read moreTIM TAI / Staff Photographer

Big Marijuana is about to become much, much bigger in the state of Pennsylvania.

On Tuesday, the state Department of Health doubled the number of marijuana dispensaries that will be allowed to set up shop in Pennsylvania, awarding 23 new permits to cannabis companies. Each permit will allow a company to operate three retail storefronts. The latest batch of licensing brings the total number of permits to 50. When all the commercial dispensaries are open, 150 marijuana outlets will dot the state.

The latest phase consolidates the hold some of America’s mightiest cannabis companies have on the state.

PharmaCann, which was recently acquired by MedMen (the so-called Tiffany’s of Cannabis) in a blockbuster $682 million deal, added two permits, bringing its total number of retail outlets in the state to nine.

Green Thumb Industries, the Chicago-based cultivator with an expanding national footprint, won four permits during this round. The mammoth chain will add 12 dispensaries to the four it already operates across the Keystone State, said Ben Kovler, GTI’s founder and CEO. The first of its Southeastern Pennsylvania shops, branded Rise Dispensaries, will open in about six months in Chadds Ford, he said.

(On Monday, GTI scored another major win in New Jersey with a permit to build a marijuana growing and dispensary operation in Paterson, Passaic County. It already operates a grow in Danville in central Pennsylvania.)

Kovler said the secret to his company’s success wasn’t a secret at all.

“We do what we say we’re going to do,” Kovler said. “We read the rules, we roll up our sleeves, and do the work. There’s not anything that’s hard to plan for, but it can be very hard to execute.”

The big winner in Pennsylvania’s weed sweepstakes Tuesday was Harvest. The Arizona-based company was awarded six permits. When its three existing Pennsylvania dispensaries are figured in, Harvest will have a grand total of 21 retail marijuana stores scattered across the commonwealth, making it the state’s biggest marijuana dealer.

“Our success, it’s very simple, it lives with our in-house application team. We’ve listened to the community, regulators, and policymakers,” said Ben Kimbro, Harvest’s director of public and strategic affairs.

According to state law, a company can have a maximum of 15 retail cannabis outlets. Harvest cleverly skirted that maximum number by incorporating each of its six permit applicants as separate businesses. Though the corporate personnel, the corporate headquarters, and corporate email addresses are all the same, “each is recognized as a separate entity by the Department of State," said a Health Department spokesperson. “Permits are awarded to entities, not people.”

The creation of the new cannabis powers irked some of the state’s most vocal medical-marijuana attorneys and dispensary owners.

“One of the biggest mistakes the government committed was not making permittees have to reside in Pennsylvania,” said Andrew Sacks, cochair of the Pennsylvania Bar Association’s Committee on Medical Marijuana and Hemp. “Now Phase II has the same cast of characters as Phase I. Most that won are big companies from out of state. It is a crying shame that the Department of Health could not let more mom-and-pops from Pennsylvania open a dispensary.”

Some companies do have local ties.

Beyond / Hello, which already operates a single dispensary in Bristol, in Bucks County, won the right to open nine more storefronts, most notably on the 400 block of N. Fifth Street in Philadelphia.

The parent company, the Franklin Group, is based in Colorado and runs marijuana grow houses in that state and Nevada, but the Franklin Group’s president of Pennsylvania operations, Blythe Huestis, lives in the Philadelphia suburbs. The company’s Pennsylvania subsidiary also has Robert N.C. Nix III, the prominent attorney and grandson of the first African American to represent Pennsylvania in Congress, serving as Beyond / Hello’s director of diversity and inclusion.

The chain plans to open Center City’s first cannabis retailer in mid-January. “Right now, we’re all focused on the Center City location,” said Huestis in an interview Tuesday. The company is planning its first annual “Go Beyond” conference before the grand opening of its 12th and Sansom Street store Jan. 17. Speakers set to appear include former Philadelphia Flyers enforcer Riley Cote and cartoonist and best-selling author Box Brown. The event will be free and open to the public, Huestis said. “We’re extremely excited about that spot.”

There were other local operators that weren’t as fortunate.

Chris Visco, owner of TerraVida Holistic Centers in Abington, Malvern, and Sellersville, said she submitted five applications during the latest round in hopes of winning just one more. Each was rejected as “incomplete” by the Department of Health.

“I don’t know what to say other than big business wins again,” said Visco, who currently sells more medical marijuana than any other legal retailer in Pennsylvania. “The companies that were awarded licenses are nearly all multistate outfits that are gouging patients on price. I don’t know why my applications weren’t scored."

Judith Cassel, a Harrisburg attorney who represents many of Pennsylvania’s current growers and dispensaries, said she offered her congratulations to the new winners but added, “There’s definitely going to be some legal appeals.”

Among the Pennsylvania-owned companies that won a permit was MLH Explorations, which is closely aligned with Thomas Jefferson University.

MLH Explorations plans to open its first dispensary under the Solterra brand at Eighth and Locust Streets near TJU’s campus in Center City. The company remains in the running for an additional research permit. If it wins the research license, MLH will be granted a permit to grow and six additional dispensaries. MLH Explorations is headed by CEO William “Billy” Landman, a former chairman of TJU’s Board of Trustees. Another MLH officer is Jeff Cook, who is the chief financial officer of Pepsi National Brands, the region’s largest bottler. The Honickman family, which runs that bottling company, also is affiliated with MLH. The alliances seem to point to an interest in the cannabis space by the local titans of Big Soda.

Other small Pennsylvania-based cannabis concerns that won permits included Agape Total Health Care of Macungie and Restore Integrative Wellness Center of Elkins Park.