Pubdate: Tue, 16 Aug 2016
Source: Washington Post (DC)
Copyright: 2016 The Washington Post Company
Authors: Aaron Gregg and Fenit Nirappil


Of the 15 companies cleared for cultivation, at least eight have ties 
to marijuana industries in other states.

 From page A1 Thirty businesses have won approval to grow and process 
medical marijuana in Maryland, regulators announced Monday, putting 
life into the industry more than three years after lawmakers 
legalized the drug for medical use.

Several of the winning applicants have political ties - with major 
donors or high-ranking officials on their teams - including a company 
that hired the Maryland lawmaker who was the driving force behind the 
tightly regulated program.

State officials received an unexpectedly large number of applications 
from entrepreneurs who want to jump into the legal marijuana 
business. Maryland, which along with 24 states and the District has 
legalized the medical use of the drug, is considered a lucrative area 
of opportunity because it has few restrictions on who can buy the 
drug and limits how many businesses can participate. Patients 
probably will not be able to obtain medical marijuana until summer 
2017 because dispensaries have not yet been approved.

Some of the cultivation and processing winners have high-ranking law 
enforcement officials on their teams, including two previous heads of 
the state Natural Resources Police, which is tasked with eradicating 
illegal marijuana cultivation in state forests. The head of the state 
police union also is involved with one of the approved applicants.

The Maryland Medical Cannabis Commission chose 15 growers from nearly 
150 applicants, and it chose 15 of 124 processors who applied to turn 
the marijuana plants into pills, oils and other medical products. 
Seven organizations received approval to both grow and process the drug.

The businesses must pass another round of background checks and a 
facility inspection before they are formally licensed to operate. 
Regulators have not yet awarded licenses to dispensaries where 
patients could get marijuana, and state officials are considering 
more than 800 applications for as many as 94 licenses, limited at two 
per state Senate district.

The field of applicants to grow and process marijuana included 
companies that recruited former law enforcement officials to guard 
their operations, growers from other states, and some with political 
ties. The identities of individuals involved with the companies were 
redacted from application materials in an effort to avoid the 
appearance of favoritism.

Of the 15 companies cleared for cultivation, at least eight have ties 
to marijuana industries in other states, including Colorado, New York 
and Illinois.

One of the politically connected companies is Doctor's Orders. The 
group hired Del. Dan K. Morhaim (D-Baltimore County), the 
legislature's top sponsor of medical marijuana legislation, to serve 
as clinical director of an affiliated dispensary.

Morhaim drew scrutiny from good-government advocates and rival 
medical marijuana companies for his involvement with an applicant, 
which he did not publicly disclose as he addressed regulators about 
the program and shepherded legislation to expand who can recommend 
marijuana for medical use.

Morhaim has said he followed the law throughout the process and 
cleared his dual roles with the General Assembly's ethics adviser.

Prominent developer and restaurant operator Jeff Black runs Doctor's 
Orders, with involvement from Brian Vicente and Christian Sederberg, 
partners at a Colorado law firm that advises marijuana-related 
businesses. Glenn Weinberg, a former executive from the Cordish 
Companies and the prominent developer that owns Maryland Live Casino, 
also is part of the group.

Other companies that won approval to grow or process marijuana include:

Forward Gro LLC, which was approved to grow marijuana in Anne Arundel 
County, has the county's former sheriff George F. Johnson IV as its 
security director and includes Gary Mangum, chief executive of Bell 
Nursery and a prominent Republican donor close to Gov. Larry Hogan (R).

Holistic Industries, which includes a former top state health 
regulator and the current head of the state police union on its team, 
won approval to operate a growing and processing facility In Prince 
George's County. The company is run by Josh Genderson, the 
fourth-generation owner of D.C. liquor store Schneider's of Capitol 
Hill, and former University of Maryland Medical School dean Donald 
Wilson. Also participating is Nelson Sabatini, the former head of the 
state Department of Health and Mental Hygiene who currently chairs a 
state regulatory commission.

Sunmed Growers, which was approved to operate in Cecil County, is led 
by Jacob J. Van Wingerden, president of a production company that 
sells wholesale potted plants to large retailers.

MaryMed LLC, which won approval to grow in Dorchester County, is run 
by Minnesota grower Kyle Kingsley. Kingsley's company, Vireo Health, 
is one of just two businesses licensed to grow in Minnesota, and also 
won a coveted license to grow in New York's competitive market. State 
regulators in New York and Minnesota have investigated the company 
based on allegations from a former employee that it transported 
marijuana across state lines.

Michael Bronfein, a healthcare executive and major donor to 
Democratic candidates, leads companies that won approval to grow and 
process marijuana in Baltimore County.

The Regional Economic Studies Institute at Towson University managed 
the evaluation of applications, recruiting subjectmatter experts to 
review and score materials. State-appointed members of the cannabis 
commission had the final say in approving businesses for involvement 
in marijuana production.

The commission initially agreed to award the planned 15 cultivation 
licenses to the applicants with the highest scores, regardless of 
their location in the state. But a last-minute motion from 
commissioner Harry Robshaw eliminated the applications that received 
the 14th- and 15thhighest scores; the commission moved up two 
lower-scoring applications to ensure that the companies approved to 
grow marijuana were more evenly distributed across the state.

The commission has not said how the winning applicants were ranked. 
Companies that did not win approval are not permanently shut out of 
the market, and the commission can award more licenses if supply 
falls short of demand. Some winners may choose to merge with other 
companies with state approval, giving them the option to, in effect, 
sell their rights to grow. The commission must approve mergers and 
could veto them if a prospective team member is found to have a 
criminal background or history of financial troubles.

Some of the most notable losing applications include: GTI Maryland, 
which had former U.S. Capitol Police chief and Senate 
sergeant-at-arms Terrance W. Gainer as its security director and 
former Baltimore Ravens tackle Eugene Monroe as an investor, and CBH 
Ventures, a team of former state troopers turned activists against drug laws.

Some well-financed out-of-state companies also faltered in their 
bids, including Minnesota grower Peak Harvest Health and New York 
health-care company Alternative Medicine Maryland.
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MAP posted-by: Jay Bergstrom