Pubdate: Fri, 13 Nov 2015
Source: Baltimore Sun (MD)
Copyright: 2015 The Baltimore Sun Company
Contact:  http://www.baltimoresun.com/
Details: http://www.mapinc.org/media/37
Author: Erin Cox

MEDICAL POT IN STATE IS DELAYED

Officials Swamped As Almost 900 License Applications Flood In

Maryland officials said Thursday that they expect to delay the 
state's medical marijuana program as they sort through a deluge of 
nearly 900 applications from businesses seeking licenses to grow, 
dispense or process the drug.

The crush of 882 applicants brought in more than $1 million in 
license fees and prompted officials to push back plans to grant 
preliminary approval to licensees by mid-January.

Extending the deadline to review, score and award the licenses into 
next year "in turn will extend the overall program rollout," said 
Hannah Byron, executive director of the Medical Cannabis Commission.

"It is too early to determine what the new schedule will be," she added.

Byron called it a "tremendous response." The final tally of 
applications is more than twice the number the commission initially 
announced Friday as applications were pouring in.

The surge surprised other applicants and even industry insiders, 
given that each application called for more than 60 pages of detailed 
information, including demonstrated support from local officials, 
plus a $1,000 to $2,000 application fee.

"I don't know anyone who thought they would get 900 applications for 
this program," said Darrell Carrington, executive director of the 
Maryland Cannabis Industry Association. "You have to earn it. Those 
people who get licenses will have put in an enormous amount of work."

There were 102 applications for the 15 licenses available to grow and 
cultivate marijuana - nearly seven applicants for every license. 
Another 75 applications came in for an unlimited number of processor 
licenses to turn the drug into oils, tinctures or edible products for patients.

The vast majority of the applications - 80 percent - were for 
licenses to operate one of about 100 dispensaries allowed under state 
law to distribute the drug.

While more than 700 dispensary applications were filed, a 
"significant" number of people applied to open 47 separate 
dispensaries - one in every legislative district in the state - in an 
attempt to hedge their bets. By law, a business can only hold one 
dispensary license.

The tactic suggests some Maryland applicants have deep pockets and 
didn't want to miss out on a new medical pot market, industry experts said.

"If you have $100 million in your pocket, $47,000 is nothing," Carrington said.

Byron said the huge pool of applicants ensures the state's cannabis 
commission will find qualified candidates and that the medical 
marijuana program will be able to support itself without being 
subsidized by taxpayers. The General Assembly law passed in 2014 to 
create the program called for it to be self-funded.

The applications will be reviewed and ranked by an independent third party.

Under the preliminary timeline, the state had anticipated that 
dispensaries could be open by the end of 2016.

A delay in awarding licenses could come at a cost to some applicants, 
experts said. For instance, if an applicant had secured a tentative 
land deal to develop a processing facility, the company might have to 
pay more as it waits for word on whether it secured a license.

Ross Morreale, director of special projects with Maryland Natural 
Treatment Solutions, said his Illinois-based company applied to open 
25 dispensaries just to make sure they were the top-ranked applicant 
in at least one location.

"To me, 47 seems excessive, but maybe 25 seems excessive to people," 
Morreale said.

His company hopes to build a growing and processing operation near 
Federalsburg in Caroline County, near the Delaware border.

To make their application more attractive, company representatives 
met with local officials and promised the county Health Department 
they would be willing to donate money to a program that helps clean 
up properties once used as methamphetamine labs.

Attillio J. Zarrella, Caroline County's deputy health director, said 
three companies offered a presentation on the benefits of their 
operation. He said he wrote a letter supporting Maryland Natural 
Treatment Solutions' efforts and that he liked the philanthropic 
promises they made.

Maryland, Morreale said, is worth the investment in part because the 
state's program allows a wide range of patients to qualify for 
medical marijuana treatment, including those suffering from chronic pain.

"We understand there's a lot of opportunity in this business, and 
with that comes responsibility for the community in which you 
operate," he said, which was part of his pitch to Federalsburg's 
leaders. "If the local officials don't want you there, if the 
residents don't want you there, then why go there?"

The state also plans to let patients from outside Maryland become 
eligible to receive the drug by seeing a Maryland doctor - another 
reason applicants said the market is attractive.

Kevin Kennedy, whose Kojak Industries operates a growing, processing 
and dispensing operation in Arizona, called Maryland's initiative 
"the first significant medical cannabis program on the East Coast."

That - and the possibility of a large patient pool - drove the 
intense competition in the licensing process, he said.

Some investors also are eyeing Maryland with plans for the future, 
hoping they'll be in on the ground floor if the state legalizes 
marijuana for recreational use.

Taylor West, deputy director at the National Cannabis Industry 
Association, said the states that have legalized marijuana built that 
industry on top of successful medical marijuana programs.

Mike Gimbel, the former drug czar for Baltimore County and an 
opponent of medical marijuana programs, said the breadth of moneyed 
applicants signals to him that the state will soon be under pressure 
to expand its program further.

"I know we're starting small in Maryland, but we all know that's just 
the first phase in getting them open," Gimbel said. "The next phase, 
there will be more."
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MAP posted-by: Jay Bergstrom