Medical pot has yet to impact agriculture business

HARRISBURG – There was little obvious sign of the newest addition to the state’s agricultural landscape at the Pennsylvania Farm Show on Monday.

While the costs of cultivating medical marijuana make it an unlikely business venture for most farmers, its production is expected to get a lot more notice within the industry.

Pennsylvania became the 24th state to legalize medical marijuana for the treatment of 17 medical conditions last April. The Department of Health has been rolling out regulations, with the goal of having the drug available for patients next year.

The next steps of a burgeoning industry that grows, processes and dispenses the drug will be hard to ignore.

“It’s coming,” said Henry Nickerson, vice president of project delivery at Integrated Agriculture Systems, at the company’s Farm Show booth Monday afternoon.

The company develops hydroponic systems for vertical growing and urban farming, and trains growers to use the equipment. It’s the type of technology that could be important for medical marijuana, which by law must be harvested indoors in a secure facility.

The company’s executives aren’t interested in getting a grower’s permit or operating a dispensary, Nickerson said. But they would like to work with growers develop systems used to produce medical marijuana.

“We hear questions,” he said, “quite a bit.”

As the state rolls out plans and rules for the industry, he added, “there is a lot of red tape.”

While the company may not count too heavily on medical marijuana, he said, “We are ready to deploy.”

The Pennsylvania Medical Cannabis Society, a trade group representing potential growers and dispensers, estimates that legalized medical marijuana will help 250,000 patients and create more than 2,500 jobs.

Mark O’Neill, a spokesman for the Pennsylvania Farm Bureau, said there was intense interest among farmers eager to learn about growing medical marijuana when it was legalized last April.

But for most farmers, the buzz over medical marijuana was killed by financial requirements for growers and processors, he said. It costs $10,000 just to apply for a grower’s permit. Once an application is approved, a grower has to chip in another $200,000 for the permit, itself, while showing it can access $2 million for capital — including $500,000 in the bank.

Based on experiences of other states, O’Neill said, there is no doubt that upfront costs will be recovered.

Still, he added, “For most farmers, that’s an impossibility. I don’t know any farmers who have indicated they are going to apply.”

Permits will likely go to investors and other entrepreneurs, he said.

The state plans to initially offer two permits for growers in each of six regions across the state. Applications for growers and dispensaries will be available Jan. 17.

The state is expected to announce who will get permits this summer.

The Farm Show is the nation’s largest indoor agricultural event, featuring 6,000 animals, 10,000 competitive exhibits, and 300 commercial exhibitors. It continues through Saturday.

Despite the concerns raised by the Farm Bureau, there will be no shortage of competition, said Tom Santanna, a lobbyist for worked to legalize medical marijuana in Pennsylvania.

“They expect 900 different applicants,” he said, including those interested in being growers and those interested in operating the 27 dispensaries planned across the state.

John Finnerty covers the Pennsylvania Statehouse for CNHI’s newspapers and websites. Reach him at jfinnerty@cnhi.com

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