Jennifer L. Malik, left, and Krista-Ann M. Staley, right, of Babst Calland Clements & Zomnir.

In 2016, Pennsylvania joined several other states in enacting legislation legalizing the use or possession of medical marijuana within its borders. Inherent in adopting this legislation is the regulation of the various retailers and manufacturers charged with supplying legal green to licensed users of medical marijuana. Now that the commonwealth has legislated the “how” of medical marijuana use, local governing bodies are taxed with legislating the “where.” The following addresses state and local regulation concerning the zoning of the medical marijuana industry.

State Regulation of Medical Marijuana Organizations

 The Medical Marijuana Act (the act), 35 P.S. Section 10231.101 et seq., authorizes the Pennsylvania Department of Health (the department) to issue permits to “medical marijuana organizations” (MMOs), bifurcated by the act into two categories—namely dispensaries and grower/processors. As the terms suggest, dispensaries are authorized by the department to dispense medical marijuana and grower/processors are permitted by the department to grow and process medical marijuana. The act required the department to divide the commonwealth into regions and to regulate the number of permits issued per region. As a result, the department essentially regulates the amount of medical marijuana grown, manufactured and sold in each region. (The act required the department to establish at least three regions and the department actually established six regions). The department is initially only permitted to issue 25 permits to growers/processors and 50 permits to dispensaries statewide. In addition to the limited number of permits available, stringent state-mandated application requirements and hefty fees (i.e, an initial application fee of $10,000 for grower/processors and $5,000 for dispensaries; a first-year permitting fee of $200,000 for grower/processors and $30,000 for dispensaries; and additional renewal permitting fees) further limit MMO locations in the commonwealth.

Under the act, grower/processors may only conduct their operations within an indoor, enclosed, secure facility equipped with an electronic locking system and electronic surveillance. Dispensaries are also only permitted to operate in an indoor, enclosed, secure facility and may not operate at the same site of a grower/processor. The act requires each MMO to implement an electronic tracking system to monitor inventory and to surveil the premises.

The act requires that grower/processors meet the same municipal zoning and land use requirements as other manufacturing, processing, and production facilities that are located in the same zoning district. Dispensaries must meet the same municipal zoning and land use requirements as other commercial facilities that are located in the same zoning district. In addition, a dispensary is not permitted to be located within 1,000 feet of the property line of a public, private or parochial school or day care center.

Regulation of MMOs at the Local Level

After passage of the act, local governments across the commonwealth amended their zoning ordinances to mandate additional requirements governing MMO operations above and beyond those required at the state level. A survey of various local zoning ordinances regulating MMOs revealed the following typical regulations: conditional-use approvals required for operations occurring in certain zoning districts, minimum lot-size requirements for grower/processors, setback requirements from the nearest property line, additional setback requirements from schools, daycare facilities, and gambling facilities, buffer zones, fencing requirements, regulations concerning emissions from grower/processors, lighting restrictions, parking requirements, prohibitions against outdoor seating, singular entrances for dispensaries, permitted hours of operations, landscaping requirements, square footage limitations and prohibiting consumption of medical marijuana on the premises. Another common local regulation prohibits MMOs from operating in a trailer, cargo container, mobile or modular unit, mobile home, recreational vehicle or other motor vehicle—representing local governments’ recognition of the possible risks involved with a mobile MMO. Additionally, several ordinances prohibit drive-through and exterior sales of medical marijuana.

One Toke Over the Line

 Zoning requires local governments to walk a narrow line—balancing the rights of a private property owner to use his or her own land lawfully while considering the general health, safety and welfare of the community. Naturally, the medical marijuana industry moving into the neighborhood will spark the attention of many constituents, given the industry’s very recent legality and the historical and cultural associations with marijuana. Some constituents may feel that an MMO in their area may attract crime and that the legalization of medical marijuana may be the catalyst to the legalization of recreational marijuana. With these considerations in mind, the following are some general considerations to take into account when considering zoning regulations applicable to MMOs.

An outright ban on MMOs is likely illegal. The Municipalities Planning Code (MPC), the local zoning enabling legislation, authorizes a challenge to the validity of a zoning ordinance when its provisions prohibit or unduly restrict a legitimate use, 53 P.S. Section 10916.1. Additionally, Pennsylvania courts have held that an ordinance that prohibits a lawful use throughout the municipality or is duly restrictive is unconstitutional, see Hock v. Board of Supervisors of Mount Pleasant Township, 622 A.2d 431, 433 (Pa. Cmwlth 1993). Consequently, banning MMOs is not permissible no matter the level of disapproval of the use in the community.

Additionally, even zoning regulations that fall short of an outright ban on MMOs should be executed with caution. The act itself explicitly provides that grower/processors meet the same municipal zoning and land use requirements as other manufacturing, processing and production facilities in the area. Likewise, dispensaries must meet the same municipal zoning and land use requirements as other commercial facilities within the area. While not yet addressed by the courts, there is an argument that the act would preempt any local ordinance from requiring grower/processors to comply with stricter requirements than other manufacturing/processing uses or dispensaries to comply with stricter requirements than other commercial uses. See generally, Mars Emergency Medical Services v. Township of Adams, 740 A.2d 193, 196 (Pa. 1999) (a municipal ordinance cannot be sustained to the extent that it is contradictory to, or inconsistent with, a state statute). Further, the act contains a provision stating that an MMO shall not be “subject to arrest, prosecution or penalty in any manner, or denied any right or privilege, including civil penalty or disciplinary action by a commonwealth licensing board or commission, solely for lawful use of medical marijuana or manufacture or sale or dispensing of medical marijuana.” While there have been no cases to date, it is possible that an overzealous zoning ordinance could amount to a violation of the act.

Another consideration to keep in mind is whether the act is pre-empted by federal law, i.e., the Controlled Substance Act (CSA), 21 U.S.C. Section 801, et seq., the Americans with Disabilities Act (ADA), 42 U.S.C. Section 12101 et seq., and the Food Drug and Cosmetic Act (FDCA), 21 U.S.C. Section 301, et seq.. Other jurisdictions that have considered the issue have found that their state medical marijuana statutes are not preempted by the CSA, ADA, or FDCA; however, Pennsylvania has not yet had occasion to decide this issue. See generally, Noffsinger v. SSC Niantic Operating ,273 F.Supp.3d 326 (D. Conn. 2017); Chance v. Kraft Heinz Foods, 2018 WL 6655670, No. K18C-01-056NEP (Del. Super. Ct. 2018); Callaghan v. Darlington Fabrics, 2017 WL 2321181, No. PC-2014-5680 (R.I. Super. 2017).

The most prudent course for local governing bodies would be to mirror the act whenever possible when enacting zoning ordinances affecting MMOs. Wherever possible, similar zoning rules and standards should be applied to grower/processors as other manufacturing, processing and production facilities in the municipality. Likewise, the same zoning rules should be applied to dispensaries as other commercial uses in the district. One-thousand foot setbacks from schools are specifically delineated in the act, consequently, attempts to increase those setbacks will likely be pre-empted.

Krista-Ann M, Staley is a shareholder and Jenn L. Malik is an associate in the public sector services and energy and natural resources groups of the Pittsburgh law firm of Babst, Calland, Clements & Zomnir. Staley’s practice includes a variety of local regulatory matters, with a focus on land use. Malik focuses her practice on zoning, subdivision and land development, and municipal ordinance construction and enforcement.