IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Medical Marijuana Advocates for
Research
Petitioner
v.

MD 2018

No.

Rachel L. Levine, MD, Secretary,
Pennsylvania Department of Health,
Respondent.

ORDER GRANTING
APPLICATION FOR SPECIAL RELIEF
IN THE NATURE OF A PRELIMINARY INJUNCTION

NOW, this

2018, Petitioner’s application

of

for special relief in the nature of a preliminary injunction is hereby granted.
1.

Respondent Rachel

L.

Levine, MD,

Secretary,

Pennsylvania

Department of Health, is hereby preliminarily enjoined from enforcing the
regulations affecting Clinical Registrants at 28 Pa. Code

§

1211.27, 1211.28

1211.30, 1211.31, 1211. 32,and 1211.34promulgatedAugustl8,2018at48Pa.
B. 5027 (Revised Chapter 20 Regulations), pending the outcome of this litigation
or further order of court.
2.

Petitioner shall post bond in the amount ofSlOO.

 3.

Should Respondent appeal this order, such appeal shall not act as a

supersedeas under Pa. R.A.P. 1736(b). The applicable standards for vacating a
Rule 1736(b) supersedeas are substantially identical to those for granting a
preliminary injunction. See Department ofEnvironmental Resources v. Jubelire,;
614 A.2d 199 (Pa. 1989).

Accordingly, the Court’s grant of a preliminary

injunction demonstrates that Petitioner would be entitled to have any Rule 1736(b)
supersedeas vacated. Under the circumstances of this case, and in the interests of
judicial economy, the Court makes that ruling at this time.

BY THE COURT:

J.

 IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Medical Marijuana Advocates for
Research
Petitioner,
v.
No.

MD2018

Rachel L. Levine, MD. Secretary,
Pennsylvania Department of Health,
Respondent.

APPLICATION FOR SPECIAL RELIEF
IN THE NATURE OF A PRELIMINARY INJUNCTION
Petitioner Medical Marijuana Advocates for Research (MMAR) respectfully
applies, pursuant to Pa. R.A.P. 1532(a), for a Preliminary Injunction to prevent
enforcement of the Department of Health’s (DOH) August 18, 2018 temporary’
regulations at 28 Pa. Code

§

1211.21- 1211.37,48 Pa.B. 5027, (Revised Chapter

20 Regulations) purporting to implement the

Clinical Registrant provisions

contained in recently-amended Chapter 20 (Chapter 20) of the Medical Marijuana
Act, 35 P.S

§

10231.2001-2003 (Act or Medical Marijuana Act), as amended, P.L.

322, No. 43, June 22, 2018 (Act 43).’

DOH’s Revised Chapter 20 Regulations are appended to Petitioner’s Petition
for Review filed contemporaneously herewith as Exhibit A.
1

1

 INTRODUCTION
1.

The court is familiar with the Act and with DOH’s previous attempt to

promulgate regulations to implement the Act’s Chapter 20 research provisions in a
manner that unlawfully delegated DOH’s authority to private entities and failed to
follow the Act’s mandate that Chapter 20 requires a meaningful commitment to
much-needed research. The Revised Chapter 20 Regulations that are the focus of
this case again fail on both counts.
2.

By opinion and order entered May 22, 2018 in SALES Compassionate

Care, LLC et aL v. Levine, No. 233 M.D. 233 (Pa. Cmwlth. 2018) (McCullough, J.)
(unreported) (Levine I), appended to the Petition for Review as Exhibit B, this court
preliminarily enjoined DOH’s first attempt to implement the CR provisions of
Chapter 20 of the Act (Original Chapter 20 Regulations), in part because (a) those
Original Chapter 20 Regulations unlawfully delegated to ACRCs the vetting and
selection of the most qualified entities to be CRs, see Levine I, Exhibit B to the
Petition for Review at 38-40; and (b) those Original Chapter 20 Regulations required
“only a minimal commitment to research to obtain and retain a permit” see Levine I,
Exhibit B to the Petition for Review at 33-34, notwithstanding the legislature’s
“intent to implement a robust research program” for medical marijuana. Levine I,
Exhibit B to the Petition for Review at 49. The Court in Levine I also based its grant
of a preliminary injunction on its conclusion that whereas Chapter 20 of the Act
2

 prohibited CRs from engaging in “commercial distribution” of medical marijuana in
competition with petitioners AES et al. and other commercial medical marijuana
permittees that hold permits issued under Chapter 6 of the Act, DOH’s Original
Chapter 20 Regulations permitted CRs to sell medical marijuana in competition with
Chapter 6 permittees. Levine J, Exhibit B to the Petition for Review at 34, 49.
3.

