NOTHING IN THIS DOCUMENT IS INTENDED OR SHALL BE CONSTRUED AS ADVICE TO PARTICIPATE IN, OR COUNSEL WITH RESPECT TO, CRIMINAL OR FRAUDULENT ACTIVITIES. POSSESSION, DISTRIBUTION, AND SALE OF MARIJUANA IS A SERIOUS CRIME UNDER FEDERAL LAW, AND ENGAGING IN THOSE ACTIVITIES WITHOUT REGISTRATION UNDER THE PENNSYLVANIA MEDICAL MARIJUANA ACT, 35 P.S. §§ 10231.106 ET SEQ., IS A SERIOUS CRIME UNDER PENNSYLVANIA LAW. NOTHING HEREIN SHALL BE CONSTRUED AS ADVICE TO VIOLATE ANY SUCH LAW.

In the two years since the passage of Pennsylvania’s Medical Marijuana Act (the “Act”), municipalities have had a number of concerns. Given the stigma attached to marijuana in general, as well as illegality under federal law, some communities still hesitate to embrace even medical use of the drug, citing safety concerns. Conversely, other communities have welcomed medical marijuana legalization because of the positive economic impact. In any event, municipalities and their solicitors should continue to stay abreast of developing law under the Act as well as how Phase II of the Act’s permit application process will impact municipal zoning and land use.[1]

Phase I of the permit application process for Dispensaries and Growers/Processors went live on January 17, 2017, and the Department of Health (“Department”) accepted applications until March 20, 2017. Over 900 applicants competed for these permits, but the Department only granted 12 Grower/Processor permits and 27 Dispensary permits.[2] The initial impact of these permit grants is evident as, to date, 25,573 patients have registered for Pennsylvania’s Medical Marijuana Program; 7,000 people have purchased a medical marijuana card after being certified as having one of the 17 qualifying medical conditions; and 6,683 people have made purchases, with these numbers only expected to increase.

On April 5, 2018, Phase II applications became available on Pennsylvania’s medical marijuana website, with May 17, 2018 noted as the application deadline.[3] For Phase II, the Department intends to issue up to 13 Grower/Processor permits and up to 23 Dispensary permits.[4] Applicants and municipalities alike should understand the Act and accompanying temporary regulations.[5] Importantly, permit applications that were previously submitted in Phase I will not be considered for a permit in Phase II. Rather, an applicant must submit a new, timely application package with the required fees to be considered for a permit in Phase II.

Specifically, for Growers/Processors, the Department intends to issue one Grower/Processor permit to the highest scoring, most qualified, and eligible applicant without regard to location. Like Phase I, for the remaining 12 Grower/Processor permits, the Department intends to issue up to two Grower/Processor permits in each of the six (6) existing Medical Marijuana Regions.

For Dispensaries, the primary Dispensary location may be in any county within the Medical Marijuana Region, and an applicant has the option of listing two additional Dispensary locations on the permit application for approval. However, while the second and third locations must be within the same Region as the primary location, the second and third locations are not permitted to be in the same county as the primary location, nor are the second and third locations themselves permitted to be in the same county.

Following Phase I applications and permit grants, more Pennsylvania municipalities have amended their zoning ordinances to allow for Growers/Processors and Dispensaries. While municipalities have taken a variety of approaches as to zoning, Growers/Processors are generally zoned as some variety of light industrial and/or commercial, and Dispensaries are usually permitted in commercial-type districts and even certain light industrial districts.

Obviously, municipalities and their solicitors must stay keenly aware that medical marijuana facilities are quite unlike other businesses. The customer in this scenario is purchasing a highly regulated substance that is still illegal under federal law. As such, these facilities each have specific security and safety requirements that are more heightened than those of more common businesses, such as comprehensive background checks and commercial-grade security and surveillance systems.

Overall, counsel representing municipal entities should continue to take care in not only adhering to the Act’s requirements and temporary regulations, but also in using some creativity to add additional zoning and land use restrictions where the Act is silent. Pennsylvania’s passage of the Act will only continue to impact local municipalities in the way they tailor their zoning ordinances, and municipal lawyers must stay aware of this new and constantly developing body of law.

