Updated: Wednesday, October 18, 2017, 3:28 PM
The largest shopping mall operator in America wants to prevent a medical marijuana dispensary from opening near the former Franklin Mills Mall, and is attempting to turn its effort in Southeastern Pennsylvania into a federal case to ensure that the cannabis business never launches.
Simon Property Group, a $59 billion company based in Indianapolis and best known locally as owner of King of Prussia Mall, also owns the Northeast Philadelphia mall now known as Philadelphia Mills.
PharmaCann LLC, a small medical marijuana company based in Chicago, operates eight legal cannabis dispensaries in Illinois and New York state. It bought the site of a former Chi-Chi’s restaurant at the periphery of the Philadelphia Mills property earlier this year with the intention of opening a cannabis oil outlet there.
But it may not be able to meet the state Department of Health’s deadline to open before January 1, 2018. The site has been mired in litigation since September, with little communication between the two sides.
“We don’t know why Simon has made this an issue,” said PharmaCann’s attorney, Joshua Horn of Fox Rothschild. “There’s always a path to a resolution. We tried to speak with them; they told us to pound sand.”
A representative for Philadelphia Mills declined to comment, citing the ongoing litigation. Attorneys for Simon Property Group did not return calls requesting comment. It is not known why Simon doesn’t want the proposed dispensary to open on the 500 block of Franklin Mills Circle. The dispensary, which is not on the mall’s property, would be designed as a nondescript office building with very little to identify it from the outside.
In March, Simon passed on the opportunity to buy the land, waiving its right of first refusal before PharmaCann agreed to buy the property for $1.1 million, according to court papers obtained by the Inquirer.
In passing on the property, Simon asserted that a dispensary would be “strictly prohibited” because of a deed restriction forbidding a drugstore. PharmaCann attorneys said the dispensary — which will sell only a handful of cannabis oils, tinctures and lotions to sick registered patients and their caregivers — is not a drugstore.
The state, which legalized medical marijuana in April 2016, granted PharmaCann a permit to open on the site in June. The city granted zoning approval for the company to run a dispensary there in July.
Simon also said the deed forbids illegal activity on the premises. Because federal law considers any form of cannabis to be a Schedule 1 substance without any approved medical use, Simon’s attorneys said a medical marijuana facility is prohibited there, or anywhere else in the state.
PharmaCann countered with a filing in Philadelphia Common Pleas Court so it could proceed with construction to meet the state-mandated deadline requiring it to open by year’s end, Horn said.
On Tuesday, Simon sought to make an end run around state law by removing the case to U.S. District Court.
“Although Simon wants to get it into the federal court, there’s still a jurisdictional issue because the issue is over Pennsylvania real property,” Horn said. “PharmaCann believes the matter must be heard in state court.”