On June 22, 2018 the General Assembly amended Chapter 20 of the

Act to provide, ijiter alia, that CRs are ;zot prohibited from engaging in “commercial
distribution” of medical marijuana in competition with Petitioner’s members and
other Chapter 6 permittees. 35

p.s §

10231 .2002(b)(8)-(10). A copy of Act 43 of

2018 amending Chapter 20 of the Act is appended to the Petition for Review as
Exhibit C. On July 28, 2018, DOH rescinded its Original Chapter 20 Regulations
that were the subject of the preliminary injunction in Levine I, and thereafter
promulgated its Revised Chapter 20 Regulations that are the subject of the Petition
for Review.
4.

Although Act 43 of 2018 “cured” the error in DOH’s Original Chapter

20 Regulations that permitted CRs, in addition to performing research with ACRCs,
to sell medical marijuana in competition with Chapter 6 permittees (by expressly
permitting CRs to engage in such commercial competition), Act 43 made no changes
that “cured” either (a) the delegation problem or (b) the “minimal commitment to

3

 research” problem because of which the Court in Levine I preliminarily enjoined the
Original Chapter 20 Regulations.
5.

As

described

in

more

detail

below

and

in

Petitioner’s

contemporaneously filed Petition for Review, the Revised Chapter 20 Regulations
continue to suffer from (a) the identical delegation problem and (b) the identical
“minimal commitment to research” problem that were bases for Levine i’s
preliminary injunction halting implementation of the Original Chapter 20
Regulations relating to CRs. Accordingly, Petitioner asks that DOH’s Revised
Chapter 20 Regulations relating to CRs be preliminarily enjoined.
6.

A preliminary injunction is appropriate because:
a.

Petitioner has a clear right to relief, in that the Revised Chapter
20 Regulations continue to (a) unconstitutionally delegate
DOH’s responsibility to vet and approve Clinical Registrants
(CRs) to private Academic Clinical Research Centers (ACRCs)
and (b) ignore the legislature’s intent in Chapter 20 to promote
“high quality research.” 35 P.s

§ 1023 l.l02(3)Qii), by watering

down the commitment to research required of CRs;
b.

Petitioner’s members will be irreparably harmed if the process
for choosing CRs to work with ACRCs goes forward now as
prescribed in the Revised Chapter 20 Regulations;
4

 c.

the balancing of potential harms to Petitioner and its members
versus the respective interested parties in the medical marijuana
industry and the public weighs heavily in favor of halting the
roll-out of CR/ACRC licensing that the Revised Chapter 20
Regulations initiate until the legal challenge to the Revised
Chapter 20 Regulations is resolved; and

d.

a preliminary injunction is suitable relief that will restore the
status quo.

See SEJU Healthcare Pennsylvania v. Coin., 104 A.3d 495, 501-02 (Pa. 2014)
(reciting multi-factor preliminary injunction standard).
7.

The court should require only a nominal bond to secure the preliminary

injunction as no entity has yet been approved as a CR and any efforts made to date
on behalf of aspiring CRs would be required regardless of whether Petitioner had
filed this lawsuit; consequently, no entity will sustain reasonably foreseeable
damages as a result of the issuance of a preliminary injunction.
8.

In addition, Petitioner requests that the court specify in its order

granting a preliminary injunction that no appeal from the order will act as an
automatic supersedeas under Pa. R.A.P. 1736(b).

S

 FACTS
9.

To advance the Act’s commitment to “high quality research” in medical

marijuana, 35

p.s

§ 10231.102(3)(iii), Chapter 20 of the Act authorizes

Pennsylvania’s eight accredited medical school/teaching hospitals to form ACRCs,
which are research clinics. 35 P.S § 10231. 2002. An ACRC then partners with an
entity that needs a medical marijuana grower/processor permit and a dispensary
permit to secure status as a CR to supply medical marijuana for use in ACRC
supervised clinical trials and other research. 35 P.S § 10231. 2003.
10.

Both ACRCs and CRs are required to secure DOH approval. Chapter

20 of the Act, as amended by Act 43, provides for an ACRC to contract with a CR
to “provide advice” to the CR regarding patient safety and to gain access to medical
marijuana for research and clinical trials conducted jointly by the ACRC and the CR.
35 P.S § 1023 1.2001-2004.
11.

