Pa. medical marijuana grower lays off dozens, says industry taken over by out-of-staters
A Johnstown-based medical marijuana grower has reportedly laid off or cut the hours of 50 of its 110 employees, saying the state has allowed big, out-of-state firms to monopolize the industry.
Hanging Gardens and several other independent growers are in the process of filing a lawsuit against the state, a spokeswoman said Thursday.
According to Hanging Gardens owner Steve Kenney, Pennsylvania’s 2016 law legalizing medical marijuana law said only five companies can have both dispensary and grower/processor permits, and no company can operate more than 15 retail locations.
However, he says six multistate companies own more than half the dispensary permits and five of the six operate more than 15 retail locations.
“I consider the Pennsylvania medical marijuana program to be in collapse,” Kenney said. “The few remaining independent businesses who invested with the promise of fair competition may soon disappear. The existing monopoly has already resulted in some of the highest medical marijuana prices in the country and diminishing patient choice.”
According to reporting by The Tribune-Democrat in Johnstown, the problem stems in part from multistate companies acquiring other operators, with their size and financial strength giving them an advantage over state-based independents.
Pennsylvania’s medical marijuana industry is overseen by the state health department.
A health department spokeswoman told The Tribune Democrat the “Act 16 set limits among permit acquisitions but that does not mean Pennsylvania can simply prevent equity transfers by those permit-holders.”
Kenney said Hanging Gardens and several other independent operators tried unsuccessfully to get relief from the health department and state lawmakers and now will sue the state.
“It’s not right for the administration to allow this monopoly to continue to exist, and to take their tens of millions of dollars out of the state, while many of my former employees don’t know how they will now put food on the table,” Kenney said.
A Hanging Gardens spokeswoman on Thursday said she didn’t have an expected filing date for the lawsuit, but lawyers are working on it “with great haste due to the dire state of the medical marijuana program with regard to both patient access and the survival of Pa.-based businesses.”