Companies Vying For Right To Grow Med Marijuana
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Companies Vying For Right To Grow Med Marijuana
Posted by CN Staff on November 12, 2013 at 14:19:40 PT
By William Weir, The Hartford Courant
Source: Hartford Courant
Connecticut -- In the basement of his Bridgeport tank removal business, Joseph Palmieri opens the door to a shipping container. A very bright light pours out and reveals hundreds of tomato plants. Near the beginning of the new year, Palmieri hopes to fill the growing pod, which he says is his own invention, with marijuana plants."I always joked about it when I heard that it went legal in other places. I said when it goes legal here, that'll be my new crop and build the business," he said. "Then I got serious about it, and flew out to Colorado."
He's one of several businesspeople in the state who plan to apply for a license to grow medical marijuana. For now, the state has said it will award licenses to three producers and see what the demand is for medical marijuana before awarding more. Those interested in either growing or selling medical marijuana have until Friday to apply. As of last Friday, the state had received one application for a dispensary license, but none for production. People interviewed for this story estimated that between 10 and 20 companies will apply for production licenses.Aspiring marijuana growers have had since early September to complete the license application, but by all accounts, it's a laborious process."It's extremely arduous," said Erik Williams, chief operating officer for Biltin Advanced Propagation, a company planning to open a production facility in New Britain. "The state Department of Consumer Protection laid out a very strict and highly regulated system. It's a lot of paperwork."Williams said that Biltin's application is "hundreds of pages," much of it appendices, photos and diagrams of the company's proposal.And it's a costly process. Applicants must pay a nonrefundable $25,000 application fee. Those who are approved then must pay an additional, one-time fee of $75,000. State regulations also require that each approved company put $2 million in escrow, which gradually will be reduced over a period of five years.Earlier this year, when the issue of legalizing medical marijuana was still being debated, some potential applicants grumbled about the escrow requirement. Now that it's part of the law, applicants say they agree with the strict financial requirements."The competition will be fierce," said Jay Czarkowski of Advanced Grow Labs, a company that has received local approval to open a marijuana production facility in West Haven. The financial requirements mean that the state is "going to be able to pick which groups are the most professional, so it won't be some kid in a tie-dyed T-shirt and dreadlocks dispensing the product."Besides the state-required costs, there's also the investment in the business itself."We estimate that we will require $2.5 million above and beyond our escrow commitment in order to commence operations," said Steven Gdula, executive committee consultant for Danbury-based Integrated Natural Care, which plans to operate a production business in Waterbury. "Our initial investment in our facility, including upgrades and equipment, is estimated to be $1.5 million."Many hoping to enter the state's medical marijuana industry are Connecticut-based, but several companies also include principals or consultants who have been involved in the business in other states that legalized medical marijuana years ago. Integrated Natural Care's management team includes a master cultivator, Alex Silverman, who honed his pot-growing chops working at the San Francisco Patient and Resource Center, better known as SPARC, which Fast Company magazine described as the "Apple Store of marijuana shops."Czarkowski, who lives in Colorado, got into the medical marijuana business there in 2009. He said that he and his wife had a long career in real estate before the housing market collapse. When the Obama administration issued a statement that it would take a hands-off approach to states that legalized medical marijuana, Czarkowski said, "we saw an opportunity to reinvent ourselves. Ours was one of the first 10 licenses that Colorado issued."Czarkowski said his experience in Colorado can help Advanced Grow Labs avoid the missteps that many of the businesses, including his own, made early on in Colorado."One of the mistakes I made was I didn't have an understanding that it's not easy money. But if you work hard and create a good, efficient model, you can make money," he said. "It's a myth that it's instant riches; it's not. It's like any other business."Another misperception Czarkowski said he had was that growing marijuana would be easy."It's not easy to cultivate cannabis, at least, to do it well on a commercial scale," he said. "We made mistakes on how to keep [the plants] healthy and pest-free and how to get good healthy yields."They have a system down now, he said, and they'll bring it to the Connecticut business if they get a license from the state.Many aspiring producers are wary about divulging too much information about their business plans, but a few talked about what they considered business innovations.For Palmieri, that includes his growing pod. He built a wooden box to conceal the nutrition-dispensing mechanism of his grow pod when visitors come by."It's a design that we came up with. There's growing systems across the country  I've gone and seen 'em  and they don't work as well," he said. "The yields that I get out of these, they're tremendous."He pounded the insulation on the inside of the pod's door. It's a combination of materials that he said "allows me 100 percent control of the atmosphere so there's no retention of moisture, there's no mold spores."Gdula, at Integrated Natural Care, said his company has developed an algorithm that can determine in seconds what ratio of chemicals would best treat a patient, based on that person's condition. And to make purchases easy, he said, the company has developed a color-coded system to easily find the right strain of marijuana."If a patient has anxiety problems, they can go for 'No. 4' in a red package," he said.As of last week, 1,243 people in Connecticut have been certified to use medical marijuana and 122 doctors have registered to issue certifications. Williams, of Biltin Advanced Propagation, said this should be enough to sustain three businesses. Like other would-be producers, Williams said he believes the number of certified patients and doctors on board with the program will spike once there's product on the market."Once there are dispensaries open and doctors know that patients don't have to go to the black market, you'll see an increase," he said.So when will certified patients actually be able to buy medical marijuana? Most estimates range between three to six months."We'd be able to get seeds in the ground within 24 to 48 hours of getting approval," Williams said, adding that Gaia would have product on the shelves within five months.Williams said his company would operate out of 73,000 square feet and start with between 30 and 40 employees. If demand increases, he said, the company could have as many as 120 workers.Gdula said he has more modest expectations."You'll hear people say they'll have 100 employees, but that's never going to happen  never, ever," he said. His company hopes to eventually build a production space of about 30,000 square feet, but will start at 10,000 square feet if they get a license. Companies that get too ambitious too fast will be in trouble, he said."Anyone doing more than 10,000 to 15,000 square feet is going to be paying for a lot of overhead," he said. "Overproduction and unplanned growth is going to be the death knell of the company." Source: Hartford Courant (CT)Author: William Weir, The Hartford CourantPublished: November 12, 2013Copyright: 2013 The Hartford CourantContact: letters courant.comWebsite: Medical Marijuana Archives 
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Comment #3 posted by HempWorld on November 13, 2013 at 17:20:09 PT
Not easy!
For Large Scale, but we are trying to help out:
HempWorld Greenhouse Solutions!
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Comment #2 posted by Hope on November 12, 2013 at 19:09:29 PT
Well ok... that's good news!The front porch! Wow! I still can't get over that smelling device. That is the goofiest thing I ever heard of.It's all been such a nightmare... so I guess these goofy things being ironed out are, actually, a huge and vast improvement over the way it was. They will lighten up, more and more, as time goes on and the world doesn't come to an end.
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Comment #1 posted by The GCW on November 12, 2013 at 18:50:53 PT
The front row seats.
Denver council's new bill on marijuana smoking says front yards are OK new bill is much more rational than the original.
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