A deal to create America’s largest marijuana-dispensary chain may be derailed as Pennsylvania regulators take a closer look at the company’s operations in the state.
Arizona-based Harvest Health and Recreation of Arizona, which has cannabis operations in multiple states, announced last week that it was acquiring CannaPharmacy Inc., a company with presence in Pennsylvania, New Jersey, and neighboring states.
On Friday, Pennsylvania Department of Health officials demanded “all records, documents, and correspondence” between Harvest, its Pennsylvania subsidiaries, and CannaPharmacy to determine if the companies misrepresented themselves to win permits to grow and sell medical marijuana.
The investigation comes at a time when several states, including Maryland and Massachusetts, are trying to ensure big out-of-state corporations do not dominate the nascent market, potentially shutting out locally owned businesses. In the first year of its medical program, Pennsylvania dispensaries recorded sales of about $130 million in 2018.