Medical Marijuana Laws and Local Governments

1. Medical Marijuana Laws and Their Impact on Local Governments • March 16, 2017 AMSS Meeting • Alan T. Shuckrow • Gretchen E. Moore • Matt N. Korenoski • John C. Scialabba Your Goals |Our Priority 412.281.5423 | smgglaw.com

2. Locally Unpopular (or Popular) Land Use? • Some communities see medical marijuana legalization as a benefit, and crave the opportunity because of the positive economic impact. • Braddock Borough • Others, however, are more hesitant to embrace it. • Frazer Township 2

3. Background of the Medical Marijuana Act • On April 17, 2016, Pennsylvania enacted the Medical Marijuana Act (the “Act”). • Legalized use of certain forms of marijuana for medicinal purposes relating to treatment of certain diseases and conditions. • The Act provides how and where Grower/Processors and Dispensaries of medical marijuana may operate within the Commonwealth. 3

4. The Act’s Terminology Grower/Processor: A person, including a natural person, corporation, partnership, association, trust or other entity, or any combination thereof, which holds a permit from the department under this act to grow and process medical marijuana. The term does not include a health care medical marijuana organization under Chapter 19. 35 Pa. Stat. Ann. § 10231.103. Dispensary: A person, including a natural person, corporation, partnership, association, trust or other entity, or any combination thereof, which holds a permit issued by the department to dispense medical marijuana. The term does not include a health care medical marijuana organization under Chapter 19.4. 35 Pa. Stat. Ann. § 10231.103. 4

5. Zoning for Growers/Processors • A Grower/Processor shall meet the same municipal zoning and land use requirements as other manufacturing, processing and production facilities that are located in the same zoning district.” 35 Pa. Stat. Ann. § 10231.2107 (emphasis added). • A Grower/Processor may only grow, store, harvest or process medical marijuana in an indoor, enclosed, secure facility which: • (i) includes electronic locking systems, electronic surveillance and other features required by the department; and • (ii) is located within this Commonwealth. Id. at § 10231.702. 5

6. Zoning for Dispensaries • A Dispensary shall meet the same municipal zoning and land use requirements asother commercial facilities that are located in the same zoning district. Id. at 10231.2107 (emphasis added). • A dispensary is subject to the following restrictions: • (1) A dispensary may only dispense medical marijuana in an indoor, enclosed, secure facility located within this Commonwealth, as determined by the department. • (2) A dispensary may not operate on the same site as a facility used for growing and processing medical marijuana. • (3) A dispensary may not be located within 1,000 feet of the property line of a public, private or parochial school or a day-care center. • (4) A dispensary may sell medical devices and instruments which are needed to administer medical marijuana under this act. • (5) A dispensary may sell services approved by the department related to the use of medical marijuana. Id. at § 10231.802 (emphasis added). 6

7. Various Municipal Approaches • Township of Findlay Ordinance No. 409 • Amends Zoning Code to address development and operation of growers/processors and dispensaries. • Ross Township – Pending Ordinance • Would allow dispensaries in the township’s C1 Regional Commercial District, which includes the McKnight Road corridor, portions of Nelson Run Road, and Perry Highway, and several other locations. • Would allow growers/processors in I1 General Commercial/Light Industrial Sector. • Aston Township – Amended Ordinance • Allows growers/processors in limited industrial districts. • Frazer Township – Amended Ordinance • Growers/processors and dispensaries only permitted in industrial zone. • Collier Township – Amended Ordinance • Allows Highway Commercial District to allow for medical marijuana dispensaries and growers/processors on Campbells Run Road. Presentation Title Here7

8. Applying for a Permit • Dispensary applications and grower/processor applications went live onJanuary 17, 2017. • Applications are currently being accepted until March 20, 2017. • Only up to 2 dispensary permits will be distributed in Allegheny County • Only 2 grower/processor permits will be granted to the Southwest Region of Pennsylvania. • Estimated that over 900 applicants are vying for these permits. 8

9. Medical Marijuana Dispensary and Grower/Processor Applications 9

10. Allocation of Initial Dispensary Permits in Pennsylvania Medical Marijuana Region 4—The Northcentral District Counties Number of Permits—2 • Centre 1 • Lycoming 1 Medical Marijuana Region 5—The Southwest District Counties Number of Permits—5 • Allegheny 2 • Butler 1 • Washington 1 • Westmoreland 1 Medical Marijuana Region 6—The Northwest District Counties Number of Permits—2 • Erie 1 • McKean 1 10 Medical Marijuana Region 1—The Southeast District Counties Number of Permits—10 • Berks 1 • Bucks 1 • Chester 1 • Delaware 1 • Lancaster 1 • Montgomery 2 • Philadelphia 3 Medical Marijuana Region 2—The Northeast District CountiesNumber of Permits—4 • Lackawanna 1 • Lehigh 1 • Luzerne 1 • Northampton 1 Medical Marijuana Region 3—The Southcentral District Counties Number of Permits—4 • Blair 1 • Cumberland 1 • Dauphin 1 • York 1

11. Capital Requirements - Dispensaries • An applicant for a dispensary permit shall provide an affidavit that the applicant has at least $150,000 on deposit with one or more financial institutions. • (1) Initial permit application fee—$5,000. The initial permit application fee shall be submitted with the initial permit application and is nonrefundable, except as otherwise provided in this part. • (2) Initial permit fee—$30,000 for each dispensary location. The initial permit fee shall be submitted with the initial permit application and will be refunded if the initial permit is not granted. • Note that a dispensary permit may be used to provide medical marijuana at no more than three separate locations as approved by the Department. (§ 1141.23) 11

