PurePenn details plans to be part of Pennsylvania's medical marijuana industry
March 20, 2017 12:00 AM
PurePenn CEO Gabriel Perlow, left, along with Jordan Lams, center, CEO of Moxie Extracts, and Raymond Boyer, CFO of SDC Nutrition, discusses a McKeesport cannabis processing plant Wednesday.
Gabriel Perlow, CEO of PurePenn, left, and Jordan Lams, CEO of Moxie Extracts, gathered Wednesday to discuss how they plan to establish a cannabis processing plant in McKeesport.
By David Templeton / Pittsburgh Post-Gazette
The seed is planted, the state’s medical marijuana industry soon will sprout, and if all goes well for McKeesport, PurePenn LLC will grow into solid stalk for the upstart industry.
Plant metaphors aside, owners of Downtown-based PurePenn said their team has expertise, among other important advantages, in the medical marijuana business in other states.
They also said they have access to a genetic library of hundreds of cannabis strains to produce high-quality, pharmaceutical-grade cannabis-oil products. They also have plans to help other processing and distribution facilities statewide, once permits are awarded by the state Department of Health. Awarding permits for 12 processing and distribution facilities and up to 27 dispensaries likely won’t occur until late June, at the earliest, state officials said.
PurePenn officials said state regulations are among the best in the nation, based on rules for production, distribution and sales, all with a strong patient focus.
PurePenn CEO Gabriel Perlow said his company will submit, by Monday’s deadline, its 2,000-page application that’s rife with detail about its plans to grow and process thousands of marijuana plants. The result will be pharmaceutical-grade, cannabis-based treatments in the form of capsules, ointments, tinctures and vaporizing oils, among others, for distribution statewide.
It already has zoning approval in the RIDC Industrial Center of McKeesport to build a facility, initially to be 21,000 square feet, on 5 acres with an option for 5 additional acres.
He said the company “will spend in excess of six figures to complete the project and to maintain reserves throughout the first year of operations,” with expectations of a gradual buildup of product demand as more patients qualify to purchase the products.
“As the market grows, the facility grows,” said Mr. Perlow, an attorney and real-estate developer who has shifted his full-time focus to the project. “We have created a company that will deliver on its promises and be patient-centered.”
Patient focus was a repeated statement Wednesday as he and key company officials provided details for the first time about the project that got underway even before the medical marijuana law, Act 16, was approved April 17 of last year.
Each of the 21-person ownership team brings expertise in a different field, be it the industry in other states, medicine, pharmaceutical operations, controlled substances, U.S. Drug Enforcement Administration policy, laws and regulations, real estate, manufacturing or construction.
Many ownership members have family businesses and also have had a family member who could have used cannabis treatment or did use it for pain and nausea, among other conditions, during his or her medical battle. The law allows the use of medical marijuana to treat 17 specific diseases.
“We wanted a group of true partners,” Mr. Perlow said.
Other key members include:
• Jordan Lams, CEO and co-founder of Moxie, which processes and distributes pharmaceutical-grade cannabis-oil products in California, Michigan and Nevada. He also is an executive member of the California Cannabis Industry Association; his company has received more than 60 honors for product quality and effectiveness.
• Raymond Boyer, a McKeesport native and independent private investor who also is chief financial officer for SDC Nutrition, a Pittsburgh company that manufactures protein powders and supplements.
• Stanley M. Marks, a noted oncologist who is chairman of UPMC CancerCenter. He will serve on PurePenn’s member advisory board, independent of his affiliation with UPMC.
In a prepared statement, Dr. Marks said, “There’s considerable evidence that safe, high-quality medicinal marijuana benefits cancer patients, in particular, as an appetite stimulant and in controlling nausea and pain.
“We all want to improve quality of life for cancer patients,” he stated. “I’ve known Gabe and his family for a long time. The group he’s put together is replete with knowledge, and most importantly, good intentions to help patients while nurturing a stronger community in McKeesport.”