For more information about zoning and permitting for medical marijuana, please contact Matt N. Korenoski of Strassburger McKenna Gutnick & Gefsky at (412) 281-5423 or mkorenoski@smgglaw.com.

[1] For a more in-depth discussion on background of the Act as applied to municipal zoning, please see: The Pennsylvania Medical Marijuana Act’s Impact on Municipal Zoning.

[2] For a map and table of the location of Phase I Dispensary and Grower/Processor Permittees, please see: http://www.health.pa.gov/My%20Health/Diseases%20and%20Conditions/M-P/MedicalMarijuana/Pages/Phase1.aspx#.WuCdwqJWW3j

[3] https://www.pa.gov/guides/pennsylvania-medical-marijuana-program/

[4] For more information about Phase II applications, please see: http://www.health.pa.gov/My%20Health/Diseases%20and%20Conditions/M-P/MedicalMarijuana/Documents/DOH%20-%20Instructions%20Phase%20II.pdf

[5] 28 Pa. Code Chapters 1141, 1151, 1161, 1171, 1181, 1191 and 1210.

The introduction of unmanned aircraft systems (“UAS”), known more colloquially as “drones,” into mainstream society has resulted in a significant uptick in consumer purchasing. Flying drones appeals to people. They enjoy piloting their remote control devices anywhere from their back yards to parks, fields, and farmland. However drone use is not limited to recreational purposes; various entities use drones to accomplish commercial objectives, such as news outlets and real estate agents. Drones are certainly here to stay, which only highlights the need to focus on the laws governing their use as well as local municipalities’ abilities to legislate and take enforcement action as appropriate.

In 2012, the Federal Aviation Administration (“FAA”) enacted the FAA Modernization and Reform Act (the “Act”), which contains a section that explains the law governing a type of UAS called model aircraft, otherwise known as aircraft used for a hobby or recreational purpose.[1] Section 336 of Act broadly states that the FAA may not promulgate any rule or regulation regarding a model aircraft, or an aircraft being developed as a model aircraft, subject to certain requirements, such as prohibitions on interference with any manned aircraft as well as restrictions on operating a model aircraft within five miles of an airport.[2] Additionally Section 336 of the Act defines a “model aircraft” as an unmanned aircraft that is:

(1) capable of sustained flight in the atmosphere;

(2) flown within visual line of sight of the person operating the aircraft; and

(3) flown for hobby or recreational purposes.[3]

As recently as June 28, 2016, the FAA amended Title 14 of the Code of Federal Regulations. Among other things, this section concerns the operation of model aircraft that meet the conditions of Section 101.41 of the same Part. Importantly, the definition of “model aircraft” is the same as that in Section 336 of the Act.[4] Likewise, 14 C.F.R. § 101.41 contains the same conditions for a model aircraft as Section 336 of the Act.[5]

Part 107 of Title 14 lies at the heart of the regulatory framework most relevant to municipalities as it focuses on small UAS.[6] This Part applies to the registration, airman certification, and operation of all commercial and hobby/recreational use of small UAS; however, Subsection(b)(2) exempts model aircraft from this part because Part 101 covers model aircraft.[7]       

Because Part 107 exempts FAA regulation of model aircraft, Part 107 mainly applies to commercial use of drones. Thus, municipalities may generally not regulate commercial use of drones in its airspace. Further, while a more obviously preempted issue, municipalities clearly cannot regulate the government or military use of drones. Instead, municipalities may, as long as they complies with the above regulations, regulate model aircraft, i.e., aircraft used for recreational or hobby purposes.

Via their police powers, municipalities may also take steps to enforce their drone ordinances and fashion penalties for violations of the same. Further, while municipalities must keep in mind that the FAA still has enforcement authority of its own to prevent model aircraft operators from endangering the safety of the national airspace, local law enforcement officers will oftentimes, if not always, be the first line of defense should a UAS create a safety hazard. Importantly, while the FAA does regulate in the area of commercial UAS, this does not likely prevent local municipalities from taking enforcement action against commercial UAS when they put public safety at risk in emergency scenarios. In particular, municipalities near airports should be vigilant about taking action in these circumstances given their proximity to manned aircraft.

