Medical Marijuana Access & Patient Safety, Inc. v. D.A. Johnson, M.D.

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Medical Marijuana Access & :

Patient Safety, Inc., :

Petitioner :

:

v. : No. 58 M.D. 2022

:

Denise A. Johnson, M.D., FACOG, :

FACHE, Acting Secretary, :

Pennsylvania Department of Health, :

John J. Collins, Director of the :

Pennsylvania Department of Health, :

Office of Medical Marijuana, and :

Gregory Elder, Assistant Director and :

Chief Compliance Officer of the :

Pennsylvania Department of Health, :

Office of Medical Marijuana, :

Respondents : Argued: March 8, 2023

BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge

HONORABLE ANNE E. COVEY, Judge

HONORABLE MICHAEL H. WOJCIK, Judge

HONORABLE CHRISTINE FIZZANO CANNON, Judge

HONORABLE ELLEN CEISLER, Judge

HONORABLE LORI A. DUMAS, Judge

HONORABLE STACY WALLACE, Judge

OPINION

BY JUDGE CEISLER FILED: May 30, 2024

Before the Court are the cross-applications for summary relief filed by

Medical Marijuana Access & Patient Safety, Inc. (Petitioner) and Denise A.

Johnson, M.D., FACOG, FACHE, Acting Secretary, Pennsylvania Department of

Health (DOH), John J. Collins, Director of DOH’s Office of Medical Marijuana

(OMM), and Gregory Elder, Assistant Director and Chief Compliance Officer of

OMM (collectively, Respondents). Petitioner and Respondents seek counter

declarations as to whether DOH lacks or possesses the statutory authority to adopt

the United States Food and Drug Administration’s (FDA) “approved for inhalation”

standard. After thorough review, we grant in part and deny in part the parties’ cross-

applications.

I. Background

The Medical Marijuana Act (Act),1 which took effect on May 17, 2016,

establishes a framework for the legalization of medical marijuana in the

Commonwealth with regard to certain medical conditions. DOH is the

Commonwealth agency responsible for administering and enforcing the Act,

including regulating the medical marijuana program in a way that “balances the need

of patients to have access to the latest treatments with the need to promote patient

safety.” Section 102 of the Act, 35 P.S. § 10231.102. The Act also outlines the

application process through which medical marijuana grower/processors and

dispensaries, also known as medical marijuana organizations (MMOs), can obtain

permits from DOH to grow, process, or dispense medical marijuana. See Sections

601-616 of the Act, 35 P.S. §§ 10231.601-10231.616.

Section 303(b)(2)(iv) of the Act specifically authorizes the dispensation and

patient use of certain forms of medical marijuana, including “a form medically

appropriate for administration by vaporization . . . .” 35 P.S. § 10231.303(b)(2)(iv).

The cannabis in vaporization products contains substances known as terpenes, which

are naturally occurring chemical compounds found in cannabis and other plants that

give the plant its flavor, aroma, and color. Petition for Review (PFR), ¶28;

Stipulation, 2/25/22, ¶1. MMOs add terpenes extracted from either cannabis itself or

other, external sources—such as lemons, hemp, or botanicals—to add flavor to the

1

Act of April 17, 2016, P.L. 84, as amended, 35 P.S. §§ 10231.101-10231.2110.

2

vapor and to improve the aromatic component of the medicine. PFR, ¶29;

Stipulation, ¶2. MMOs have added terpenes to their medical marijuana vaporization

products since 2018, when medical marijuana first became legally available in

Pennsylvania; DOH has reviewed and approved each such product before it became

available for use by our Commonwealth’s medical marijuana patients. Id., ¶¶ 27, 30,

38-39.

In 2021, the General Assembly enacted Act 44 of 2021 (Act 44), thereby

amending the Act.2 As a result, Section 702(a)(5) of the Act now provides, in

pertinent part:

(a) Authorization.--Subject to subsection (b), a

grower/processor may do all of the following in

accordance with [DOH] regulations:

****

(5) Add excipients or hemp or hemp-derived

additives obtained or cultivated in accordance with

paragraph (4). Excipients must be pharmaceutical grade,

unless otherwise approved by [DOH]. In determining

whether to approve an added substance, [DOH] shall

consider the following:

(i) Whether the added substance is

permitted by the [FDA] for use in food or is

Generally Recognized as Safe (GRAS)

under Federal guidelines.