Section 2001 expressly provides that a CR is an entity that (a) “is

approved by [DOHJ to hold a permit as both a grower/processor and a dispensary”,
(b) “has a contractual relationship” with an ACRC, and (c) is approved by DOH as
aCR
12.

Section 2002 authorizes a CR to: (i) “provide medical marijuana at not

more than six separate locations”; (ii) sell its medical marijuana products to the CR’s
dispensaries; (iii) sell or exchange its seeds, plants, or products with Chapter 6
6

 grower/processors; (iv) petition DOH to sell its medical marijuana products to
Chapter 6 dispensaries upon a showing that the products “have a practical effect on
patients which changes a recommendation within the medical field”; and (v)
dispense medical marijuana products to any authorized patient or caregiver
possessing a valid medical marijuana card.
13.

Chapter 20, as amended by Act 43, does not require that DOH delegate

the responsibility of selecting CRs to the ACRCs, but that is the result achieved
through DOH’s Revised Chapter 20 Regulations.2 That is because the sequence and
timing of ACRC and CR applications as prescribed in the regulations, and as
administered by DOH, requires each ACRC to select the single entity that may
lawfully apply to be that ACRC’s CR, and thus effectively excludes Petitioner’s
members from consideration, and preordains the issuance of grower/processor and
dispensary permits to the lone CR applicant chosen by the ACRC (several of whom
were unsuccessful in their attempts to secure permits through DOH’s normal highly
competitive process), by narrowing to a single applicant the “pool” of potential CRs
for each ACRC.
14.

Chapter 20, as amended by Act 43, does not require DOH to water

down the Act’s command that DOH promote “high quality research,” 35 P.S

2

§

To the extent they are required by the Act, however, the Act likewise provides
for an unlawful delegation of government responsibility to a private entity.
7

 10231.1 02(3)(iii), but that is the result achieved through DOH’s Revised Chapter 20
Regulations, because they tolerate a commitment by CRs to only a minimal
involvement in research.
15.

DOH’s Revised Chapter 20 Regulations thus lack fidelity to the Act in

two critical ways, each of which the court in Levine I found fatal, and neither of
which DOH corrected in revising its Original Chapter 20 Regulations and issuing its
Revised Chapter 20 Regulations: (a) they unlawfully delegate DOH’s duty to vet
and select the eight CRs to the 8 ACRCs; and (b) they abdicate DOH’s responsibility
to create an ACRC/CR program that demands “high quality research.” 35

p.s

§

1023 1.102 (3) (iii).
Unlrnv liii deleRation
16.

The application deadline for approval as an ACRC under DOR’s

Revised Chapter 20 Regulations was September 20, 2018. 48 Pa. B. 5423 (August
25, 2018). All eight of Pennsylvania’s accredited medical school/teaching hospitals
submitted applications, and all were approved and certified as eligible to enter into
a

contract

with

a

CR

the

next

day,

on

September

21,

2018.

https://www.rnedia.pa.ov/Pa2es/Health-Details.aspx?newsid=532. See 48 Pa. B.
6629 (October 13, 2018).

The approved ACRCs are: Perelman School of Medicine at the University of
Pennsylvania (Penn); Sidney Kimmel Medical College at Thomas Jefferson
University (Jefferson); University of Pittsburgh School of Medicine (UPMC); Penn
8

 17.

Although Act 43 prohibits an ACRC from contracting with a CR until

the ACRC is approved and certified by DOH, 35

p.s

§ 10231. 2001.1, DOH’s

Revised Chapter 20 Regulations required each ACRC to identify its pie-selected
intended CR in its ACRC application. 28 Pa. Code
18.

§ 1211.25(c)(3).

The Act provides that DOH may approve up to 8 CRs. 35 P.S

§ 10231.

2002(a). The application deadline for approval as a CR under DOH’s Revised
Chapter 20 Regulations was November 8, 2018. 48 Pa. B. 5423 (August 25, 2018).
19.

DOH’s Revised Chapter 20 Regulations require that a CR applicant

include with its application, as a precondition to being considered for CR status, an
executed contract with the ACRC with which it has agreed to partner. 28 Pa. Code

§ 121 l.27(b)(7)(i).
20.

