Week in Review: Medical marijuana research, Louisiana lawsuit & Ohio’s extra MMJ license

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(This story has been updated from an earlier version.)

Pennsylvania approves eight universities to conduct medical marijuana research, a company spurned for a Louisiana license sues the state, and Ohio awards an additional MMJ permit.

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

Pennsylvania takes research reins

Pennsylvania’s decision to allow eight colleges to research medical marijuana in light of the sector’s federal illegality is “brilliant,” said one industry observer.

Cannabis businesses stand to benefit from the kind of credible scientific analysis universities can potentially provide around the medical uses of marijuana. But academia has often hesitated to develop such programs for fear of jeopardizing their federal funding.

“Research is pretty much impossible to do in the United States,” said Jay Czarkowski, a cannabis consultant with clients in the Keystone State. “But the state of Pennsylvania did a brilliant thing.

“They took it to the next step, and they’re actually issuing licenses to do meaningful research. Good for them.”

Each college would work with one cannabis company that has a “super license,” which includes one grow site and six dispensary storefronts.

According to Czarkowski, the colleges have said “we know this is the right thing to do … We’re going to make it happen.”

He also pointed out that states across the country have been issuing cannabis licenses for years and nothing has happened to them in terms of federal action.

So that’s perhaps a factor in easing some universities’ qualms about conducting medical marijuana studies.

“Research is absolutely critical,” Czarkowski stressed. “It’s going to further the development and mainstream acceptance of this plant as a viable alternative to the dangerous pharmaceuticals out there.”

Louisiana licensing lawsuit

Louisiana could remain on track to launch medical marijuana sales by the end of the year, despite a lawsuit stemming from a licensing dispute.

Kevin Caldwell, president of Common Sense NOLA and a board member for the Sensible Marijuana Policy for Louisiana, said RX Greenhouse’s lawsuit against the Louisiana Board of Pharmacy shouldn’t come as a surprise.

“It’s expected any time you’re dealing with a contract with a state – winners are going to be happy and the people not chosen aren’t going to be happy,” Caldwell said.

RX Greenhouse, which had been ranked No. 1 by a review committee, alleged that the state pharmacy board acted in an “arbitrary and capricious” way by awarding H&W Drug Store a license for the New Orleans metro area.

The company requested an expedited hearing, so the issue could be resolved fairly quickly unless the state is ordered to redo the process.

In all, licenses have been awarded to nine dispensaries statewide, and product is expected to be available by the end of the year.

Caldwell said he’s comfortable with the decision to award the contested license to a 50-year-old African American-owned business with “deep-seated relationships” to the city rather than to RX Greenhouse, whose owners live in Maryland.

In fact, Caldwell recommended that RX Greenhouse focus instead on the future: Louisiana will be awarding a 10th license next year to the area of the state showing the highest demand.

The restrictive nature of Louisiana’s MMJ program has Caldwell and others concerned about its viability.

To that end, lawmakers gave final passage this week to bills expanding patient conditions to cover glaucoma, severe muscle spasms, intractable pain, post-traumatic stress disorder, Parkinson’s and autism spectrum disorder.

But the governor hasn’t said whether he’ll sign the legislation.

Ohio growth spurt

Ohio’s relatively small medical cannabis program is showing signs of growth before it even gets underway.

The state originally planned to allow just 24 licensed cultivators – and up to 60 dispensary permits – but the count’s up to 25 growers with a victory by PharmaCann Ohio.

The company was awarded an extra license under an administrative decision by the Ohio Department of Commerce.

The agency gave itself wide latitude in the industry rulemaking process to issue additional business permits as it sees fit, said Thomas Rosenberger, the executive director of the National Cannabis Industry Association of Ohio.

“They also gave themselves some room to award additional licenses down the road if it becomes necessary,” he noted.

Rosenberger added that he doesn’t really expect regulators to continue issuing more licenses just because of PharmaCann’s win, in part because the company had scored high enough to warrant a permit during the initial round of licensing applications.

But what could happen sooner than later is the state may allow growers to expand capacity – up to three times the square footage for cultivation that each company is currently allowed, Rosenberger predicted.

“They’ve allowed for all of the licensees to expand a couple times,” he said. “So, once the market gets to a point where you have a population that those 25 can’t service at those current levels, they can apply to expand.

“They built a lot of flexibility into it, to allow the amount of product being produced to grow with the program.”

Bart Schaneman can be reached at barts@mjbizdaily.com

Jeff Smith can be reached at jeffs@mjbizdaily.com

John Schroyer can be reached at johns@mjbizdaily.com