In the first action of its kind, the Pennsylvania Department of Health, Office of Medical Marijuana regulators refused to renew Agrimed Industries’ grow process permit for violating governing production and security regulations following a surprise inspection and cease and desist order served on the company in July.

Agrimed won its permit in July 2017 and commenced operations in February 2018, even though its processing equipment was not operational and it could not ship product to dispensaries. In addition, the company did not employ industry standard product tracking systems and was unable to produce records establishing what happened to the product it grew as required by the Medical Marijuana Act (MMA). It similarly did not utilize and maintain state of the art security systems. For example, its security cameras were nonfunctional, rendering them unable to produce security footage depicting what happened to the product when it needed to do so.

Under the cease and desist order entered July 1, the company was therefore only permitted to continue to grow to cultivate new strains. It was prohibited from removing anything from the plants without a department inspector on hand and was not permitted to deactivate its security equipment. In light of these on-going violations of the MMA, Agrimed’s permit was not renewed. Without a permit, Agrimed is required to dispose of any remaining seeds, immature plants, and products under the direct supervision of the department.

Careful planning to develop consistent policies and procedures to govern the manufacture of medical marijuana, track it, secure it, and remain compliant with reporting obligations is required under the MMA. Regulatory compliance simply cannot be ignored, and as this Agrimed revocation demonstrates, is key to maintaining licensure and running a successful business in this space.

Marijuana is still classified as a Schedule I controlled substance by the U.S. Drug Enforcement Agency, and as such, it remains a federal crime to grow, sell and/or use marijuana. Any content contained herein is not intended to provide legal advice to assist with violation of any state or federal law.