Drones are a rapidly growing industry, further emphasizing the necessity for legal practitioners and drone users alike to keep abreast of the latest changes in federal, state, and local legislation. As drone manufacturers improvise on their products, lawmakers will surely be confronted with the challenge of tweaking existing laws, and municipalities are no different. Rather, action by local governing bodies to regulate and enforce drone usage is essential to maintaining public safety both on and off the ground.

For more information about zoning and municipal regulation of unmanned aircraft systems, please contact Matt N. Korenoski of Strassburger McKenna Gutnick & Gefsky at (412) 281-5423 or mkorenoski@smgglaw.com.

[1] PL 112-95, February 14, 2012, 126 Stat 11.

[2] PL 112-95, February 14, 2012, 126 Stat 11, Section 336(a).

[3] PL 112-95, February 14, 2012, 126 Stat 11, Section 336(c).

[4] See 14 C.F.R. § 101.1(a)(5).

[5] See 14 C.F.R. § 101.41.

[6] 14 C.F.R. § 107.1.

[7] 14 C.F.R. § 107.1.

With the passage of the Medical Marijuana Act (the “Act”) on April 17, 2016, municipalities throughout the Commonwealth have had their fair share of concerns about how this law will affect them. Given the stigma attached to marijuana in general, as well as illegality under federal law, some communities hesitate to embrace even medical use of the drug, stating concerns about safety and crime located around growers/processors and dispensaries. Conversely, other communities  see medical marijuana legalization as a tremendous benefit and look forward to the opportunity because of the positive economic impact. But regardless of whether municipalities approve of medical marijuana facilities, they inevitably still need to zone for them.

Accordingly, the Act provides zoning requirements for growers/processors and dispensaries. For instance, a grower/processor must meet the same zoning and land use requirements as other manufacturing, processing and production facilities located in the same zoning district. 35 Pa. Stat. Ann. § 10231.2107. Additionally, a grower/processor can only grow, store, harvest or process medical marijuana in an indoor, enclosed, secure facility in the Commonwealth, which includes electronic locking systems, electronic surveillance and other features required by the Department of Health. 35 Pa. Stat. Ann. § 10231.702. These additional security requirements will likely work to ease municipalities’ attitudes towards a grower/processor opening in certain areas.

Like growers/processors, the Act also provides zoning laws for dispensaries. For example, a dispensary must meet the same zoning and land use requirements as other commercial facilities located in the same zoning district. 35 Pa. Stat. Ann. § 10231.2107. Further, a dispensary is subject to numerous restrictions, some of which include the following:

35 Pa. Stat. Ann. § 10231.802. Should they desire, municipalities can also extend the above 1,000 foot boundary to other locations, such as residential districts, residential uses, and/or places of worship. Importantly, while some municipalities may want to merge growers/processors and dispensaries on the same site, the Act specifically prohibits doing so, and law firms should clarify that point for municipal clients.

While townships have taken a variety of approaches as to where and how they zone medical marijuana facilities, they are still subject to the same basic requirements. In particular, growers/processors most often result in being zoned as some variety of light industrial and/or commercial. Similarly, dispensaries most obviously comport well with commercial-type districts, but depending on the zoning ordinance, can also be located in certain light industrial districts.

Counsel representing municipal entities should take care in not only adhering to the Act’s requirements, but also using some creativity to add additional zoning restrictions where the Act is silent. Pennsylvania’s passage of the Act has impacted, and will continue to impact, local municipalities in the way that they amend and tailor their zoning ordinances, and, as such, municipal lawyers should keep abreast of this new and developing body of law.

For more information about zoning for medical marijuana, please contact Matt N. Korenoski of Strassburger McKenna Gutnick & Gefsky at (412) 281-5423 or mkorenoski@smgglaw.com.

For decades, a bright line has separated professional athletes from amateur athletes. Professional athletes are paid to play. Amateur athletes are not. Rather, the National Collegiate Athletics Association (“NCAA”) maintains that student-athletes are “students” first and “athletes” second. However, as society became more commercialized, the NCAA and the large majority of its member schools began using student-athletes’ names, images, and likenesses (“NILs”) to advertise its two most popular sports: football and basketball. And yet, while the National Football League and National Basketball Association pay its professional athletes for use of their NILs, the NCAA prohibits any NIL compensation to student-athletes, reasoning that protecting the spirit of amateurism mandates student-athletes not be paid.