By requiring a CR applicant to demonstrate that it already has a contract

with an ACRC as a prerequisite to filing a CR application, 28 Pa. Code

§

121 1.27(b)(2) and (b)(7)(i), DOH’s Revised Chapter 20 Regulations once again, as
under the Original Chapter 20 Regulations this court enjoined, improperly allow
each ACRC to select the single entity that may lawfully apply to be that ACRC’s
CR, and thus effectively preordain the issuance of grower/processor and dispensary

State College of Medicine (Penn State); Lake Erie College of Osteopathic Medicine
(LECOM); Lewis Katz School of Medicine at Temple University (Temple); Drexel
University College of Medicine (Drexel); and The Philadelphia College of
Osteopathic Medicine (PCOM). 48 Pa. B. 6629 (October 13, 2018).
,

9

 permits to the CR applicant chosen by the ACRC, leaving DOH with the fait
acconzpli of approving the ACRC’s choice and issuing a grower/processor permit
and a dispensary permit to the single prospective CR privately pre-selected by the
ACRC. or denying the CR’s application. As the court in Levine I held on identical
facts, this “creates the appearance that the Department has delegated its duty to
regulate the medical marijuana program” to the ACRCs. Exhibit B to the Petition
for Review at 39-40.
21.

Indeed, it is DOH’s duty to vet permit applications and select the most

qualified recipients of grower/processor and dispensary permits. DOH’s Revised
Chapter 20 Regulations thus turn the agency’s CR process into an after the fact
rubber stamp, which most assuredly is not the permit issuing process envisioned by
the General Assembly in Chapter 20 of the Act.
22.

This insertion of the ACRC into the CR approval process creates an

acknowledged “pay to play” concern that DOH’s Revised Chapter 20 Regulations
vainly attempt to inoculate against through a prohibition on the ACRC’s receipt of
kickbacks from the CR or its affiliates, and the requirement of affidavits from each
detailing the amounts paid. The pay to play “prohibition,” however, is but a
“Potemldn Village,” where the regulations permit the ACRC, upon “discovery” of a
“pay to play” scheme, to simply refund the CR’s unlawful payment, allegedly curing
the violation. 28 Pa. Code

§* 1211.34 (prohibition); 12l1.27(b)(4) (CR affidavit
10

 requirement); 1211 .25(c)(3) (ACRC affidavit requirement); 1211.30(c) (ACRC
refund).

23.

The experience of Petitioner’s members is that ACRCs have done very

little to assure the selection of the most qualified CR partners, have not contacted
Petitioner’s members to give them the opportunity to become CR partners, and that
only two ACRCs even attempted to use some type of limited RFP process to identify
CR candidates. The abandonment of normal RIP processes by the universities and
hospitals supports the inference, if not a conclusion, that pay for play is a reality.
24.

On information and belief, many if not all the CR applicants had

agreements in principle with the medical school/teaching hospital that ultimately
chose them to be that ACRC’s CR as early as late 2016 or early 2017, long before
DOH even reviewed applications or awarded Chapter 6 permits to the 25 best
grower/processors and the 50 best dispensaries from many hundreds of applicants.
25.

The concern that DOH’s process fails to produce the best-qualified CRs

is not speculation. On information and belief, several ACRCs have already
contracted with several would-be CRs that were losers in DOH’s highly competitive
application process for grower/processor and dispensary permits:
a.

Curaleaf, successor in interest to Palliatech. an unsuccessful
medical marijuana grower/processor permit applicant in DOH’s

11

 Phase I that placed 105th out of 177 applications, has been
selected by Penn as that ACRC’s CR;
b.

MLH Explorations, Inc., Jefferson’s chosen CR, applied for a
grower/processor permit in Phase II and was denied, placing 26th
out of 71 scored applications;3

c.

Columbia Care Pennsylvania LLC, UPMC’s chosen CR, applied
for a grower/processor permit in Phase I and was denied; and

d.

Elemental Health Group, LLC, Penn State’s chosen CR, applied
for a grower/processor permit in Phase I and likewise was
denied.

26.

Curaleaf’s circumstances offer a window into the core problem with

DOH’s unlawful delegation to ACRCs and the “rubber stamp” effect of allowing
only a single CR applicant per ACRC to compete for that status. In a Canadian
Securities Exchange Listing Statement issued October 26, 2018, Curaleafs parent
company, Curaleaf Holdings. Inc., understandably provided potential investors with
a rosy description of its Pennsylvania prospects, explaining that “[tjhough it is not
currently licensed” in Pennsylvania, it “has partnered with an accredited medical
school” to obtain a clinical registrant license, that “[o]nly a private operator that has

MLH sought to intervene in Levine I based on its self-proclaimed status as a
“prospective” CR.
12

 entered into a research contract with certain in-state medical schools is eligible to
receive a clinical registrant license,” that licenses are expected to be issued in the
Fall of 2018, and that Curaleaf “anticipates that it will be operational in Pennsylvania
in Ql 2019.” See Curaleaf Holdings, Inc. CSE Form 2A Listing Statement dated
October 26, 2018 at 120, attached to the Petition for Review as Exhibit F. For the
convenience of the court, page 120 of Curaleafs filing is attached hereto as Exhibit
1.
27.

