The East Coast Cannabis Industry is Making Moves

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The East Coast may be the next frontier for cannabis entrepreneurs and enthusiasts. Jurisdictions up and down the coast are set to rollout medical marijuana programs, expand existing programs, and/or are piecing together legislation to create the regulatory structure for adult-use. Maryland, Pennsylvania, Washington, D.C., West Virginia, Rhode Island and Delaware are all poised to expand or establish medical marijuana and/or adult-use programs in the next year.

Maryland and Pennsylvania are among the biggest medical marijuana programs to rollout this year. Due to the number of marijuana business licenses issued and the projected patient count for each state, these programs are sure to have a major impact on the proliferation of cannabis markets East of the Mississippi. Maryland, with the most highly anticipated program rollout on the Eastern seaboard, is set to have its cultivators harvesting medicinal cannabis by late summer, with patient access by the end of this year. However, this program has been fraught with delays, lawsuits and internecine legislative battles since its inception. If Maryland’s program does indeed crystallize in late 2017 as expected, 102 dispensaries, 15 cultivation facilities and 15 processing facilities will be capable of serving Maryland’s pool of patients, whose patience has been commendable. Despite passing legislation over two years after Maryland , Pennsylvania’s rollout of its new program is steadfastly on the heels of its neighbor to the south of the Mason Dixon line. The PA Department of Health’s deadline for accepting all applications for dispensary, grower and processing licenses lapsed in April 2017. The Department of Health expects to begin registering patients in mid-2018, and, if the program stays on pace it should be operational by late 2018.

For the first time since the inception of its medical marijuana program in 2014, Washington, D.C. will license a 6th medical dispensary, located East of the Anacostia river. The expansion is a response, in part, to increased demand among District residents and the reciprocity law the D.C. City Council passed in late 2016, which allows medical marijuana patients in other jurisdictions to purchase their medicine at a D.C. dispensary. The Department of Health will review applications for the highly coveted and competitive single dispensary license later this year. Given that the licensing infrastructure is well established, this new dispensary should open its doors in 2018.

On April 7, 2017, West Virginia’s legislature passed the West Virginia Medical Cannabis Act, and the bill is currently sitting on Governor Jim Justice’s desk patiently awaiting signature. Given the Governor’s outspoken support for the measure, the bill is likely to be signed into law before school lets out for summer break. West Virginia’s target date for the rollout of its medical marijuana program is 2018.

There are also a number of jurisdictions whose legislatures are dabbling with adult use bills. Maryland, Washington, D.C., Delaware and Rhode Island may follow Maine and Massachusetts as the next East Coast adult-use markets. Maryland lawmakers introduced companion adult-use use legislation in early March 2017. However, in Maryland, this seems to be a cart-before-the-horse approach because Maryland dispensaries have yet to dispense a single gram of medical marijuana. Delaware and Rhode Island also have pending recreational legislation, but these legalization efforts may be stalled by their respective governors. Despite this opposition, both states’ bills enjoy rare bipartisan support.

In an article published earlier this year, we discussed the January 2017 adult-use bill before the D.C. City Council, which would create the infrastructure for a robust adult-use market in the Nation’s Capitol. Technically speaking, adult-use marijuana is legal in Washington, D.C. – adults may possess and transport up to 2 ounces, and transfer up to 1 ounce of marijuana. However, it is still illegal to sell adult-use marijuana in Washington, D.C., and thanks to the perplexing legislative process which culminates in mandatory Congressional review of all laws passed by the City Council, Congress will have the final say on this adult-use bill.

The trail of legalized marijuana is still being blazed up and down the Atlantic, and its final destination remains unknown. But it is clear that public and legislative support for liberalized access to medical and adult-use marijuana is not dwindling. Industry watchers should keep an eye on the East Coast cannabis market, as its success could be a catalyst for further reform.

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