Recently, however, in O’Bannon v. NCAA, the United States District Court for the Northern District of California struck a major blow to the NCAA. The O’Bannon plaintiffs included Ed O’Bannon, a former Division I UCLA basketball star, and 19 other current or former student-athletes who play or played college football or men’s college basketball between 1956 and the present. In suing the NCAA, the O’Bannon plaintiffs alleged that certain NCAA bylaws violated the Sherman Antitrust Act by prohibiting student-athletes from receiving a revenue share that the NCAA and its member schools earn from licensing student-athletes’ NILs in the media.

The District Court determined that the restraint caused anticompetitive effects in the college education market, identified as a “national market in which NCAA Division I schools compete to sell unique bundles of goods and services to elite football and basketball recruits.” Having found a restraint, the District Court placed the burden on the NCAA to show procompetitive effects of the restraint. While the NCAA offered four procompetitive benefits, the District Court only accepted two of them: (1) preserving amateurism, and (2) promoting the integration of academics and athletics.

Consequently, the burden shifted to the former student athletes to show less restrictive alternatives of accomplishing those procompetitive goals. The former student athletes offered three alternatives, but the District Court only accepted the first two: (1) raising the grant-in-aid limit to allow schools to give student-athletes grants-in-aid that cover the full cost of attendance, and (2) allowing schools to deposit a share of licensing revenue into a trust fund for student-athletes, payable after the student-athletes graduate or leave school for other reasons.

The Northern District of California ultimately ruled that the NCAA’s restrictions unreasonably restrained trade by preventing college football players and men’s college basketball players from sharing in at least some of the revenue generated by NIL use.  As a remedy, the District Court entered an injunction mandating: (1) that the overall compensation from the school that the student-athlete may receive shall not be capped below the cost of attendance;  and (2) that the revenue from NIL licensing of each individual student-athlete could be deposited in a deferred trust at no more than $5,000 for every year the student-athlete remained academically eligible.

On August 8, 2014, the NCAA appealed to the United States Court of Appeals for the Ninth Circuit, primarily arguing the importance of the NCAA’s amateurism concept justifying the NCAA’s compensation rules. In finding that the NCAA’s compensation rules have an anticompetitive effect on the college education market because “they fix the price of one component of the exchange between school and recruit,” which prevents competition among schools, an act constituting illegal price-fixing, the court acknowledged that making the compensation rules less strict might broaden student-athletes’ ability to choose where they attend school.  Ultimately, the Ninth Circuit agreed that the NCAA could not rely upon the argument that the rules had simply been in place for a long time. The Court did, however, acknowledge the NCAA’s compensation rules serve two limited procompetitive benefits: integrating academics with athletics, and promoting the NCAA’s product via amateurism.

Finally, the Ninth Circuit affirmed the District Court’s ruling that student-athletes may now receive grant-in-aid compensation for educational expenses up to the cost of attending their schools. However, the Ninth Circuit diverged sharply from the District Court by ruling that student-athletes may not receive compensation derived from the NCAA’s and their schools’ use of their NILs,, in stating that “in finding that paying students cash compensation would promote amateurism as effectively as not paying them, the District Court ignored that not paying student-athletes is precisely what makes them amateurs.”

The United States Supreme Court then declined to hear the case. As a result, the Ninth Circuit’s order maintains the basic status quo of the NCAA’s compensation rules, but simultaneously casts some doubt about the NCAA’s ability to justify these rules simply with a nod to the “amateurism” principle. Thus, while ultimately the O’Bannon Plaintiffs did not obtain the ideal relief they sought, bringing this issue to light may impact how future student-athletes address and challenge the NCAA’s compensation rules.

For more information about the O’Bannon decision and its effect on student-athletes, please contact Matt N. Korenoski of Strassburger McKenna Gutnick & Gefsky at (412) 281-5423 or mkorenoski@smgglaw.com.