Pubdate: Thu, 17 Apr 2014
Source: Chicago Tribune (IL)
Page: 1
Copyright: 2014 Chicago Tribune Company
Author: Robert McCoppin


But Industry Insiders Say High Costs Would Ensure Serious Inquiries Only

Vegetables, flowers and herbs grow in rows of green at Robert Boyce's
greenhouses in Lake Zurich - but what he'd really like to grow is marijuana.

Boyce, a horticulturist and landscape design architect, has run
Natural Environments Greenhouses and Nursery and a florist shop for
many years. He's done work for the Chicago Botanic Garden and several
Chicago-area public parks.

Yet none of that is enough to qualify for a license to grow pot under
the new state law allowing medical marijuana, for which having a green
thumb may not be as important as having lot of green to put up.

Under the proposed rules for the new law, Boyce and other would be pot
cultivators need a $2 million surety bond, $250,000 in liquid assets,
$25,000 for an application fee, $200,000 for a permit fee and an
approved site. The greenhouses he runs wouldn't qualify because
they're next to a day camp for kids - one of many siting restrictions
that also prohibit growing pot near schools and residential areas.

"We have the know how. We have the manpower, the familiarity with
growing herbal and medicinal plants, knowledge of building
greenhouses," Boyce said. "But right now, you're looking at $3
(million) to $5 million in startup costs."

State regulators say actual initial costs could vary widely. But they
said they want to ensure that those who seek to run marijuana
cultivation centers or dispensaries have the sufficient money to
operate, especially early on when they have to make significant
investments before generating any revenue.

State agencies proposed rules for growing, selling and using medical
marijuana in February and received hundreds of public comments in
response. Based on the feedback, the state plans to issue revised
rules Friday.

Most of the public comments complain that the rules governing medical
marijuana are too restrictive, for those who want to grow, sell or
consume it alike. The most common criticisms were that the $150
patient registration fee is too high, and that the requirement to
fingerprint patients and investors is excessive.

Some industry operators supported the business fees, saying they would
separate the real business people from the dreamers who don't have the
money or know-how to start a complicated and expensive business.

The proposed rules - involving four state agencies and covering 226
pages - and the critical responses also underscore the wide range of
issues that have to be addressed as the state rolls out medical pot.
Though the law legalizing medical marijuana took effect this year,
with the potential of more public hearings and changes to the rules,
it could be 2015 before any medical pot is available to patients.

The law allows people with any of about three dozen specified medical
conditions - including HIV, muscular dystrophy and complex regional
pain syndrome - to get certified by a doctor to receive up to 2.5
ounces of marijuana every two weeks. Caregivers may also get certified
to buy and deliver pot to each patient.

While Colorado, where pot is legal for medical and recreational use,
has hundreds of growers and stores, the new Illinois law allows only
22 cultivation centers and 60 retail stores statewide.

That means the Illinois grow houses will be challenged not only to
meet strict requirements, such as being monitored roundthe-clock by
remote video surveillance, but also to crank out a lot of product,
while making it consistent and free from pesticides, mold and other
contaminants, said Erik Williams, a consultant for Gaia Plant-Based
Medicine, based in Colorado.

His company opposed fingerprint requirements for minority investors
and patients who need relief.

"To have almost a presumption they're criminals I don't think is the
right way to go," he said.

Potential patients and business operators have also asked the state to
remove a proposal to limit patients to one dispensary, instead arguing
that they should be able to choose whatever dispensary they find
offers products that best fit their needs.

The proposed rules generated interest from a wide array of potential
entrepreneurs and patients. A downstate farmer, an international
exchange student, doctors, pharmacists, consultants and a mortgage
banker, among others, all offered input.

The Illinois Hospital Association objected to the requirement that
doctors must review 12 months of medical records for each patient
before clearing the patient for medical marijuana use. The association
recommended that be left up to the discretion of physicians.

Others wanted regulations that would be more restrictive, not

The Illinois Sheriffs' Association asked that state agencies be
required to notify law enforcement of any fraudulent applications or
violations of the law.

Illinois Church Action on Alcohol & Addiction Problems suggested
prohibiting marijuana resin from the law, warning that its
concentrated form was dangerous.

And city of Chicago officials asked to change the rules so they have
more discretion over where dispensaries can locate.

"The City would then be in the best position to determine, consistent
with statutory and reasonable zoning restrictions, where the
dispensing organization should be located," officials said, according
to a letter from the city to the state.

One commenter, attorney Michael Jaskula, said he had no personal stake
in the industry but suggested authorizing lots of small growers rather
than a few big ones to promote small business.

"Regulators have an opportunity here to create hundreds, if not
thousands, of well paying jobs for small growers rather than creating
yet another giant corporate industry employing minimum wage earners,"
he wrote.

With an Illinois legislative committee expected to take a few months
before finalizing the rules, state agencies might be in a position to
start taking applications for patients and businesses this fall,
Illinois Department of Public Health spokeswoman Melaney Arnold said.
Consultants said it will take about three months to grow the first
batch of pot.

Permits to begin growing or dispensing medical pot will be awarded
based on a point system that has yet to be specified, Arnold said.

Generally, each grow center must meet requirements for suitability,
staffing, knowledge of laws and rules, product safety and a business
plan, with an emphasis on cultivation and security.

Dispensaries must also meet requirements for suitability, business
plan, knowledge and experience, with the tie-breaking factors being
security and record keeping.

As the restrictions and fees stand, businesses should expect to lose
money in the first two years because of significant required
investment, said consultant Silvia Orizaba. Though Orizaba previously
worked in the fitness industry, last year she founded the Medical
Marijuana Institute. Despite the hurdles, she said she knows of
proposals for dispensaries throughout the suburbs, including in
Evanston, Deerfield, Downers Grove, Naperville, Niles and Skokie.

After initial losses, she predicted, those in on the ground floor
stand to make millions of dollars.

"People that put in the money are going to make a lot of money," she
said. "We'll have to make it work with what they give us." 
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