Curaleaf’s

investor

disclosure

is,

unfortunately,

appropriately

confident, because there is every reason to believe that under the “no competition”
CR licensing paradigm DOH has established that has no basis in the statute, DOH
will award Curaleaf the grower processor permit it had no chance of winning on a
competitive basis in Phase I, the special dispensary pennit that allows “up to six
dispensaries (as opposed to three under the regular licenses”) id., and CR status,
simply because Curaleaf already has a relationship with a prestigious medical
school/hospital and thus will be the lone applicant for its position.
28.

The insertion of the ACRC into the CR approval process, the “pay to

play” concerns it raises that a CR applicant is able to secure DOH approval based on
kickbacks to the ACRC instead of the merit of its ability to operate a medical
marijuana grower/processor and dispensary dedicated to clinical research, and the
resulting unlawful delegation to a private entity of DOH’s responsibility to issue
13

 grower/processor and dispensary permits to the best candidates, are phenomena
created entirely by DOH’s Revised Chapter 20 Regulations, are not required by, and
indeed are inconsistent with the Act.
29.

DOH’s Revised Chapter 20 Regulations thus result in:
a.

A violation of Article 2, Section 1 of the Pennsylvania
Constitution;

b.

The inability of potential CRs other than the entity the ACRC
secretly anointed to even apply to DOH for CR status;

c.

The absence from the CR permit issuance process of any
semblance of the competitive process that characterized the
Phase I and II application processes for the 50 dispensary permits
and 25 grower/processor permits authorized under Chapter 6 of
the Act;

d.

The fact that ACRCs have already entered contractual
relationships with entities that applied for Chapter 6 permits in
Phases I and II and were denied;

e.

The likelihood that the most highly qualified grower/processor
and dispensary permit candidates will not be involved in Chapter
20 research, thereby frustrating the legislature’s desire to

14

 promote “high quality research into the effectiveness and utility
of medical marijuana,” Section 102 (3)(iii); and,
f

DOFFs well-founded concern, as evidenced by its regulations
designed to uncover kickbacks paid to ACRCs by prospective
CRs and to prohibit them, that factors other than a prospective
CR’s merit will influence an ACRC’s choice of CR.

Chapter 20 research goals stwnied
30.

DOH’s deviation from Chapter 20’s research goals in its Revised

Chapter 20 Regulations will bestow super-permits on CRs in exchange for what need
only be little or minimal contribution to much-needed research.
31.

To obtain CR status, the Revised Chapter 20 Regulations require that,

with respect to the essential objective of furthering research studies, a CR applicant
provide nothing more than a “description of the research projects the applicant and
the certified ACRC intend to conduct.” 28 Pa. Code

§ 121 1.27(b)(7)(ii) (emphasis

added).
32.

To retain CR status, the Revised Chapter 20 Regulations require only

similar promises of intent with respect to the essential objective of furthering
research: DOH “will not renew an approval” if it determines that “none of the
dispensary locations” [i.e., not a single one of the 6 permitted] “are participating in
an approved research project,” and the CR “does not intend to commence any
15

 additional approved research projects within the first six months following the
approval of its application for renewal.” 28 Pa. Code § 1211.3 1(c).
33.

Stated differently, the Revised Chapter 20 Regulations require the CRs

to dedicate only 8 percent of their business efforts to research.

PETITIONER’S CLEAR RIGHT TO RELIEF
34.

The Revised Chapter 20 Regulations create a CR selection process that

violates the Pennsylvania Constitution. By making the “has a contractual
relationship with an ACRC” requirement a pre-requisite for a CR application, DOH
has delegated its governmental duty to vet and approve medical marijuana
grower/processor and dispensary applicants for permits, in violation of Article 2,
Section 1 of the Pennsylvania Constitution. The Act provides for up to eight CRs.
35 P.S § 10231.2002.

Under the Revised Chapter 20 Regulations, the primary

criterion for CR status is that the CR applicant have a contract with an ACRC, and
the CR applicant may include only one ACRC in its CR application. 28 Pa. Code §
1211.27(c). The result is that the ACRC determines by privately-negotiated contract
the single entity that may apply to be that ACRC’s CR. Instead of exercising its
discretion to select the best permittee from a pool of applicants, DOH will be faced
with a fuji’ uccompli

—

accept the ACRC’s choice or deny the CR’s application.

