By: Micah Bucy
It’s been nearly 3 years since SB 3 was introduced in the Pennsylvania Senate, known today as the Medical Marijuana Act of 2016 (“Act”). During the past year, the Department of Health (“Department”) has drafted and issued regulations governing the implementation and ongoing operations of the growers/processors, dispensaries, laboratories, physicians, and patients. The Department has also issued roughly half of the permits available under the Act, 12 grower/processors permits and 27 dispensaries permits. All of the permit winners have started building-out their facilities with an anticipated completion date of December 31, 2017. Despite this industrious schedule, the Department has also scheduled hearings and debriefings for unsuccessful Phase I applicants. All of this hard work is being threatened to be undone by 1 disgruntled applicant that failed to timely submit one application and failed to demonstrate two other operations would be in the best interest of Pennsylvanians.
Keystone ReLeaf, LLC (“ReLeaf”) is the disgruntled applicant. ReLeaf filed a lawsuit in the Commonwealth Court seeking to, ironically, deny the very medical relief it championed in its application and which patients desperately want and need. ReLeaf requested a preliminary injunction to immediately halt the Medical Marijuana program while the other legal issues listed in the Petition are decided by the Commonwealth Court. In its Petition, ReLeaf is challenging the constitutionality of the Act and asking that all Phase I permits issued be rescinded and the application process start anew. Specifically, ReLeaf is first asking for an injunction that would require the Phase I winners to halt their build-out process (which is almost complete and would ultimately delay medical marijuana products to patients) while ReLeaf seeks declarations from the Court that the Department’s Phase I permitting process was arbitrary, capricious, unreasonable and ultra vires – legal speak for unconstitutional and therefore unlawful. ReLeaf also argues that the Department has no authority to issue the remaining permits made available by the Act under the current permitting process. But ReLeaf goes further – in a twisted pun on its name, it requests the only legal relief that is guaranteed to cause the most harm to the patients, the intended beneficiaries of the Act, by asking the Court to stop the Phase I winners from becoming operational and rescind these permits. The intended result of ReLeaf’s argument is to deny growers/processors the ability to grow medicine and the ability of dispensaries to sell medical marijuana products in Pennsylvania, which in turn would deprive patients of medical marijuana in Pennsylvania for a very long time.
In its lawsuit, ReLeaf, in passing, acknowledges that if the Court sides with the company, it “may briefly delay” the implementation of the Act but argues that such a delay is in the best interest of patients. Conveniently ignored is the fact that legal challenges to state medical marijuana programs are almost never brief – for instance, Maryland legalized medical marijuana in 2014 and has yet to dispense medical marijuana to any patient (although it is finally on track to do so in early 2018). So, no, what ReLeaf is requesting is not just a bump in the road to implementation, rather its a request to redo, or rather undo, the entire process. The outcome of ReLeaf’s petition has the potential to devastate the entire program for the foreseeable future
However, it’s not all doom and gloom. While ReLeaf’s lawsuit has the potential to be devastating, the Department pitched ReLeaf a curve ball by filing preliminary objections due to ReLeaf’s failure to join all 39 Phase I permit winners as defendants in the case. The Department argued that the winners had property rights in their permits that ReLeaf was seeking to abrogate. ReLeaf, boxed into a legal corner, was forced to file an Amended Petition enjoining the winners. Making it even more difficult for ReLeaf will be the certain intervention of other interested parties, including other unsuccessful Phase I applicants that are appealing the denial of their Phase I application and intend to apply during the Department’s Phase II process, other industry-related groups whose operations are entirely contingent on the manufacturing and retail aspects of the industry being operational such as laboratories and physician groups, not to mention patients and patient-oriented groups.
In addition to having to fight at least 39 new defendants ReLeaf did not initially anticipate, it will also need to overcome the significant jurisdictional issue of whether the Commonwealth Court can even hear the case. In short, the Act provided the right to appeal the denial or rejection of a permit to the Department’s Secretary – ReLeaf, along with 150-plus other unsuccessful applicants – filed these administrative appeal, but ReLeaf also filed the lawsuit with the Commonwealth Court before the Department’s Secretary ruled on the administrative appeal. Put differently, ReLeaf likely failed to exhaust its administrative remedies thus precluding the Commonwealth Court’s jurisdiction at this juncture. And if the Court does not have jurisdiction over the case, then the request for injunction will be denied, Phase I winners can continue to work towards becoming operational by years end, and medical marijuana products will likely be available to patients on the current timeline of early-2018.
A denial of ReLeaf’s request for a preliminary injunction would also mean that other hopeful grower/processor and dispensary applicants can continue to prepare for Phase II; physicians can continue to get certified and patients can expect relief (not Releaf) in early 2018.