With a hodgepodge of local laws between medical and recreational marijuana usage competing with federal prohibition, the U.S. cannabis industry is currently experiencing growing pains while navigating a maze of varying state regulations.  

While striving to reach compliance with Pennsylvania regulations, Harvest Health & Recreation (CSE: HARV; OTCQX: HRVSF) has decided to drop attempts at gaining permits for two sites that were already constructed and staffed. 

The decision affects affiliates Harvest of Northwest PA and Harvest of North Central PA, which will not open existing facilities in New Castle and Shamokin that were ready for business. 

Instead, the company’s remaining Pennsylvania affiliates will focus on five permits that were recently secured and allow dispensaries to open in Johnstown, Harrisburg, Reading, and Scranton. 

The situation arose due to an error in reporting the correct general contractor working with each affiliate seeking a permit to open dispensaries across the state.  

After originally reporting to the Pennsylvania Department of Health that ESCI 360 would serve as general contractor for all affiliates, a different contractor was brought on without the requisite filings to notify the Department of Health. 

The decision to drop further attempts at receiving licenses impacted by the general contractor error was reached to avoid a legal battle. According to a statement from the company, that court fight would have prevented the remaining Harvest affiliates in Pennsylvania from opening their doors immediately. 

Announcing that the agreement had been struck with the state of Pennsylvania this morning, Harvest Health commented:

Although this was not an easy decision to make, our affiliates believe it was the best decision for the remaining affiliated companies, other employees, and most importantly the patients in Pennsylvania. Each Harvest affiliate believes that state regulatory frameworks are essential to the success of the industry and are committed to operating within the bounds of cannabis policies.

As a result of Harvest dropping attempts to gain the disputed permits at those two sites, just shy of 20 employees who already completed state training will lose their jobs. 

Those employees who will not be able to work at the Shamokin and New Castle sites will be granted severance packages and provided assistance to work with recruiting agencies to find other work in their local areas. 

Aside from getting Pennsylvania affiliates up and running, Harvest also recently announced expansion into Utah’s medical cannabis program.