(ii) Whether the added substance

constitutes a known hazard such as diacetyl,

CAS number 431-03-8, and pentanedione,

CAS number 600-14-6.

2

Act of June 30, 2021, P.L. 210, No. 44. Act 44 went into effect immediately.

3

35 P.S. § 10231.702(a)(5) (emphasis added). Section 103 of the Act defines

“excipients” as “[s]olvents, chemicals or materials reported by a [MMO] and

approved by [DOH] for use in the processing of medical marijuana.” 35 P.S. §

10231.103. When added to medical marijuana, terpenes qualify as a type of

“excipient.”

On November 16, 2021, Respondents sent an email to a group of MMOs

advising them that DOH was “conducting a review of all vaporized medical

marijuana products containing additional ingredients,” i.e., excipients, including

terpenes, and was requiring every grower/processor to submit for approval each

additional ingredient, even if the product was previously approved. PFR, ¶41 and

Ex. 2; Stipulation, ¶¶15, 16 and Ex. 3. Then, on December 2, 2021, OMM emailed

all patients in the medical marijuana program advising them that DOH had instituted

a statewide review of vaporized products containing additional ingredients,

including terpenes, for safety. PFR, ¶44 and Ex. 3; Stipulation, ¶19 and Ex. 7. The

letter advised: “[Y]ou should be aware that products with added ingredients may not

be safe for inhalation and you should make your own decision about whether to use

these products.” PFR, ¶44 and Ex. 3; Stipulation, ¶17 and Ex. 4. On December 13,

2021, OMM sent another email to MMOs requesting additional information

regarding additives, including terpenes. PFR, ¶47 and Ex. 5; Stipulation, ¶18 and

Ex. 6.

In response, MMO members submitted approval requests and provided DOH

with voluminous submissions, including declarations from medical and scientific

professionals affirming there are no known safety concerns associated with the

inhalation of fruit or botanically-derived terpenes. PFR, ¶¶43, 49, and Ex. 6.

Following review of the submissions, on February 4, 2022, OMM denied the

4

approval requests, rescinded prior approval of vaporized products containing

excipients that had not been approved for inhalation by the FDA, and instituted a

recall of those products (Terpene Recall Mandate). PFR, ¶51 and Ex. 7; Stipulation,

¶19 and Ex. 7.

On February 10, 2022, Petitioner3 initiated this action, on behalf of itself and

its members, by filing a nine-count Petition for Review (PFR), seeking declaratory

and injunctive relief from DOH’s Terpene Recall Mandate. In Count I, Petitioner

requests a declaratory judgment for lack of statutory authority. In Count II, Petitioner

seeks declaratory relief on the basis that the Terpene Recall Mandate is an unlawful

de facto regulation. In Count III, Petitioner avers that DOH’s regulation set forth in

28 Pa. Code § 1151.42(c) does not grant DOH authority to initiate a mandatory recall

because that section applies when grower/processors discover a condition that poses

a risk to public health and safety, which did not occur here. In Count IV, Petitioner

seeks a declaratory judgment based on vested rights, detrimental reliance, and

promissory estoppel. In Count V, Petitioner asserts that the Terpene Recall Mandate

violates the Fifth Amendment of the United States Constitution, U.S. CONST. amend.

V, and article I, section 10 of the Pennsylvania Constitution, PA. CONST. art. I, § 10,

in that it effects an unconstitutional taking of private property without compensation.

In Count VI, Petitioner claims that the Terpene Recall Mandate violates the due

process rights of Petitioner’s members under the Fourteenth Amendment of the U.S.

Constitution, U.S. CONST. amend. XIV, and article I, sections 1 and 11 of the

Pennsylvania Constitution, PA. CONST. art. I, §§ 1, 11. In Count VII, Petitioner

3

Petitioner is an association consisting of various stakeholders in the medical marijuana

industry, including MMOs and medical marijuana patients. Respondents previously challenged

Petitioner’s standing, but this Court determined that Petitioner has associational standing to bring

this action. See Med. Marijuana Access & Patient Safety, Inc. v. Klinepeter (Pa. Cmwlth., No. 58

M.D. 2022, filed June 2, 2022) (Wojcik, J.) (single-judge op.) (MMAPS I).

5

requests a declaratory judgment for damage to reputation under article I, section 11

of the Pennsylvania Constitution, Pa. Const. art. I, § 11. In Counts VIII and IX,

Petitioner seeks preliminary and permanent injunctive relief.

