Pubdate: Sun, 26 Jun 2016
Source: Washington Post (DC)
Copyright: 2016 The Washington Post Company
Contact:  http://www.washingtonpost.com/
Details: http://www.mapinc.org/media/491
Authors: Fenit Nirappil and Aaron Gregg

Former Drug Enforcement Administration agents. The leader of a 
Maryland statewide police union. Former military leaders and 
government officials. Former Baltimore Ravens tackle Eugene Monroe. 
Doctors, a pastor and a rabbi.

THEY ALL WANT TO PROFIT FROM MEDICAL MARIJUANA IN MARYLAND

The people lining up to profit from Maryland's legal 
medical-marijuana market include former sheriffs and state lawmakers, 
wealthy business executives and well-connected political donors, 
according to previously undisclosed public records obtained by The 
Washington Post.

Nearly 150 businesses are competing for up to 15 cultivation licenses 
that will be awarded starting this summer, the first footholds in an 
emerging industry that is already worth billions nationally.

Very few applicants have publicly discussed their plans. But through 
a public-records request and database searches, The Post identified 
more than 950 people working for or investing in prospective growing 
operations in Maryland. Among them: former Drug Enforcement 
Administration agents; the leader of a Maryland statewide police 
union; former heads of the Department of Natural Resources police; a 
former U.S. Capitol Police chief; and Eugene Monroe, the recently 
released tackle for the Baltimore Ravens who is the foremost advocate 
of medical marijuana in the National Football League.

They are competing against prominent executives with ties to Gov. 
Larry Hogan (R) and Bill and Hillary Clinton; successful pot growers 
from other states and countries; former law enforcement and state 
government officials and military leaders; doctors; a pastor; and a rabbi.

"There's good money to be made off of it," said Stanford "Neill" 
Franklin, a retired state police major who went from undercover drug 
busts on college campuses to advocating against drug laws and 
applying to grow marijuana. "But there also needs to be enough 
companies doing things aboveboard, ensuring children have as little 
access as possible . . . and being a positive force for the community."

The entrepreneurs are drawn by Maryland's tight restrictions on who 
can grow and sell marijuana and relatively few limits on who can buy 
it - rules that should maximize potential profits. Some consider 
medical pot a precursor to broader legalization, as it was in 
Colorado, the District, Oregon and Washington state. In Colorado, 
sales of medical and recreational marijuana last year totaled nearly 
$1 billion.

Applicants are "betting on the idea that the law will be expanded," 
said Troy Dayton, chief executive of San Francisco-based Arcview 
Group, which researches marijuana-market potential. "The few people 
who get [licenses] are going to do really well."

Creating the market

Medical marijuana has been legalized in 24 other states and the 
District; the law authorizing Maryland's program was approved in 
2014. The state was supposed to issue its first cultivation licenses 
in January. But a crush of applications, and bureaucratic growing 
pains, delayed the timetable until late July at the earliest.

In addition to choosing up to 15 growers, Maryland will award as many 
as 15 licenses to process marijuana, choosing from among 128 
hopefuls, and select 94 businesses to sell the product, out of 811 
applications. Some teams applied for all three licenses.

In an effort to make the selection process as fair as possible, the 
application materials seen by reviewers do not include the names of 
individuals involved with each venture.

Arcview estimated in February that cannabis sales in Maryland would 
total $9.7 million the first year, likely starting in mid-2017, and 
reach $60 million by 2020. But those projections will increase as 
Maryland loosens restrictions. Since February, for example, lawmakers 
have voted to allow dentists, nurse practitioners and others to 
recommend marijuana, in addition to doctors. The state commission is 
considering whether to categorize additional conditions - including 
autism - as appropriate for treatment with the drug.

Some observers say they expect Maryland to follow the example set by 
Arizona, which allows pot prescriptions for a wide range of 
conditions and logged sales of more than $200 million last year. 
Maryland lawmakers are watching states that have legalized 
recreational use of marijuana to weigh whether their legislature 
should do the same.