Tellingly, nothing in the Revised Chapter 20 Regulations would permit DOH to
reject a CR application based on the conclusion that the CR is not fit to operate a
16

 grower/processor or dispensary facility. 28 Pa. Code

§ 1211.30 Indeed, the Revised

Chapter 20 Regulations’ only stated reason for rejecting a CR applicant is failure to
comply with DOH’s measures vainly designed to combat the justifiable “pay to
play” concern

—

that is, the concern that would-be CRs or their affiliates will

circumvent the rigorous application process applicable to all other applicants and
buy their way into medical marijuana grower/processor and dispensary permits by
making direct or indirect financial payoffs to ACRCs in order to secure the pre
requisite ACRC contract. 28 Pa. Code

§ 1211.30 (b); see also 28 Pa. Code §

1211.34 (prohibition); 1211 .27(b)(4) (CR affidavit requirement); 1211 .25(c)(3)
(ACRC affidavit requirement).
35.

The Revised Chapter 20 Regulations also fail to track the Act’s

requirement that CRs engage in meaningful robust research. Instead, the Revised
Chapter 20 Regulations, like the Original Chapter 20 Regulations the court enjoined,
demand “only a minimal commitment to research to obtain and retain a permit” see
Levine I, Exhibit B to the Petition for Review at 33-34, notwithstanding the
legislature’s “intent to implement a robust research program” for medical marijuana.
Levine I, Exhibit B to the Petition for Review at 49.

PETITIONER’S MEMBERS’ IRREPARABLE HARM
36.

DOH’s Revised Chapter 20 Regulations cause immediate and

irreparable harm to Petitioner’s members by: (a) eliminating their opportunity to
17

 apply to obtain CR status on a level playing field administered by DOH rather than
by ACRCs; (b) allowing would-be CRs already selected by ACRCs but that
presently lack the necessary grower/processor and/or dispensary permits (several of
whom were denied the permits DOH awarded Petitioner’s members because of poor
quality proposals) to avoid the searching scrutiny DOH brought to bear in awarding
the 25 grower/processor and 50 dispensary permits from among hundreds of
applicants; and (c) allowing CRs to obtain and retain CR status by engaging in only
a minimal level of research, to the detriment of Petitioner and its members who
depend on robust research to maintain and increase the use of medical marijuana by
Pennsylvania patients.
37.

DOH’s Revised Chapter 20 Regulations also cause immediate and

irreparable harm to Petitioner and its members because the CR process they initiate,
once under way, will not be easily halted, reversed, and unwound after a future ruling
on the merits invalidating the Revised Chapter 20 Regulations.
THE BALANCE OF HARMS
38.

Petitioner and its members will suffer greater injury if a preliminary

injunction is refused than DOH or any other interested party will suffer if it is
granted. If DOH moves forward with its CRJACRC process now, Petitioner and its
members will be irreparably harmed.

In contrast, if the CRJACRC process is put

on hold pending resolution of the constitutional and important CR/ACRC issues
18

 Petitioner raises, the only effect will be to delay implementation of DOH’s watereddown Chapter 20 research program while the court considers whether private
ACRCs are constitutionally permitted to select CRs and whether the statute permits
the watered-down research requirements in DOH’s Revised Chapter 20 Regulations.
39.

It is crucial to the stability of Pennsylvania’s nascent medical marijuana

industry and the public interest that the gulf between Chapter 20’s statutory
provisions and DOH’s Revised Chapter 20 Regulations and the uncertainty thereby
created be addressed and resolved before DOH issues CR permits, and CR
permittees build out their facilities and commence operations. This balancing weighs
heavily in favor of granting a preliminary injunction.
RESTORATION OF STATUS OUO
40.

A preliminary injunction will restore all interested parties to the status

quo that existed before the Revised Chapter 20 Regulations were issued. DOH’s
Revised Chapter 20 Regulations were issued on August 18, 2018. CR applications
were made available on October 4, 2018 and filed as of November 8, 2018.
Petitioner has timely initiated its challenge to the Revised Chapter 20 Regulations
and this request to enjoin them before DOH issues CR permits.

Issuance of a

preliminary injunction now will not prejudice anyone but will instead restore the
parties to the status quo that existed before August 18, 2018.

19

 SUITABILITY OF INJUNCTIVE RELIEF
41.

A preliminary injunction will abate the harm caused by the Revised

Chapter 20 Regulations.