Respondents countered by filing an answer and new matter, after which this

Court granted a preliminary injunction on June 2, 2022, thereby enjoining

Respondents from enforcing the Terpene Recall Mandate until the merits of

Petitioner’s claims could be fully adjudicated. See MMAPS I, slip op. at 25-26.4

Thereafter, Respondents and Petitioner filed the cross-applications for

summary relief that are now before us. The relevant facts of this case are not in

dispute. See Stipulation. Respondents’ application seeks summary relief in their

favor as to Counts I and II; dismissal of Counts III through VII on the basis these

counts are moot by operation of this Court’s preliminary injunction decision in

MMAPS I; and dissolution of the preliminary injunction previously granted in this

matter. Petitioner’s application for partial summary relief seeks summary relief in

its favor as to Counts I and II, and a permanent injunction under Count IX.5

4

Respondents appealed MMAPS I to the Supreme Court, which triggered an automatic stay

of the preliminary injunction. This Court granted Petitioner’s request to vacate the automatic stay,

and, after the Supreme Court denied Respondents’ application to reinstate the stay, Respondents

elected to discontinue their appeal of the preliminary injunction on August 17, 2022.

5

Pa. R.A.P. 1532(b) provides that “[a]t any time after the filing of a petition for review in

an appellate or original jurisdiction matter, the court may on application enter judgment if the right

of the applicant thereto is clear.”; see also Summit School, Inc. v. Dep’t of Educ., 108 A.3d 192,

195 (Pa. Cmwlth. 2015). In deciding a request for summary relief, “this [C]ourt must determine

whether it is clear from the undisputed facts that either party has a clear right to the relief

requested.” Bell Atl.-Pa., Inc. v. Tpk. Comm’n, 703 A.2d 589, 590 (Pa. Cmwlth. 1997), aff’d, 713

A.2d 96 (Pa. 1998). Determinations as to whether an agency lacks statutory authority or whether

an agency’s particular statement of policy is an unpromulgated regulation are questions of law.

Markham v. Wolf, 136 A.3d 134, 138 (Pa. 2016).

6

II. Discussion

A. De facto Regulation

1. Contentions

We address Count II first, for reasons that will become apparent infra.

Regarding Count II, Respondents contend that DOH’s criteria for approving

terpenes added to vaporized medical marijuana products are not an unlawful de facto

regulation. Respondents further argue that even if Petitioner’s argument has any

merit, its claim has been mooted by the adoption of a final regulation encompassing

the criteria. But even if no such regulation had been adopted, the criteria are simply

an interpretative rule regarding patient safety and the approval of medical marijuana

products in the Commonwealth. Therefore, summary relief should be granted in

Respondents’ favor.

Petitioner responds that it is entitled to summary relief as to Count II, because

the Terpene Recall Mandate constitutes a de facto regulation, and its promulgation

outside of the formal rulemaking process renders it void ab initio. Consideration of

the three binding norm factors makes clear that the Terpene Recall Mandate is an

unlawful regulation. First, the language employed in DOH’s state-wide

communications to all industry stakeholders made it clear that DOH’s “approved for

inhalation” standard was being implemented with the force of law because it notified

stakeholders these products could no longer be produced under the threat of

regulatory sanctions resulting from any noncompliance with DOH’s newly

announced standard. Second, DOH’s pronouncement was also quite clear that DOH

intended to implement the new standard immediately. DOH immediately put the new

standard into effect by denying approvals of these products, revoking all prior

approvals, and mandating the recall of all products that did not meet the standard.

7

Third, the imposition of its new standard stripped DOH of all discretionary powers

when approving a terpene by implementing a policy from which no deviation is

permitted – the very hallmark of a regulation. Respondents’ claim that the Terpene

Recall Mandate is merely a policy statement flies in the face of its plain language

that established that it was effective immediately and retroactively and that

proclaimed a bright-line rule applicable to all products containing botanically-

derived terpenes. Contrary to Respondents’ mootness argument, Count II is not moot

because DOH’s final regulations are not yet effective and they do not authorize the

“approved for inhalation” standard. See Stipulation, ¶13.

