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Temple U. marijuana deal makes U.S. Rep. Bob Brady fume

Philadelphia was shut out in June when 12 permits were awarded to cultivate cannabis in Pennsylvania. Now, the congressman, arguably the region's most powerful politician, is demanding to know why medical marijuana won't be grown on his home turf.

A building on the at Temple University’s campus in North Philadelphia.
A building on the at Temple University’s campus in North Philadelphia.Read moreAP Photo/Matt Rourke

Bob Brady is peeved about weed.

Philadelphia was shut out in June when 12 permits were awarded to cultivate cannabis in Pennsylvania. Now, the Democratic congressman, arguably the region's most powerful politician, is demanding to know why medical marijuana won't be grown on his home turf.

Brady specifically wants an explanation why a property in one of the city's most distressed neighborhoods wasn't considered for a marijuana site. That property, at Second Street and Erie Avenue in North Philadelphia, happens to be controlled by a group of investors represented by Brady's longtime spokesman and aide, Ken Smukler.

"It's a $15 million to $20 million investment with jobs, 40 to 50 jobs, in a blighted area, a minority area, where it's desperately needed," Brady said in an interview. Instead, the grow appears to be headed to Lancaster County.

Smukler, a political operative who is currently under federal indictment on conspiracy charges, represents a group that holds an option on the former distribution warehouse that sits on a 14-acre parcel. Part of a group of investors that includes Chicago-based Illinois Grown Medicine and former Philadelphia mayoral candidate Ken Trujillo, Smukler is unapologetic about his stake.

"The fact I might be able to benefit is no different from any other developer with political support trying to do good for the community," he said, adding that his company, 1776 Ventures, would have donated $1 million a year to a local nonprofit. "I'm not ashamed of it. More people should be doing this."

The kerfuffle is shedding light on one of the more obscure, and potentially lucrative, parts of the commonwealth's medical marijuana program. Under Pennsylvania's law, in addition to the dozen commercial marijuana growers, the state's eight university health systems can partner with aspiring cannabis cultivators. The health systems will not handle any part of the marijuana plants or its derivatives, but they will lend their names to the partnerships and ostensibly conduct research into the benefits of the drug.

The program is referred to as "Chapter 20," after a portion of the law signed last year by Gov. Wolf. The state has yet to publish regulations governing the provision. Health Department spokeswoman April Hutcheson said it was premature to discuss business winners and losers until those rules are released.

"Our primary focus right now is getting the program up and running and getting medicine to sick patients," Hutcheson said.

Temple University is one of four health systems in the city that stand to benefit from Chapter 20. Jefferson, Drexel, and the University of Pennsylvania also may enter into noncompetitive arrangements with growers. Most are rumored to have struck deals with out-of-state cannabis-industry powerhouses.

Temple has paired up with Laurel Harvest Labs. The company is headed by Nick Karalis, CEO and president of Delaware County-based Elwyn Specialty Pharmacy Group.

Laurel Harvest Labs sought approval earlier this month from the town of Mount Joy in Lancaster County to build on what is now a cornfield a facility "for the manufacturing and processing of pharmaceuticals and medicines." A decision by the Mount Joy Planning Commission is pending, according to Borough Manager Samuel Sulkosky.

Brady and other politicians want the Laurel Harvest Labs facility in Philadelphia. Brady bristles at the idea of Temple's partner growing marijuana outside the city. He's angry the university did not open the process to a competitive bid or even listen to a pitch for the neighborhood option.

Calling the rejection of a North Philadelphia site "insufficient, indefensible and insulting," Brady — along with State Sen. Sharif Street and Councilwoman Maria Quiñones-Sanchez — fired off a letter to the chairman of Temple's board of trustees on Nov. 22. They insisted that the university explain itself and reconsider its decision.

In the letter, the three said they were told the decision was not made by the university's health system but "at the institutional level" because the former warehouse was "too close to a school." The trio say they didn't buy the explanation. Though state law requires dispensaries to be set back 1,000 feet from a school, neither the state nor the Philadelphia zoning code requires any setback for a marijuana growing facility.

The chairman of Temple's board of trustees, Patrick J. O'Connor, did not respond to requests for comment. O'Connor is the cofounder and former president of Cozen O'Connor, one of the city's most powerful law firms. Cozen O'Connor attorney Mark Alderman represents Temple's grower, Laurel Harvest Labs.

"I can't get an answer from them," Brady said in an interview. "You talk about casinos being wired up, this is totally wired up."

Alderman declined to comment for this article. Temple's president, Richard Englert, also declined comment.

Street said he, too, was mystified how Temple decided to work with Laurel Harvest Labs. "As a state senator representing most of the institution's footprint, I don't have any information," he said in an interview.

Brady said he personally was disappointed by Temple and warned of future legal action.

"They took out the Northeastern Hospital and promised to give something back for community development," he said. "They've come to me whenever they needed a fix. They're turning their backs on the city and turning down $20 million in revenues.

"Unfortunately," Brady said, "this might be for the courts to figure out."