So You Want To Open A Medical Marijuana Facility….. Now What? Real Estate And Zoning Considerations For Medical Marijuana Facilities
When Pennsylvania adopted the Medical Marijuana Act nearly every industry in the state was impacted. One of the industries that has been largely ignored to date may also be one of the most significant in obtaining a medical marijuana permit: real estate. Under the Act, one of the considerations in obtaining a medical marijuana permit is the “ability to obtain in an expeditious manner the right to use sufficient land, buildings and equipment to properly grow, process or dispense medical marijuana.” Thus, the initial questions for anyone seeking to enter the medical marijuana industry is to determine what type of facility you are going to run and where you are going to run it.
The Act establishes two types of medical marijuana permits: growers/processors and dispensaries. Initially only 25 permits will be available for growers/processors and only 50 permits for dispensaries, however a dispensary permit allows sales at up to 3 separate locations. With the limited number of available permits and a nonrefundable application fee of $10,000 for a growers/processors permit and a nonrefundable application fee of $5,000 for a dispensary, it is important to submit the best possible application, which includes the facility location.
So you know what type of facility you want to run, now where are you going to run it? The Act provides some guidance in determining where to locate a medical marijuana facility. A municipality must allow medical marijuana facilities. Specifically, the zoning section of the Act states:
1). A grower/processor shall meet the same municipal zoning and land use requirements as other manufacturing, processing and production facilities that are located in the same zoning district.
2). A dispensary shall meet the same municipal zoning and land use requirements as other commercial facilities that are located in the same zoning district.
A facility may also not be located within 1,000 feet of the property line of a public, private or parochial school or a day care center.
While this language gives some guidance, it does not really address the practical implications of choosing a site location. For example, several municipalities are currently in the process of amending their zoning ordinances to only permit medical marijuana facilities through a public conditional use or special exception hearing which will impose stringent conditions on the operation of the facility. Other municipalities have openly welcomed the medical marijuana industry and are treating it like any other business. Again, the standard being reviewed for the permit application is the ability to expeditiously obtain the right to use property for a medical marijuana facility. Thus for the permit application, and the process in general, it is important to find locations with as few hurdles as possible.
The Act is also littered with sections which give some indication of where facilities should be located. For example, one of the criterion which will be reviewed is whether there is sufficient access to public transportation. If you are looking at a site that is nowhere near a SEPTA station, you may want to reconsider. If patients cannot get to the facility, the application likely will not be viewed favorably.
Medical marijuana is a new and burgeoning industry in Pennsylvania. If you want to be a part of it, it is important to understand not only the guidelines governing a property you are considering to use to operate a facility, but also the local politics that may be at play. In other words, as with all things real estate, it is all about location, location, location.
If you have additional questions feel free to contact me, or other attorneys at HRMM&L.
January 16, 2019
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