The McKeesport project is contingent on PurePenn receiving a permit through the state Department of Health, with only two available in the southwestern district, comprising 11 counties. The state is divided into six districts.
The health department anticipates 900 applications for the 12 processing and distribution licenses and 27 dispensary licenses, said April Hutcheson, the department’s press secretary. She couldn’t say how many applications have been submitted thus far.
Sewickley-based Laurel Green Medical already has announced its permit application for a processing and distribution center near the former Talbot Tower property in Braddock. That group includes ex-Steelers player Franco Harris. Other facilities previously had announced plans for such centers in Butler and Armstrong counties, but no details were forthcoming.
PurePenn’s initial workforce of 10 people would increase along with demand to 25 to 50 people, with maximum employment of 75, not including temporary and construction jobs. The lowest wage, Mr. Perlow said, would be $14.50, or twice the current minimum wage of $7.25, with career-level jobs available.
Patients will need a prescription from a doctor and a card issued from the health department to buy products at state-licensed dispensaries. The McKeesport production facility wouldn’t be permitted to sell products directly to patients.
Mr. Lams, whose company, Moxie, is based in Los Angeles, said the industry is still young but that cannabis science has advanced steadily ever since California legalized medical marijuana in 1996. The most effective products, he said, emphasize the wide variety of cannabinoids, not just the psychoactive THC (tetrahydrocannabinol).
His company’s genetic library of seeds is thought to be the world’s largest, with research underway in Chile to develop new therapies and dose-response data. Already Moxie successfully has been using its own modular construction method in other states, which Mr. Lams compared to Legos, to add units quickly to meet demand.
Inside the McKeesport facility, thousands of plants would grow under sunlamp technology, as the law requires, with workers donning clean-room suits, masks, gloves and foot coverings in a laboratory setting to raise, harvest and process the plants.
Production will require “tons of water,” Mr. Lams said, with the facility designed to recover water from all possible sources for reuse in the growing room. All water will be filtered, with the system instantly mixing in nutrients. But actual watering will be done by hand, plant by plant, significantly reducing water use and runoff.
Hydrocarbon extraction will be used to isolate plant glands rich with live resins, which will be frozen quickly to preserve their beneficial qualities.
“The product will never see the light of day until the patient takes it out of the dispensary,” he said.
Once a permit is issued, the company will have six months to become operational. At that point, it will have only 30 days, as specified by state regulations, to transport all marijuana plants and seeds from other states or nations to the production site, Mr. Lams said.
The small amount of plant waste will be mixed with soil for disposal at a toxic waste site, he said. The plant will have heavy security.
PurePenn officials said they anticipate many strong applications to be submitted.
“If we get a license, we’ll be successful in Pennsylvania,” Mr. Lams said.
Conservative estimates suggest that 5 percent of the state population will qualify for medical marijuana. Other projections are two to three times higher.
The company also has agreed to provide a half-percent of gross revenues annually to a nonprofit foundation, likely to be called the McKeesport Community Fund, to pay for community projects agreed upon by city officials, residents, businesses and PurePenn officials, with a minimum annual contribution of $50,000.
McKeesport Mayor Michael Cherepko said city residents are excited about the potential economic boost the project could give the city and is anxious for details.
“My administration, city council and our local planning commission have been nothing short of impressed with the plans that PurePenn has submitted thus far,” he said in a prepared statement. “As they move forward with their application to the Commonwealth, the City of McKeesport will continue to express support on their behalf.”
David Templeton: email@example.com or 412-263-1578.
Correction, March 20, 2017: Jordan Lams’ position with the California Cannabis Industry Association was misstated in an earlier version of this story. He is an executive member.
To report inappropriate comments, abuse and/or repeat offenders, please send an email to
firstname.lastname@example.org and include a link to the article and a copy of the comment. Your report will be reviewed in a timely manner.