Pennsylvania was the 24th state to pass legislation approving medical marijuana. Its medical sales of the drug should eclipse $980 million by 2020. Pictured: Varieties of marijuana flowers are displayed at medical marijuana dispensary Kaya Shack in Portland, Oregon. (Gosia Wozniacka, Associated Press)

Pennsylvania medical marijuana is still brand-new, but this biz isn’t waiting

PITTSBURGH — From the start, Lalit Chordia wants this to be clear: His manufacturing outfit in O’Hara is not a medical marijuana company.

It just happens that a high-pressure extraction method long mastered by Thar Process Inc. works wonders in producing treatments from the plant — namely pills, Chordia said.

Now that Pennsylvania has approved medical marijuana in limited forms — including those pills — he wants his business to stake a prime spot in the state’s emerging production market for the drug. The company president figures Western Pennsylvania suppliers for his extraction systems could add a couple of dozen workers to meet new demand, not including positions that Thar Process might add to its own payroll of about 30 workers.

“Our objective would be that, rightfully, we should be the largest supplier of technology to every medical marijuana facility in Pennsylvania,” said Chordia, who estimated the therapy could drive more than a fifth of business for Thar Process. “It’s not going to be a significant part of what we do, but what we would like is to be a significant part of what happens in the marketplace.”

He’s not alone. As many as 5,000 marijuana-related jobs could crop up statewide over the next five years, up to half of them in ancillary operations such as Thar Process and its suppliers, according to the nonprofit Pennsylvania Medical Cannabis Society in Harrisburg.

“A lot of firms could realize new revenue streams by taking their existing products and moving them over to cannabis,” said Russ Cersosimo Jr., the group’s director of strategic alliances. He said companies that make packaging, secure safes and lighting are among those that could benefit.

To explore the opportunities, the cannabis society is hosting professional events across the state, drawing 90 to 120 people a pop. Some drive more than six hours for the gatherings, which attract a cross-section of real estate agents, investors, attorneys, growers and health care providers, Cersosimo said.

Advocates for the drug hope to combat such stigma with Pennsylvania’s medical marijuana law, which Gov. Tom Wolf signed April 17. The legislation took effect last month, but state officials have said eligible Pennsylvania adults won’t have ready access to the treatments until products are available inside state borders.

The process could take up to two years as the state develops regulatory and distribution infrastructures for medical marijuana, which will be available only as pills, oil, topical applications, tinctures and similar forms. The law does not allow patients to smoke or grow the plant.

Rather, the state Department of Health will license as many as 25 grower-processor operations to start, according to the law known as Act 16. Applications for the businesses should be available by year’s end, state health secretary Karen Murphy has said.

Plants must be grown indoors, while product distribution will be limited to no more than 150 dispensary locations. Those dispensaries and grower-processers could fuel about 2,500 direct jobs over the next five years — at least half the overall job growth forecast from medical marijuana statewide, according to industry projections.

“Where these are located and how they’re set up (affects) the economic impact in terms of job creation,” said Gregory Sehr, a Buffalo, N.Y.-based consultant.

It isn’t clear yet how Pennsylvania may divvy up the licenses; the law calls for the state to be divided into at least three regions.

More jobs than New York?

But industry observers said Pennsylvania should expect more marijuana-related jobs than in New York, where Sehr said tight regulations have contained direct job creation. He estimated the figure at 120 or fewer in New York’s 20 dispensing and five manufacturing operations for medical marijuana, which lawmakers there approved in 2014.

A more generous list of qualifying medical conditions should make Pennsylvania a larger market for the therapy, said Taylor West, deputy director at the National Cannabis Industry Association in Denver.

The Pennsylvania law includes 17 conditions that can make patients eligible, including autism, cancer and glaucoma.

Pennsylvania was the 24th state to pass legislation approving medical marijuana. Its medical sales of the drug should eclipse $980 million by 2020, nearly four times the medical sales forecast in New York for that year, according to Washington, D.C.-based New Frontier.

At Thar Process, Chordia urged manufacturing standards that emphasize quality. His company has already built the largest piece of equipment for marijuana extraction in Colorado, he said.

The company’s stainless steel systems put carbon dioxide under thousands of pounds of pressure, delivering high-end concentrates from almonds, algae, soybeans and other plants. Known as supercritical fluid extraction, the clean approach steers clear of hydrocarbon solvents that may leave behind toxic traces, Chordia said.

“The health department should look at the technology and make sure they are promoting the right technology” in manufacturing medical marijuana, he said.

“Ultimately, the quality of the product is based on the quality of technology that’s used to produce” it.


Via AP Member Exchange
Information from: Pittsburgh Post-Gazette