Out-of-Staters Seek Stake in Dispensaries
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Out-of-Staters Seek Stake in Dispensaries
Posted by CN Staff on June 28, 2010 at 04:44:42 PT
Source: Kennebec Journal
Augusta -- Maine's new medical marijuana law has two key conditions for those who want to open one of the state's first dispensaries. Operators have to be Maine residents, and they have to register as nonprofits. Neither condition, however, has kept investors and entrepreneurs from coming from outside the state to be part of the new industry.Several of the groups that applied for operating licenses last week are led by recent arrivals from California or other states where they learned the medical marijuana business. One group with California connections even hopes to open five of the state's eight dispensaries and, to improve its odds, hired the Augusta lobbyist who helped write Maine's new law.
Local applicants say they've been called by investors from around the country who want to help finance the dispensaries.The interest from away raises questions about just how lucrative the nonprofit businesses will be. And, while some Mainers are welcoming the interest and business experience from away, others say the newcomers want only to benefit themselves."It's not outside people coming to help patients. It's outside people coming to take money out of the state," said Charles Wynott of Westbrook, a medical marijuana patient and one of the advocates who helped pass Maine's new law.State officials are now reviewing 29 applications to operate eight dispensaries, one in each of the state's public health districts. The Department of Health and Human Services plans to award the eight licenses July 9, and the first dispensaries are expected to open for business this fall.Meeting the Maine residency requirement is as easy as moving to the state, as a number of aspiring dispensary operators have done in recent months.The not-for-profit requirement means dispensaries cannot issue shares of stock or pay out profits in the form of dividends to investors. However, Maine law allows them to pay "compensation in a reasonable amount to its members, directors, or officers." The law does not define what is a reasonable salary, and doesn't set any specific limits on pay.Some say the state's rules, and a limited market size, mean medical marijuana won't be the lucrative business here that it is in other states. Maine also has relatively tight limits on who qualifies to buy medical marijuana, although the list of illnesses and conditions can be expanded in the future."I think a lot of that (out-of-state interest) is wishful thinking," said state Sen. Stan Gerzofsky, D-Brunswick, a member of the task force that shaped the final state law. "I don't see a lot of profit to be made because I don't see a lot of volume. I don't see a lot of patients."No one knows how many patients will buy marijuana from the dispensaries. However, advocates say tens of thousands of ill and disabled people qualify in Cumberland County alone. And, while dosages are much smaller for some people, a patient is allowed to buy as much as 2.5 ounces -- about $700 worth -- every 15 days."There's money here," said Wynott. "Once this thing gets legalized, there's going to be a lot of people waiting to get their medicine." And, even if a dispensary operator can't pay out profits in dividends, he said, "you can still pay your board of directors and employees."Brendan McGann of South Portland said out-of-state groups clearly see dollar signs.McGann is a director of the Maine Wellness Group, which applied for licenses in three districts and is positioning itself as a home-grown operation run by local medical marijuana patients and caregivers. Although the Maine Wellness Group has been getting calls from out-of-state investors wanting to put money into the startup and get on the payroll, he said, "We've just essentially been turning them all down."McGann is especially critical of the Northeast Patients Group, which has connections to Berkeley Patients Group in California and has applied for licenses in some of the same districts as his group. Northeast is led by a recent California transplant and represented by Dan Walker, an Augusta-based attorney and lobbyist with Preti Flaherty who served on the state task force that drafted the state law."They've been spending money hand over fist since the day they showed up here," McGann said. McGann recently confronted Walker outside a meeting and accused him of unofficially lobbying for the Berkeley Group even while he served on the state task force.Walker denied having a conflict of interest and said last week he didn't sign on with Northeast Patients Group until after the law was voted on by a legislative committee. "I worked on the task force until it ended and never accepted a dime," he said.Walker said he chose to work with Northeast Patients Group over other groups that wanted to hire him partly because of its California connection and proven track record there. One of Berkeley's directors, Tim Schick, is from Maine and helped advise policymakers here."He really felt a responsibility to help Maine not make the mistakes California did," Walker said.Northeast is a Maine nonprofit with four Mainers on its board of directors, and the money it earns and gives to charity will stay in Maine, too, he said. "The model that we're working on is, you pay everyone a salary, you invest the money back in (the business) and you donate the money back into the community," Walker said.Ken Altshuler, a Portland attorney who also served on the state task force, said he has declined to represent dispensary applicants because of the appearance of a conflict, although he would not second-guess Walker's decision.Altshuler doesn't believe where an applicant comes from is important, especially if it has a good track record like the Berkeley group does. And he's not concerned that money might be motivating applicants."The dispensaries are going to make money, we know that. So do drug companies. If we're not going to care about them what makes pot so special?" he said. "Nobody who runs a dispensary has an altruistic motive. Money is always the motive and I'm OK with that. ... I just want people to get the quality medicine they need."Patient advocates say they will be watching closely to see whether Maine's dispensaries become the kind of patient-friendly operations that the rules were written to encourage.Jonathan Leavitt, who led the campaign to pass the medical marijuana law last fall, said Maine has a chance to create a new model, but it may require some more changes in the law."How do we prevent these things from coming under the control of a whole corporate economic world?" Leavitt asked."I think we need to implement some other mechanisms that guarantee that these dispensaries are here to take care of patients first and foremost."Related Article: For Dispensary Applicants, Now It's a Waiting Game: Kennebec Journal (Augusta, ME)Published: June 28, 2010Copyright: 2010 Blethen Maine Newspapers Inc.Website: Medical Marijuana Archives 
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Comment #1 posted by Sam Adams on June 28, 2010 at 20:37:59 PT
just a thought
"I think we need to implement some other mechanisms that guarantee that these dispensaries are here to take care of patients first and foremost."Profit! Profit will do the best job for the patients. But only if its partner is involved - competition.Here's another thought: If anyone is forced to be non-profit, it should be defense contractors.Defense contractors can make a profit, but not people helping the sick and ill. Only in the US!
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