12. Capital Requirements – Growers/ Processors • An applicant for a grower/processor permit shall provide an affidavit that the applicant has at least $2,000,000 in capital and $500,000 on deposit with one or more financial institutions. • (1) Initial permit application fee—$10,000. The initial permit application fee shall be submitted with the initial permit application and is nonrefundable, except as otherwise provided in this part. • (2) Initial permit fee—$200,000 for each grower/processor location. The initial permit fee shall be submitted with the initial permit application and will be refunded if the initial permit is not granted. 12

13. Doctor/Pharmacist Requirement (Dispensaries Only) • Facility will need either a doctor or pharmacist working during all hours the dispensary is distributing medical marijuana • Department of Health will provide training needed once permit is issued • If a dispensary is authorized to operate more than one facility, a physician assistant or a certified registered nurse practitioner may be present onsite at each of the other locations instead of a physician or pharmacist. (§1161.25) 13

14. Background Checks An applicant shall submit fingerprints of its principals, financial backers, operators, and employees to the Pennsylvania State Police. The Pennsylvania State Police or its authorized agent shall submit the fingerprints to the Federal Bureau of Investigation for the purpose of verifying the identity of the individuals whose fingerprints have been submitted and obtaining a current record of criminal arrests and convictions. The Pennsylvania State Police will provide the results of the record checks to the Department. 14

15. Diversity Plan Each medical marijuana organization shall include in its permit application a diversity planthat establishes a goal of equal opportunity and access in employment and contracting by the medical marijuana organization. The Department will determine whether the stated goals in the diversity plan are reasonable and represent a good faith effort to meet the diversity goals of Section 615(a) of the act. 15

16. Security Requirements • A dispensary must have security systems that utilize commercial-grade equipment to prevent unauthorized entry and to prevent and detect an adverse loss. The security and surveillance systems must include a professionally monitored security alarm system that includes: • Coverage of all facility entrances and exits; rooms with exterior windows, exterior walls, roof hatches or skylights; storage rooms, including those that contain medical marijuana and safes; and the perimeter of the facility; • A silent alarm system signal, known as a duress alarm, generated by the entry of a designated code into an arming station in order to signal that the alarm user is being forced to turn off the system. 16

17. Security Requirements (Continued) • An audible security alarm signal, known as a panic alarm, generated by the manual activation of a device intended to a signal a life-threatening or emergency situation requiring law enforcement response; • A silent alarm signal, known as a holdup alarm, generated by the annual activation of a device intended to signal a robbery in progress; • An electrical, electronic, mechanical or other device capable of being programmed to end a prerecorded voice message requesting dispatch, when activated, over a telephone line, radio or other communication system to law enforcement, public safety or emergency services agency; 17

18. Security Requirements (Continued) • A failure notification system that provides an audible, text or visual notification of any failure in the systems. The failure notification system must provide by telephone, email, or text message an alert to a designed security person within 5 minutes after the failure; • Smoke and fire alarms; and • Auxiliary power sufficient to maintain security and surveillance systems for at least 48 hours following the power outage. 18

19. Other Considerations Extensive medical marijuana transportation requirements Extensive medical marijuana inventory and record-keeping requirements Extensive labeling requirements and limitations (growers/processors only) Employee training requirements Sanitation requirements Laboratory regulations (growers/processors only) Banking and insurance issues 19

20. Ethical Considerations The Pennsylvania Supreme Court has opened up counseling opportunity for lawyers regarding Medical Marijuana Practices. On October 26, 2016, the Pennsylvania Supreme Court amended Rule 1.2 of the Pennsylvania Rules of Professional Conduct to include a new paragraph (e), which provides:  “[a] lawyer may counsel or assist a client regarding conduct expressly permitted by Pennsylvania law, provided that the lawyer counsels the client about the legal consequences, under other applicable law, of the client’s proposed course of conduct.” 20

21. For Further Reading Medical Marijuana Act, Act of Apr. 17, 2016, P.L. 84, No. 16 Township of Findlay Ordinance No. 409 http://www.post-gazette.com/news/health/2016/04/24/Despite-law-medical-marijuana-may-see-local-challenge-in-Pennsylvania/stories/201604220171 http://www.post-gazette.com/business/healthcare-business/2017/03/14/Braddock-Mayor-John-Fetterman-former-Steeler-Franco-Harris-to-make-push-for-medical-marijuana-cultivation-site/stories/201703140181 http://www.post-gazette.com/local/north/2017/02/24/Ross-prepares-for-medical-marijuana-business/stories/201702240038 http://triblive.com/local/northhills/11974491-74/marijuana-ross-dispensaries http://philadelphia.cbslocal.com/2017/02/10/aston-township-medical-marijuana/ https://www.google.com/search?q=frazer+defends+zoning+for+pot&ie=utf-8&oe=utf-8 http://triblive.com/local/allegheny/11796740-74/medical-marijuana-application http://www.post-gazette.com/local/region/2017/02/17/Allegheny-County-communities-prepare-for-cannabis-cultivation-marijuana/stories/201702170005 21