With the Commonwealth recently issuing more licenses to medical marijuana dispensaries and grower-processors, multi-state operators have won out over their smaller, local rivals. Most of the Pennsylvania-based dispensaries that applied for the 23 licenses during phase two were shutout. Of those granted licenses, 18 went to companies that operate in multiple states.
Pennsylvania efforts to grow its medical marijuana business via the granting of more licenses has been steeped in controversy. The process to receive the licenses and the fact many went to multi- state operators has raised the ire of local players. They argue they aren’t getting a fair shake and the bigger companies will end up dominating the marketplace.
Harvest Health runs into trouble with CannaPharmacy Buy
It didn’t help that Harvest Health & Recreation, a Phoenix, Arizona, marijuana company, plans to expand further in Pennsylvania by acquiring CannaPharmacy. In April, it announced a deal to acquire the Aventura, Florida-based marijuana company, which owns or operates — through management companies — cannabis licenses in Pennsylvania, Delaware, New Jersey and Maryland.
With this deal, Harvest Health gets access to a 46,800-square-foot cultivation and processing facility in the Commonwealth and will be able to open up to 21 retail stores throughout Pennsylvania. If Harvest does so, it would run afoul of the cap the state put on the number of medical marijuana retail locations one company can operate. The cap stands at 15, and its purpose is to provide smaller cannabis companies with opportunities. The idea, at least on paper, is to prevent large companies from dominating the marketplace.
In an unusual move, the Department of Health in Pennsylvania issued a letter to Harvest Health calling its commentary in the CannaPharmacy press release a “blatant misrepresentation” of its position in the state. The Department of Health said units of the company were granted licenses during both phases, and they are required to operate independently of each other.