How to start a commercial grow operation in Pennsylvania

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Pennsylvania legalized medical marijuana in 2016 and is in the process of expanding its program. The number of existing marijuana businesses is expected to double by the time legislation is finalized.

This article explains more about how much you could earn in the marijuana market, as well as the financial and licensing requirements for starting a marijuana-growing operation in Pennsylvania.

When was cannabis made legal in Pennsylvania
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Cannabis Legislation in Pennsylvania

Governor Tom Wolf signed Senate Bill 3 into law on April 17th, 2016, legalizing medical cannabis in Pennsylvania. The medical marijuana law would allow qualified patients to utilize marijuana as an alternative form of treatment. It also permits up to 25 growing operations and 150 dispensaries to operate in the state.

Senate Bill 3 permits the medical use of cannabis. More specifically, it legalized the consumption and possession of medical marijuana by registered patients suffering from qualifying medical conditions.

It also permitted the opening of medical marijuana growing operations. During the first phase of the program, there will be up to 12 permits issued for growing operations across Pennsylvania’s six medical marijuana regions. There will also be 27 dispensary licenses, which may increase to 50, with each one being able to expand to a max of 3 locations (so, a maximum of 150 storefronts in the first allocation period). Currently, there are no growing operations available in the state.

License requirements

Pennsylvania is one of the latest states to legalize the use of medical marijuana. Its law includes employee protections for patients and PTSD as one of 17 qualifying conditions. Currently, the state does not allow for more than 50 marijuana business permits to be awarded and no more than 5 permits to be awarded to one person. The application period for licensure is currently closed.

Growing operation applicants must prove that they can maintain effective security against illegal conduct, as well as evidence of compliance with the local zoning requirements. The Department of Health will approve applications that rank the highest among a wide range of criteria.

There is a $30,000 refundable fee that must be submitted with the application. There is also an annual renewal fee of $5,000. Additionally, the state will require proof of funds, in the form of a $150,000 deposit in the applicant’s bank account.

Financial requirements

Financial requirements
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An individual may hold up to five individual marijuana business registrations. Each registration is associated with up to three locations. The fees for growing operation licensees are as follows:

  • $5,000 non-refundable application fee
  • $30,000 registration fee – submit with application; refunded if not granted a license
  • $5,000 renewal fee (per year)
  • $150,000 required in capital by the Department on deposit with a financial institution
  • $250 relocation or modification of activities fee

Vertical integration – both growing operation and dispensary

  • Must apply for each license separately, with each individual fee
  • Up to 5 vertically integrated entities may be licensed

Note that all capital required by the Department must be verifiably available at the time of the application. All costs associated with preparing for the application, including early real estate costs, are added to these fees.

How much does a Pennsylvania marijuana growing operation make?

Pennsylvania is estimated to sell as much as $227,400,000 worth of medical marijuana in 2021, so the potential is high in this state. Marijuana growing operations are typically quite profitable, making anywhere from $50,000 a year up to millions.

Timeframe
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Timeframe

The amount of time needed to open a marijuana business can vary greatly. You’ll need to allow enough time to get finances in order, acquire necessary licenses, and get suppliers and employees lined up. At least a year is typically a good idea.

Consulting Companies

Looking to start a marijuana-growing operation in Pennsylvania? The consulting companies listed below provide a wide range of services from helping with state licensing requirements and applications to running and stocking your business.

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