THE PUBLIC INTEREST
42.

A preliminary injunction enjoining the Revised Chapter 20 Regulations

is in the public interest. The public interest as expressed by the General Assembly
is to foster “high quality” research in medical marijuana and its uses. DOH’s Revised
Chapter 20 Regulations, as promulgated, will do little to advance that goal. The goal
of high quality research that can and should be accomplished by a properly structured
formal CWACRC program is worth the short wait that will be occasioned by the
grant of a preliminary injunction. In the meantime, many of the Petitioner’s members
are currently engaging in research.
NOMINAL BONI3 REOUESTED
43.

Petitioner requests that the bond required by Pa. R.C.P. 153 1(b) be set

at the nominal level of S100. No entity has yet been approved as a CR and any
resources expended by prospective CRs constitute resources that needed to be
expended regardless of Petitioner’s lawsuit, such that no entity will sustain
reasonably foreseeable damages in the event it is later determined that the requested
preliminary injunction was wrongfully issued.

20

 RELIEF FROM AUTOMATIC SUPERSEDEAS
44.

Petitioner requests that the court specify in its order granting a

preliminary injunction that that no appeal from the order will act as an automatic
supersedeas under Pa. R.A.P. 1736(b). The applicable standards for vacating a Rule
1736(b) supersedeas are substantially identical to those for granting a preliminary
injunction. See Department of Enviromnental Resources v. fit belirer, 614 A.2d 199
(Pa. 1989). Accordingly, the Court’s grant of a preliminary injunction demonstrates
that Petitioner would be entitled to have any Rule 1736(b) supersedeas vacated.
Under the circumstances of this case, in the interests of judicial economy, and
consistent with the court’s action in Levine I, Petitioner respectfully requests that the
Court make that ruling coincident with its order granting preliminary injunctive
relief.
WHEREFORE, Petitioner respectfully requests that the court preliminarily
enjoin enforcement of the Revised Chapter 20 Regulations as they relate to CRs, and
in particular 28 Pa. Code § 1211.27, 1211.28, 1211.30, 1211.31. l2ll.,32, and
1211.34 as set forth in Petitioner’s Petition for Review.

Kevin YMcRebn, I.D. i’{o. 30428
Judith D. Cassel I.D. No. 209393
Dennis A. Whitaker, 1.D. No. 53975
Micah R. Bucy, I.D. No. 320196
21

 Hawke McKeon & Sniscak, LLP
100 North Tenth Street
Harrisburg, PA 17101
Telephone: 717-236-1300
Facsimile: 717-236-4841
kjrnckeon@hrnslegal.com
jdcassel @hms1eal.com
dawhitaker@hrnslegal.com
rnrhucy@hms1ea1 .com
Counsel for Petitioner Medical
Marijuana Advocates for Research
DATED: November 27, 2018

22

 CERTIFICATE OF COMPLIANCE WITH PUBLIC ACCESS POLICY
1 certify that this filing complies with the provisions of the Public Access
Policy of the Unified Judicial System of Pennsylvania: Case Records of the
Appellate and Trial Courts that require filing confidential information and
documents differently than non-confidential information and documents.
Respectfully submitted,

Kevin I. jcKàn, i.5%o. 30428
Judith tfCassel I.D. Nb. 209393
Dennis A. Whitaker, I.D. No. 53975
Micah R. Bucy, ID. No. 320196
Hawke McKeon & Sniscak, LLP
100 North Tenth Street
Harrisburg, PA 17101
Telephone: 717-236-1300
Facsimile: 717-236-4841
kjrnckeon@hmslegal.com
jdcassel @hmse%al.corn
dawhitaker@hmslegal.com
mrhucy @hms1eal.corn
Counsel for Petitioner Medical
Marijuana Advocates for Research
DATED: November 27, 2018

