Suit alleges pay-to-play in Pa.’s marijuana research program
The filing by a group of current medical marijuana growers and dispensary operators says any research will be minimal and the state effectively gave up to its power to vet and choose research companies.
A new complaint in Commonwealth Court seeks again to stop the state's much-vaunted cannabis research program before it can get off the ground.
The filing Tuesday by a group of current medical marijuana growers and dispensary operators raises several concerns about appearances of pay-to-play and says the participants in the research program won't be required to do more than promise to conduct scientific studies.
Calling themselves "Medical Marijuana Advocates for Research," the current growers and operators — who say they collectively have spent hundreds of millions of dollars in application and startup costs — claim the research program won't deliver "high quality" scientific studies because the research requirements are weak.
The group's attorney, Judith Cassel of Harrisburg, said the individual plaintiffs did not want to be identified because they feared retribution from the state Department of Health, which regulates the marijuana program. Three of the plaintiffs, however, were named in the suit: Chamounix Ventures, which operates Keystone Dispensaries in the Philadelphia suburbs, Keystone Center for Integrative Wellness LLC a dispensary owner and its sister company Parea BioSciences LLC which holds a permit to grow.
The complaint names Secretary of Health, Rachel L. Levine, whose spokesman did not comment.
The research program allows each of the state's eight medical schools to form an exclusive alliance with a marijuana producer. The program is called Chapter 20 after the section of the law that created it.
The research program's opponents claim the state health department has unlawfully delegated authority to the medical schools to "secretly anoint" their own partners. The chosen partners do not have to go through the same rigorous scoring and selection process as commercial operators to win what is called a clinical research permit.
A similar case, filed by several of the same plaintiffs in the spring, had advanced to the state Supreme Court. But it was rendered moot when the health department rewrote several of the regulations governing the program. The most recent lawsuit says the new regulations do not "cure" either the delegation problem or the "minimal commitment to research."
Some in the industry expect the arrangements to be lucrative for both the medical schools and the growers.
The complaint said several of the contracted growing partners submitted "poor quality proposals" in their prior attempts to win permits. Most of the medical schools are pairing with companies that lost during the first two rounds of permitting.
Curaleaf, which Barron's magazine recently called an American company with deep Russian roots, was ranked 105 out of 177 applications during the first round, when 12 permits were awarded. It did not apply in the second. But last month, Curaleaf told prospective investors it planned to open six dispensaries in Pennsylvania and a 49,200-square-foot indoor growing facility in King of Prussia. The announcement — like many others made by marijuana concerns — was made before the state Department of Health had even received an application from the company. Curaleaf has partnered with the Perelman School of Medicine at the University of Pennsylvania.
MLH Explorations, which partnered with Thomas Jefferson University, failed to win a grower permit in Phase II. It placed 26th out of 71 scored applications in the latest round, when 13 permits were awarded. MLH is headed by Jefferson Health's former chair of its board of directors, William Landman.
Columbia Care Pennsylvania, which the suit said is paired with Pittsburgh's UPMC, was denied a permit in Phase I, as was Elemental Health Group, which is paired with the Pennsylvania State University.