Week in Review: Medical marijuana in Pennsylvania, OSHA fines + obstacles in two states

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By John Schroyer and Omar Sacirbey

Pennsylvania moves closer to legalizing medical cannabis, a New Mexico MMJ business gets hit with a five-figure fine, and crackdowns in two states highlight the dangers of operating in unregulated markets.

Here’s a closer look at several notable developments in the marijuana industry over the past week.

MMJ in PA?

A medical marijuana legalization bill in Pennsylvania took a major step forward this week when lawmakers in the state House voted in favor of the measure.

Cannabis entrepreneurs should pay close attention, as Pennsylvania could become the next hot MMJ market.

The bill now returns to the state Senate, where a similar version passed 40-7. If approved as is, the measure will go straight to the desk of Gov. Tom Wolf, who just a few days ago urged legislators to approve the bill.

But this isn’t a lock.

If even a single amendment is added, the bill will return to the House for a review and a vote, potentially setting off a game of legislative ping-pong.

Despite the temptation to amend, senators understand that the clock is ticking on this legislative session.

Sending the bill back to the House with amendments may pose too much risk for delay, said Lt. Gov. Mike Stack, a medical cannabis supporter who was a state senator until he took his current job about two years ago.

“It’s time-sensitive, and it should be passed as soon as possible,” Stack said, adding that there’s a good change the House version will pass.

He added that Gov. Wolf is “anxious” to sign it.

If Wolf signs the bill, Stack and Sen. Mike Folmer, lead sponsor of the bill, will meet next week with Health Secretary Karen Murphy to discuss how to implement the new law.

Keep your fingers crossed.

The OSHA hammer

An explosion at an MMJ company in New Mexico that injured two workers last summer has drawn the attention of a federal agency.

New MexiCann Natural Medicine was fined $13,500 by the U.S. Occupational Safety and Health Administration (OSHA) as a result of the explosion.

Jolene Donahue of Colorado-based The OSHA Connection, which helps businesses avoid issues with the agency, said she was “shocked” at how low the fines actually were after she reviewed the case.

“Even with this being a first offense, OSHA could have fined much more seriously and I believe they should have,” Donahue said in an email. “They are, however, actually going to be increasing their fines – almost double what they were.”

Donahue said OSHA has already announced a significant increase in the level of fines, from a cap of $7,000 per violation per employee to between $12,000 and $13,000.

And repeat or willful violations, she said, are going to go up from a limit of $70,000 to $120,000. The increases will go into effect Aug. 1, Donahue said.

Still, OSHA won’t be doing random inspections until cannabis is federally legal, she said. Currently, OSHA only steps in due to an employee complaint or a specific incident, such as the New Mexico explosion.

But  New MexiCann will be under the microscope from the federal agency in the future, Donahue noted.

“Once the door is open, then they can come in and re-inspect,” Donahue said. “Because they will have to fix whatever went wrong. So OSHA will come back and take a look to see if they have.”

It ain’t over ’til it’s over

As the cannabis industry grows and becomes more mainstream, it can be easy to forget that a lot of businesses are still operating outside of the law.

But that fact has been brought back into the spotlight in recent days in both Michigan and California, where scores of companies are on the brink of being forced out of business by law enforcement.

In Michigan, which is one of the last remaining states with a medical marijuana industry that’s not overseen by any state regulatory agency, raids on dispensaries have been a way of life for years.

But in the last two weeks, at least 16 dispensaries in the state have been raided.

In the Los Angeles metro area, meanwhile, MMJ companies face resistance as well.

Not only has the city attorney of L.A. made it a personal mission to close down unlicensed dispensaries, but county supervisors recently expanded that mission to include unincorporated parts of the county.

On top of that, a recent appeals court ruling found that the proliferating MMJ delivery services in the L.A. area are basically all illegal – even though the ruling only applies directly to one company, Nestdrop. What that means, however, is that it’s open season on all MMJ delivery businesses for the city attorney’s office.

What those in the industry can and should take from these recent setbacks is a reminder that there’s still a war going on. And it won’t be over until cannabis is made federally legal.

John Schroyer can be reached at johns@mjbizdaily.com

Omar Sacirbey can be reached at omars@mjbizdaily.com