Commonwealth Court judge halts implementation of Pennsylvania Medical Marijuana Research Program

On Wednesday, May 22, 2018, implementation of Pennsylvania’s unique medical marijuana research program was stopped as a result of the issuance of a preliminary injunction issued by a single judge on Pennsylvania Commonwealth Court.  The medical research program, known as Chapter 20 of the Medical Marijuana Act (the “Act”), was designed to expand patient access to pharmaceutical-grade medical cannabis and greatly enhance the Commonwealth’s nascent medical marijuana industry by allowing medical marijuana organizations to partner with medical schools to research the use of cannabis to treat serious medical conditions. 

Chapter 20 creates two types of new entities: academic clinical research centers, or ACRCs, and clinical registrants, or CRs. An ACRC is defined as an accredited medical school within the Commonwealth that operates or partners with a licensed acute care hospital. Presently, there are nine Pennsylvania medical schools that fit this definition. CRs, on the other hand, are entities that hold a permit as both a grower/processor and a dispensary; and, have a contractual relationship with an ACRC to obtain advice regarding patient health and safety and the management of controlled substances as well as to jointly undertake research studies on medical marijuana.

Through these collaborations, medical marijuana organizations would be able to work directly with the Commonwealth’s leading medical institutions to study specific cannabis formulations and develop products to treat Pennsylvania patients. The CRs would grow, process and dispense these science-based products to eligible medical marijuana patients so that observational studies could monitor and test their efficacy. The new program is unique to Pennsylvania and represents a significant step forward that could make the Commonwealth a national research hub for medical cannabis.

In a 49-page opinion, Judge Patricia McCullough granted Petitioners’ request for a preliminary injunction to halt implementation of Chapter 20. The suit was filed by a group of existing medical marijuana permittees (grower/processors and dispensaries), including Cresco Yeltrah, LLC and GTI Pennsylvania, LLC, who argued that implementation of the research program would devalue their existing permits and dilute their share of the Commonwealth’s emerging medical marijuana market. Judge McCullough decision came just days before the Department was set to publish applications for Chapter 20, CR permittees.  Last week, Gov. Tom Wolf certified eight medical schools as ACRCs, who are now approved to enter research contracts with their CR partners.

In short, Judge McCullough found Petitioners were likely to prevail on their claim that Chapter 20 regulations violate the Medical Marijuana Act. The Court specifically found the legislative intent of Chapter 20 was to permit distribution of medical marijuana to ACRCs and not to sanction commercial distribution of medical marijuana beyond what is permitted under Chapter 6 – the chapter under which Petitioners received permits to grow and dispense medical marijuana.  The Court also found that Petitioners demonstrated immediate, irreparable harm in the form of loss of business value and erosion of their market share; and the granting of the preliminary injunction preventing implementation of Chapter 20 regulations would restore the status quo until the underlying uses are resolved.  Finally, Judge McCullough ruled that a preliminary injunction would not be contrary to the public interest because, if the regulations are in violation of the Act or the PA Constitution, their application is per se injurious to the public.

Interestingly, the Court performed no analysis of the potential harm to the public by halting the medical research program, which requires CRs to show $15 million in available capital and an existing contractual relationship with a certified medical school – or, ACRC. Furthermore, the opinion makes no reference to the arguments raised in an amicus brief co-authored by Drexel University College of Medicine; the Trustees of the University of Pennsylvania; Thomas Jefferson University; the University of Pittsburgh; Penn State College of Medicine; Lake Erie College of Osteopathic Medicine; and, Temple University; all of whom were prepared to rapidly move forward with their CR partners to conduct much needed research in areas of vital public health, including cancer, sickle cell disease, and opioid addiction. 

This is significant because to date Pennsylvania is the only state that includes opioid addiction among the list of qualifying conditions that can be treated with medical marijuana. Only ten days ago, Gov. Tom Wolf issued a press release lauding the potential of medical research through Chapter 20.  “The research component of Pennsylvania’s medical marijuana program sets it apart from the rest of the nation. . . . Pennsylvania’s premiere medical schools will be able to help shape the future of treatment for patients who are in desperate need not just here, but across the country.”

The Department is considering its legal options, but is expected to appeal Judge McCullough’s order to the Pennsylvania Supreme Court. In a statement Department spokeswoman April Hutcheson said:  “Research is a vital component of Pennsylvania’s medical marijuana program to improve treatment options for patients suffering from serious medical conditions, including opioid-use disorder. . . . The research program was rolled out in consultation with the sponsors of the original legislation and our approach was meant to ensure lower costs, more accessibility and ground-breaking treatments.”

The Regulated Substances Blog is intended to keep readers current on developments regarding medical cannabis legalization and regulation and is not intended to be legal advice. If you have any questions, please contact the author, Peter Murphy, at pmurphy@eckertseamans.com, or contact Dan Clearfield at dclearfield@eckertseamans.com or any other member of our Regulated Substances Group.

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Peter S. Murphy

Member - Wilmington