Growers of medical pot in Maryland "will have very, very viable plans 
to move into recreational cannabis," said Darrell Carrington, a 
lobbyist on the medical-marijuana law and leader of a trade group.

Law and order

The Post investigation shows that many applicant teams include 
current and former law enforcement or military officials. Some spent 
their careers cracking down on illegal drugs. Some changed their 
minds about pot after losing a loved one or watching a sick person 
benefit from medical cannabis.

Former DEA special agents Paul Higdon, Charles Tomaszewski and 
Patrick Witcher are advising several companies, while former IRS 
criminal division special agent Jacque Riordon is the compliance 
officer for AltPharm, a company headed by her nephew. Jon Tortora, a 
former Department of Homeland Security counterintelligence officer 
who leads anti-fraud programs for the Social Security Administration, 
is the managing member of cultivation applicant CWS LLC.

Former Cecil County, Md., sheriff Barry Janney, who still runs the 
county's minimum-security jail, is part of the application submitted 
by True Health Chesapeake. In the same county, retired Syracuse, 
N.Y., police chief Dennis DuVal, who briefly played for the 
Washington Bullets in the 1970s, joined a company called Citiva 
Maryland. Former Allegany County, Md., police chief Bobby Dick is 
head of security for Peak Harvest Health, a role former U.S. Capitol 
Police chief Terrance W. Gainer has taken on for GTI Maryland. And 
former Army Major Gen. R. Blunt, who once led the 12,000-member 
reserve unit at Fort Meade, is involved with Kisima Nursery LLC.

Franklin, the former state trooper, gave up on the war on drugs when 
a colleague was killed during an undercover buy in 2000. He and his 
former colleague, retired captain Leigh Maddox, advocate for 
legalization through a group called Law Enforcement Against 
Prohibition and applied for a growing license in Harford County, 
northeast of Baltimore. Their team, CBH Ventures, includes lobbyist 
Sara Love, who works for the American Civil Liberties Union but is 
acting on her own in the pot venture.

"It's ironic, isn't it?" Maddox said. "I'm a cop. This doesn't make 
sense to anybody."

Ismael "Vince" Canales, head of Maryland's Fraternal Order of Police, 
said in 2013 that drug laws should not be watered down. Then a 
relative used marijuana to treat symptoms of multiple sclerosis. 
Today, Canales is an investor and head of security for a proposed 
growing operation headed by Josh Genderson, who has been growing and 
selling medical marijuana in the District for years - and pays 
Marcello Muzzatti, the former head of the D.C. police union, to 
protect his crop in the nation's capital.

"The state has made the decision," said Canales, a former homicide 
detective in Prince George's County. "It's not up to me to decide 
whether this is legal or not."

George F. Johnson IV, a former Anne Arundel County sheriff, ended his 
law enforcement career as superintendent of the state Department of 
Natural Resources police, overseeing a unit that eradicated several 
illegal marijuana growing areas in state forests. He railed against 
legalization of pot when he unsuccessfully ran for Anne Arundel 
county executive in 2014.

But he, too, changed his mind after a friend introduced him to Gail 
Rand, an Annapolis woman who advocates for medical cannabis in hopes 
that it would help her epileptic son. Rand persuaded Johnson to 
become director of security for an applicant called Forward Gro Inc.

"It could be shoe sales," said Doug DeLeaver, a former highranking 
state trooper who led police divisions in three state agencies and 
was recruited as security head for a different applicant, Curio 
Cultivation. "It could be anything that you are protecting."

DeLeaver says he will leave his job as director of government affairs 
for the Maryland Transit Administration if Curio Cultivation gets a 
license. Ever the trooper, he carefully vetted the leader of the 
company before taking the job. That man was Michael Bronfein, one of 
several well-known business executives looking to break into 
Maryland's cannabis industry.

Politically connected

Bronfein, 60, made a name for himself in health care, leading 
Maryland companies that provide prescriptions to nursing homes. He is 
managing partner at a private equity firm and part of a team that 
owns a stake in Baltimore's Horseshoe Casino.