23

 EXHIBIT 1

PalliaTech holds a producer license and a processing license for adult-use. PalliaTech operates a 20,000
square foot outdoor cultivation center and an adjacent 17.002 square loot indoor facility for large scale
C02 extraction, distillate and formulated products manufacturing. Sales of outdoor flower and pre-rolls
commenced in January 2016. Sales of concentrates and oils commenced in April 2017. Sales of indoor
flower commenced in June 2017. In July 2017, PalliaTech acquired a dispensary, which launched
operations in Portland, Oregon at the end of 2017.
Pennsylvania Operations
Pennsylvania’s medical cannabis program was introduced in April 2016 when Governor Tom Wolf
signed into law 58 3 “Medical Marijuana Act,” which legalized medical cannabis oils for patients with
certain qualifying conditions. The law also called for a class of licenses, called “clinical registrant”
licenses, whereby accredited medical institutions in the State can partner with medical cannabis
companies to conduct research. In mid-June 2017, the Pennsylvania Department of Health (“PADOH”)
awarded licenses to 12 grower/processors. In late June 2018, the PADOH awarded licenses to 27 different
entities to open a total of 52 dispensaries across the State. In February 2018, the first dispensaries opened
to patients.
In April 2018, the PADOH approved flower as a permitted medical cannabis product offering, and
dispensaries began to offer flower to patients in August 2018. In May 2018, a Commonwealth Court
judge halted the Department of Health’s planned “clinical registrant” program whereby up to eight
Pennsylvania medical schools would partner with licensed medical cannabis organizations to conduct
research. In June 2018, Governor Wolf signed a bill to re-implement the clinical registrant program.
Regulations for this program are in development. In July 2017, the PADOH licensed 13 additional
grower/processors.
There are two primary classes of licenses: licenses to grow and process medical cannabis products, and
licenses to dispense medical cannabis products to patients. Grower/processors wholesale products to
dispensaries. Originally, only oil-based formulations were permitted, though flower was approved as a
product offering in April 2018.
Though it is not currently licensed in Pennsylvania, PalliaTech has partnered with an accredited medical
school to obtain a “clinical registrant” license in Pennsylvania. Pennsylvania’s medical cannabis program
has created this class of license to promote cooperation between industry and academia in the research of
medical benefits of cannabis. Under the Medical Marijuana Act and the regulations governing the clinical
registrant program, published on August 18, 2018, this license will permit a clinical registrant to operate a
cultivation and processing center as well as up to six dispensaries (as opposed to three under the regular
licenses). Only a private operator that has entered into a research contract with certain in-state medical
schools is eligible to receive a clinical registrant license. The first of such licenses are expected to be
issued in the Fall of 2018. The Company anticipates that it will be operational in Pennsylvania in QI
2019. To support its expected presence in Pennsylvania, the Company has leased a 49,200 square foot
production facility in King of Prussia, Pennsylvania.
Additionally, the Company has licensing applications pending in the States of California, Connecticut,
Rhode Island, and Virginia

Components of Our Results of Operations
Revenue

Retail and Wholesale Revenue

 VERIFICATION
I, Krista Krebs hereby state that I am a principal of Keystone Center of
Integrative Weilness, a Phase I medical marijuana dispensary permit holder, and
Parea BioSciences, LLC, a Phase H grower/processor permit holder, both of which
are members of Medical Marijuana Advocates for Research (MMAR), that I am
an officer of MMAR authorized to speak on behalf of MMAR and its members,
and that the facts above set forth in the foregoing application for special relief in
the nature ofa preliminary injunction are true and correct to the best ofmy
knowledge, information and belief. I understand that the statements herein are
made subject to the penalties of 18 Pa.C,S.

§

4904 (relating to unswom

falsification to authorti.s).

sta Krebs

 VERIFICATION
1, Michael Badey hereby state that I am a principal of Chamounix Ventures,
LLC, a Phase I medical marijuana dispensary permit holder, and that I am a
member of MMAR authorized to speak on behalf of MMAR and its members, and
that the facts above set forth in the foregoing application for special relief in the
nature of a preliminary injunction are true and correct to the best of my knowledge,
information and belief. I understand that the statements herein are made subject to

the penalties of 18 4904 (relating to unsworn falsi?cation to authorities).

  
Michael Bar?ey/

 

Date: November 27, 2018

 

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Medical Marijuana Advocates for
Research,

Petitioner,
v.

:

No.

MD 2018

Rachel L. Levine, MD, Secretary,
Pennsylvania Department of Health,

Respondent.

CERTIFICATE OF SERVICE
I hereby certifS’ that I am on this day serving a true and correct copy of the
foregoing document upon the persons and in the manner specified below, which
service satisfies the requirements ofPa. R.A.P. 121 and Pa. R.A.P. 1514(c):

VIA CERTIFIED MAIL
Hon. Rachel L. Levine
Secretary, Pennsylvania Dept. of Health
Pennsylvania Dept. of Health
Health and Welfare Building
625 Forster Street
Harrisburg, PA 17120

Dated:

November 27, 2018

Hon. Josh Shapiro
Pennsylvania Office of Attorney General
Commonwealth of Pennsylvania
16th Floor, Strawberry Square
Harrisburg, PA 17120

S