2. Analysis

It is well established that, while regulations are subject to the formal

rulemaking process, interpretative rules or statements of policy “need not be subject

to notice and comment procedures because, presumably, they only provide guidance

by which administrative agency personnel carry out their power delegated to them

by the General Assembly.” Dep’t of Env’t Res. v. Rushton Mining Co., 591 A.2d

1168, 1171 (Pa. Cmwlth. 1991). “[A]n interpretative rule must genuinely track the

meaning of the underlying statute, rather than establish an extrinsic substantive

standard.” Borough of Pottstown v. Pa. Mun. Ret. Bd., 712 A.2d 741, 743 (Pa. 1998);

accord Eastwood Nursing & Rehab. Ctr. v. Dep’t of Pub. Welfare, 910 A.2d 134,

142 (Pa. Cmwlth. 2006) (holding a statement of policy must track the statute and not

expand upon its plain meaning). Moreover, interpretative rules, “which ‘do not in

themselves establish binding standards of conduct . . . need not be promulgated . . .

to the extent they merely construe a statute and do not improperly expand upon its

terms.’” Victory Bank v. Com., 219 A.3d 1236, 1243 (Pa. Cmwlth. 2019) (quoting

Borough of Pottstown, 712 A.2d at 743). Such “‘substantive rulemaking is a widely

8

used administrative practice, and its use should be upheld whenever the statutory

delegation can reasonably be construed to authorize it.’” Eagle Env’t II, L.P. v. Dep’t

of Env’t Prot., 884 A.2d 867, 877 (Pa. 2005) (quoting Process Gas Consumers Grp.

v. Pa. Pub. Util. Comm’n, 511 A.2d 1315, 1320 (Pa. 1986)).

On the other hand, a regulation creates a mandatory standard of conduct.

Eastwood, 910 A.2d at 144. “Where an agency, acting pursuant to delegated

legislative authority, seeks to establish a substantive rule creating a controlling

standard of conduct,” it must comply with proper notice-and-comment procedures.

Borough of Pottstown, 712 A.2d at 743. “[D]uly authorized and promulgated

regulations of an administrative agency have the force of law and are binding on the

agency.” State Coll. Manor, Ltd. v. Dep’t of Pub. Welfare, 498 A.2d 996, 998

(Pa. Cmwlth. 1985).

If an interpretative rule or statement of policy “functions as a regulation, then

it will be nullified due to the agency’s failure to obey the processes applicable to the

promulgation of a regulation.” Transp. Servs., Inc. v. Underground Storage Tank

Indemnification Bd., 67 A.3d 142, 154 (Pa. Cmwlth. 2013) (citing Rushton Mining

Co., 591 A.2d at 1171). In assessing whether an agency’s pronouncement is a

regulation or a statement of policy, we follow the “binding norm test,” which

provides:

“Binding norm” means that the agency is bound by the

statement until the agency repeals it, and if the statement

is binding on the agency, it is a regulation. . . . [I]n

determining whether an agency action is a regulation or a

statement of policy, one must look to the extent to which

the challenged pronouncement leaves the agency free to

exercise discretion to follow or not follow the announced

policy in an individual case.

Rushton Mining Co., 591 A.2d at 1173.

9

Here, DOH’s February 4, 2022 emails to both medical marijuana

grower/processors and patients stated that DOH has determined that certain

vaporization products containing terpenes may no longer be produced and are

subject to recall because they have not been “approved for inhalation” by the FDA.

Stipulation, Exs. 1 and 7. The email to grower/processors rescinded DOH’s prior

approval of the products and mandated that grower/processors “MUST follow the

mandatory recall procedures outlined in 28 Pa. Code § 1151.42(c).” Stipulation,

Ex. 1 (emphasis in original). Moreover, Respondents do not dispute that failure to

follow the Terpene Recall Mandate may result in sanctions, or that the majority of

the recalled products were previously approved for production and distribution by

DOH. See Stipulation, Ex. 1. Upon review, the Terpene Recall Mandate goes beyond

a mere statement of policy and instead creates a binding norm. Because Respondents

failed to obey the processes applicable to the promulgation of a regulation, Petitioner

is entitled to summary relief on Count II.6

B. Permanent Injunction

1. Contentions

Petitioner asserts that, having demonstrated a clear right to summary relief,

DOH should be permanently enjoined from enforcing the “approved for inhalation”

standard. Absent a permanent injunction that enjoins DOH’s unlawful standard,

Petitioner’s members will not be able to produce, sell, or consume these critically

important vaporized medicines. Legal damages are not available to Petitioner’s

members because of sovereign immunity protections and because there is no remedy

that can adequately fulfill a patient’s inability to access medications that have been

recommended by a physician or pharmacist. Accordingly, a permanent injunction is

6

Contrary to Respondents’ mootness argument, the issue is not moot because the proposed

regulation has not yet been adopted. See Stipulation, ¶13.