Bronfein was the top fundraiser for Kathleen Kennedy Townsend's 
failed 2002 gubernatorial bid. He and his wife and business partner, 
Jessica Bronfein, have poured more than $60,000 into Maryland 
campaigns in recent years. They are among 146 people who have donated 
to all six of Bill Clinton's and Hillary Clinton's federal races.

For Curio Cultivation, Michael Bronfein teamed up with experienced 
growers from Maine and Canada to apply for cultivation, processing 
and distribution licenses. "I'm incredibly superstitious, so until I 
have a license, I really don't want to talk about it," Bronfein said 
in a brief phone conversation.

Other applicants were similarly guarded, including Republican donor 
Gary Mangum. Known as the "king of petunias," he's chief executive of 
Bell Nursery, which grows flowers sold at Home Depot. He is part of 
Forward Gro, the company that employs Rand, the pot activist, and 
Johnson, the former Anne Arundel sheriff.

Mangum, who declined an interview request, was on Hogan's transition 
team and was appointed by the governor to the Maryland Stadium 
Authority. He has given $120,000 to state Republicans since 2010, 
hosted a Hogan campaign fundraiser at his Eastern Shore mansion and 
organized a celebration of the first anniversary of the governor's election.

Retired federal judge Alexander Williams, a former Prince George's 
County state's attorney who co-chaired Hogan's redistricting reform 
commission, is general counsel for applicant MMRC. Lionel Moore, who 
until recently was director of the family division of Prince George's 
County Circuit Court, and his wife, Dominique Moore, a Baltimore 
housing commissioner, also are applying to grow medical marijuana.

Other politically connected applicants include Raj Mukherji, a New 
Jersey state lawmaker whose team operates a large cultivation center 
in his home state and unsuccessfully sought to expand to New York; 
and Edward Weidenfeld, a longtime Washington lawyer who was general 
counsel on Ronald Reagan's 1980 presidential campaign and is working 
with D.C. pot entrepreneur Andras Kirschner.

Among the applicants with ties to Maryland state government is 
Michelle Gourdine, a top health official under former governor Robert 
L. Ehrlich Jr. (R) who serves on the board of the Maryland Health 
Benefit Exchange and is secretary of the University System of 
Maryland Board of Regents. There are also James Ronald DeJuliis, a 
former top labor regulator, and former state delegates Jon S. Cardin 
(D-Baltimore County) and David Valderrama (D-Prince George's County).

Valderrama, who pushed unsuccessfully for medical marijuana as a 
lawmaker in the early 2000s, says he is trying to help a friend and 
assisted-living facility operator compete with more established rivals.

"It's little guys going against the big guys," he said.

Strangers in town

Maryland businesses are supposed to get preference in the licensing 
process. But some outof-state entrepreneurs have tried to circumvent 
that by setting up local subsidiaries or looking for investors. While 
all but seven applicants to grow marijuana say they are 
Maryland-based, nearly a third of the applications include at least 
one person who has marijuana business ties in other states, according 
to disclosure records given to The Post.

When Illinois-based Green Thumb Industries was exploring a venture in 
Maryland last summer, executive Pete Kadens approached Eugene Monroe, 
then a tackle for the Baltimore Ravens. The company had heard from 
other Maryland-based partners that the football player was privately 
supportive of medical marijuana.

"You have to have residents and champions and influencers on the 
ground . . . who know the market, know the key people and know how 
the game is played," Kadens said.

Monroe agreed to invest after spending two months vetting the company 
and considering other potential growers, Kadens said. He has closely 
watched the approval process, even attending commission meetings, and 
this year became a vocal advocate for using medical pot. Until now, 
his investment in Green Thumb Industries was not publicly known.

Some out-of-state applicants hail from Colorado's thriving 
recreational market, while others are rebounding from a fiercely 
competitive process in New York that awarded five medical-marijuana 
licenses out of 43 applicants.

There's Ethan Ruby of Peak Harvest Health, a grower and activist who 
learned the trade in Colorado before setting up shop in Minnesota and 
Connecticut and amassing more than $12 million for a proposed 
expansion into Maryland. And there's Brian Vicente and Christian 
Sederberg, partners at a Colorado legal practice that advises 
cannabis businesses and calls itself "the marijuana law firm."

