A Johnstown medical marijuana grower has reportedly laid off or cut 50 of its 110 employees, saying the state has allowed large 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 states that only five companies can hold both dispensary and grow/processor permits, and no company can operate more than than 15 outlets.
However, he says six multi-state companies own more than half of dispensary vouchers, and five of the six operate more than 15 outlets.
“I believe that Pennsylvania’s medical marijuana program is in shambles,” Kenney said. “The few remaining independent businesses that invested with the promise of fair competition may soon disappear. The existing monopoly has already led to some of the highest prices for medical marijuana in the country and reduced patient choice.”
According to a report by The Tribune-Democrat in Johnstown, the problem stems in part from multi-state companies acquiring other carriers, with their size and financial strength giving them an advantage over state independents.
Pennsylvania’s medical marijuana industry is overseen by the state’s health department.
This was reported by a representative of the Department of Health The Tribune Democrat notes that “Act 16 places limits on the acquisition of permits, but that doesn’t mean Pennsylvania can simply prevent those permit holders from transferring capital.”
Kenney said Hanging Gardens and several other independent operators have tried unsuccessfully to get help from the health department and state lawmakers and will now sue the state.
“It is not right if the administration allows this monopoly to continue to exist and withdraw its tens of millions of dollars from the state, while many of my former employees do not know how they will now put food on the table,” Kenny said.
A spokeswoman for Hanging Gardens said Thursday that it does not have an expected filing date, but lawyers are working on it “with great urgency due to the dire state of the medical marijuana program in terms of both patient access and the Company’s survival in Pennsylvania.”