10

required both to avoid an injury that cannot be compensated by legal damages and

to prevent a greater injury by prohibiting access to medications.

By contrast, Respondents argue that a permanent injunction is not warranted

here, because it is entitled to judgment in its favor regarding Counts I and II, as well

as the dismissal of Counts III through VII on the basis of mootness. Respondents do

concede, however, that the preliminary injunction previously entered by this Court

continues to act as a permanent injunction unless the Supreme Court reverses such

a determination.

2. Analysis

“In order to obtain permanent injunctive relief, a party must establish the

following elements relative to [its] claims: (1) the right to relief is clear, (2) the

injunction is necessary to avoid an injury that cannot be compensated by damages,

and (3) . . . greater injury will result if the court does not grant the injunction than if

it does.” Mazin v. Bureau of Pro. & Occupational Affs., 950 A.2d 382, 389 (Pa.

Cmwlth. 2008).

Having entered judgment in favor of Petitioner as to Count II, we conclude

that Petitioner is entitled to permanent injunctive relief, but only as to DOH’s current

Terpene Recall Mandate, which, again, we have concluded is unlawful because it is

an unpromulgated de facto regulation.

11

III. Conclusion

For these reasons, we grant Petitioner’s application for partial summary relief

in full regarding Count II of the PFR and in part as to Count IX of the PFR. In

addition, we deny Respondents’ application for summary relief as to Count II.7

ELLEN CEISLER, Judge

7

Since Petitioner sought relief via Counts I and III through VII that is identical to the relief

we have granted regarding Count II, we need not address the merits of the parties’ respective cross-

applications for summary relief with regard to those remaining counts (i.e., Counts I, III-VII). As

for Count VIII, Petitioner already obtained the relief sought therein, i.e., a preliminary injunction,

through MMAPS I. That preliminary injunction has now dissolved and has been replaced by the

aforementioned permanent injunction. Den-Tal-Ez, Inc. v. Siemens Cap. Corp., 566 A.2d 1214,

1217 n.1 (Pa. Super. 1989) (“[A] preliminary injunction is super[s]eded by a decision on the merits,

and terminates upon the issuance of a permanent injunction.”); see Lerch v. Unemployment Comp.

Bd. of Rev., 180 A.3d 545, 550 (Pa. Cmwlth. 2018) (“In general, Superior Court decisions are not

binding on this Court, but they offer persuasive precedent where they address analogous issues.”).

12

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Medical Marijuana Access & :

Patient Safety, Inc., :

Petitioner :

:

v. : No. 58 M.D. 2022

:

Denise A. Johnson, M.D., FACOG, :

FACHE, Acting Secretary, :

Pennsylvania Department of Health, :

John J. Collins, Director of the :

Pennsylvania Department of Health, :

Office of Medical Marijuana, and :

Gregory Elder, Assistant Director and :

Chief Compliance Officer of the :

Pennsylvania Department of Health, :

Office of Medical Marijuana, :

Respondents :

ORDER

AND NOW, this 30th day of May, 2024, it is HEREBY ORDERED:

1. Petitioner Medical Marijuana Access & Patient Safety, Inc.’s

application for partial summary relief is GRANTED IN FULL regarding Count II of

the Petition for Review (PFR); and GRANTED IN PART and DENIED IN PART

regarding Count IX of the PFR;

2. The Pennsylvania Department of Health is permanently enjoined from

enforcing the Terpene Recall Mandate in its current form;

3. Respondents Denise A. Johnson, M.D., FACOG, FACHE, Acting

Secretary, Pennsylvania Department of Health, John J. Collins, Director of the

Pennsylvania Department of Health, Office of Medical Marijuana, and Gregory

Elder, Assistant Director and Chief Compliance Officer of the Pennsylvania

Department of Health, Office of Medical Marijuana’s application for summary relief

is DENIED as to Count II;

4. Counts I and III through VII of the PFR are DISMISSED.

ELLEN CEISLER, Judge