Marijuana's licensing woes in other states a warning for Pennsylvania

Another legislative hearing on recreational marijuana legalization focused on avoiding the mistakes of other states.

Legislators want to focus on equity, but economic considerations can make it difficult.

“Due to lack of funding, many companies who are equity (license holders) are controlled by really large, multi-state operators,” said Laury Lucien, CEO of Cami Flower, a marijuana business in Massachusetts. “The people who are controlling the company don’t look like the equity applicants.”

Massachusetts has a social equity program in its marijuana sector to help minority or previously convicted drug users get involved in the recreational market. But having explicit programs doesn’t guarantee success.

The licensure process for marijuana is also trickier than for other industries, even highly regulated ones.

“The licensing process is onerous,” Lucien said. “I was able to open my brewery in less than a year; it took me 4 years to go through marijuana licensing. That’s really ridiculous.”

New Jersey’s program also has an equity component and faces similar buy-out pressures, but its conditional licenses have also helped new entrepreneurs.

“One of the things New Jersey did that was a great benefit for social equity applicants and applicants in general was they had a conditional license. With that conditional license, you weren’t required to have the real estate or capital up front,” said Tahir Johnson, owner of Simply Pure Trenton. “Once I got that conditional license, that allowed me to go out and raise capital.”

Republicans were wary, however, of the social consequences of a legal market.

“If we’re gonna create a new industry, definitely it is time for social equity in the industry,” said Rep. Kathy Rapp, R-Warren. “The consumer side, that’s the side that really concerns me.”

Rep. Tim Twardzik, R-Frackville, noted the concerns he’s heard from a local pediatrician who’s seen marijuana-related health problems in her office.

“Don’t we have enough trouble in the world that we don't need to open this up right now?” he said.

Testifiers noted more research could help clarify where the problems come from. For market competition, though, preserving small storefronts may not be possible for recreational marijuana.

“At some point, you’re probably looking at the vertical integration of these businesses. It’s just unavoidable I think,” said Rep. Dan Frankel, D-Pittsburgh, said. “But there probably are other opportunities for social equity in terms of revenues that are generated and can be directed to affected communities.”

Cheryl Lynn Allen, of counsel with the Pennsylvania Family institute and a former Allegheny County lawyer and judge, warned of the consequences of “encouraging an industry which depends upon drug addiction and drug abuse in order to make profits.”

“Laws should uplift and strengthen communities,” Allen said. “That is not going to happen through promoting marijuana to the community.”

She argued many people in her courtroom were dysfunctional due to drug use and addiction.

Frankel, though, argued legislators needed to adjust to what’s around them.

“The fact of the matter is that we have a vibrant illicit market, we have states that surround us that have legalized … it’s a reality,” he said. “If it’s here, we need to make it as safe as possible."