Physician Greg Daniel created Alternative Medicine Maryland, a local 
subsidiary of his company based in Buffalo, N.Y., after narrowly 
missing out on licenses to grow medical pot in New York and Hawaii. 
Daniel, who founded and sold a national chain of urgent-care centers, 
calls marijuana "a pharmaceutical that needs to become mainstream." 
He says he has close to $25 millocal lion to invest in a cannabis 
operation inside an old Black & Decker factory in Easton, Md., and is 
trying to secure research partnerships with Canada and Israel.

To knock on doors in Annapolis, he hired John Pica, a former state 
senator-turned-lobbyist, and former Baltimore housing commissioner 
Danny Henson. To help with security, he hired Tomaszewski, who worked 
as a DEA special agent in Baltimore in the late 1990s.

At least two of the five businesses that won cultivation licenses in 
New York - PharmaCannis and Columbia Care - have also applied in 
Maryland through subsidiaries set up in the state, the application 
documents show. Columbia Care is teaming up with David Guard, who 
operates a dispensary in the District, where medical pot has been 
allowed for six years.

There is also global interest in Maryland's market. Yehuda Baruch, a 
physician who was the top regulator during the first 10 years of 
Israel's medical pot program, is applying to grow the drug with the 
help of former Laurel, Md., mayor and state delegate Bob DiPietro.

A local approach

Other applications appear to be completely homegrown, including the 
one submitted by Genderson, the fourth-generation owner of the wine 
and liquor store Schneider's of Capitol Hill.

He said his experience selling alcohol made for an easy transition to 
growing medical marijuana in the District once it became legal, and 
to secure a license to grow in Massachusetts after that state began 
its medical cannabis program in 2013. He was so pleased with the 
security Muzzatti, the former D.C. police union chief, was providing 
for his pot plants in Washington that he sought out Canales, the head 
of the police union in Maryland, to do the same if he gets a license there.

Genderson's partners include two longtime friends, Nelson Sabatini 
and Donald E. Wilson. Wilson, a physician, was dean of the University 
of Maryland School of Medicine. Sabatini headed Maryland's Department 
of Health and Mental Hygiene, the agency that oversees the medical 
pot regulating commission.

Other members of Genderson's family submitted a separate growing 
application, through a business called Rosebud Organics. Their 
investors include Rabbi Jeffrey Kahn, who sells the finished product 
at his dispensary in the District's Takoma neighborhood. Kahn is also 
applying for his own dispensary license, and he says he hopes to 
operate storefronts just blocks apart from one another across the 
D.C.-Maryland line.

Kahn is not the only member of the clergy to see the medical value of 
pot. Gareth E. Murray, a former state delegate who is associate 
pastor of First Baptist Church of Silver Spring, is part of the 
application submitted by PhytaGenesis, which wants to grow on 
farmland in Charles County. Murray says the company should remain 
strictly medical and not venture into recreational sales.

Charles Mattingly's marijuana dreams are also based in Southern 
Maryland, on the 27-acre former tobacco farm in St. Mary's County he 
inherited from his grandfather.

After a foray into customizing cars and tinting windows, Mattingly 
wanted to return to farming. But he saw no money in tobacco. He went 
to a cannabis business conference in Las Vegas and began envisioning 
two large greenhouses and a processing facility on his land.

Mattingly hired a Colorado consultant to help with the application 
and growing, spoke with a former DEA agent about security, and 
convinced local county officials that a cannabis business could fit 
in with the community.

He says he has set aside $7 million for his venture, mostly from the 
sale of farmland, and has rented space for a possible dispensary in 
Mechanicsville, Md. He wants to buy a 20-by-20-foot reinforced steel 
door from a closing community bank and use it to build a backroom 
vault. And he is convinced that the federal government will soon 
change its views on marijuana, opening up industrial-scale markets 
for recreational pot or its sister product, hemp.

"That's the next big thing here for local farmers," Mattingly said. 
"This is going to be 10 times what they ever made on tobacco."
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MAP posted-by: Jay Bergstrom