The Do’s and Don’ts of Leasing Medical Marijuana Dispensaries in Pennsylvania – JD Supra

Nearly five years ago, Pennsylvania Governor Tom Wolf signed into law Pennsylvania’s Medical Marijuana Act (Act 16). Since that time, the Pennsylvania Department of Health (DOH), the agency responsible for issuing licenses under the Act, has issued 50 medical marijuana dispensary licenses, allowing for 150 dispensaries. This has created a whole new class of commercial real estate in Pennsylvania. Medical marijuana dispensaries in Pennsylvania are doing a brisk business. However, this business is not without its risks and challenges.

Regulatory Controls under Act 16

Act 16 imposes extensive controls over the location and physical characteristics of dispensaries. For example, pursuant to Act 16:

A dispensary may not be located within 1,000 feet of the property line of a public, private or parochial school or a day care center. A dispensary may only be situated in an indoor, enclosed and secure facility. A dispensary may not exist on the same site as a facility used for growing and processing medical marijuana.

Moreover, many local municipalities impose even more stringent limitations on dispensary properties. In Philadelphia, for example, in addition to the limitations imposed by Act 16, a dispensary cannot be located within 500 feet of (1) a house of worship, (2) a playground, (3) a public library, (4) a recreational center or (5) a public swimming pool.

Therefore, properties that conform to the requirements of Act 16 as well as local requirements tend to be very hard to find and command very high rents.

Prohibitions under Federal Law

Despite the fact that growing, selling and using marijuana (for certain medical purposes) is permitted in Pennsylvania under Act 16, these activities, with very limited exceptions, are still illegal under federal law. Marijuana is classified as a “Schedule 1” drug under the federal Controlled Substances Act (CSA) of 1970. Schedule 1 drugs

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