By JUSTIN SONDEL
BUSINESSES BIDDING FOR A MEDICAL MARIJUANA LICENSE
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ometime soon the five lucky winners of New York’s medical marijuana sweepstakes will be growing, processing and selling cannabinoids to a select group of ailing New Yorkers. The state is expected to wrap up its selection process sometime this month, and 38 other companies will walk away empty-handed after investing millions of dollars just for a chance at securing the precious licenses. Applicants had to submit a $10,000 application fee, $200,000 in collateral and proof that they had access to property suitable for growing and producing the treatment. Even after obtaining the rights to the production and sale of medical marijuana, the five companies will have to invest millions more to get their facilities up and running and establish dispensaries. They will face an uncertain market that is expected to experience slow growth at the outset due in part to the restrictive nature of the Compassionate Care Act, the law signed last year that governs the medical marijuana industry in New York. cit yandstateny.com
So why even get into this game? What makes it worth the initial investment, knowing how slim the chances are you will ever get the opportunity to carry out your carefully laid plans? Michael Mayes is the CEO of Quantum 9, a Chicago-based marijuana industry consulting firm with clients in weed-friendly states across the country, including New York. He says the appeal is in the longterm potential for growth. Though New York and his home state of Illinois have laws that create significant barriers to entering the market, the states are home to two of the largest metro areas in the country, offering an immense opportunity to any companies with the capital to withstand a few slow years in the beginning as patient trust in the system grows. Illinois’ program’s numbers are slim so far. Set to launch this fall, it has just over 2,500 patients registered. Some of the low participation, however, has been blamed on provisions specific to that state’s law, such as fingerprinting and background check requirements.
In other words, it’s a long-term investment, as opposed to states with more open medical marijuana laws like California and Oregon or legalized recreational marijuana use like Washington and Colorado. “New York and Illinois are longterm plays, as where Colorado or Washington would be short-term plays,” Mayes said. One of the main obstacles for New York’s medical marijuana growers could be the limited list of diseases for which physicians are allowed to prescribe the drug. The Compassionate Care Act currently allows for 10 diseases. Mayes said that as the program is rolled out and politicians hear from constituents who have benefitted from the use of medical marijuana, they are likely to push for an expanded list of diseases. In Illinois the list of diseases has expanded by 25 percent since their law was signed in 2013. “I believe New York will probably do something similar, where if they’re starting to see dismal patient populations the advisory board will have to add more ailments and
ADVANCED GROW LABS NEW YORK, LLC ALTERNATIVE MEDICINE ASSOCIATES, LLC BLOOMFIELD INDUSTRIES INC. BRIGHTWATERS FARMS LLC BUTLER EVERGREEN, LLC CANNICARE LLC CANNABIS OF AMERICA LLC (EMPIRE GREEN LABS) CITIVA MEDICAL LLC COLUMBIA CARE NY LLC CCCONY, INC. (COMPASSIONATE CARE CENTERS OF NY, INC.) COMPASSIONATE CARE WNY, LLC COMPASSIONATE SUNSET LLC (COMPASSIONATE RELIEF CENTERS OF NY) EMPIRE STATE COMPASSIONATE CARE, INC. EMPIRE STATE HEALTH SOLUTIONS LLC ETAIN, LLC FAR(M)ED NEW YORK, LLC FIORELLO PHARMACEUTICALS, INC. GOOD GREEN GROUP LLC GREAT LAKES MEDICINALS LLC HERBAL AGRICULTURE LLC HUDSON HEALTH EXTRACTS, LLC INTEGRATED SCIENTIFIC HERBAL ADVANCES, LLC KANNALIFE SCIENCES, INC. (KANNAGRO, LLC) KINEX SUPPORTIVE PHARMACEUTICALS, LLC LABCARE, INC MEDIGRO ORGANICS LLC MED MAR, LTD. MINDFUL MEDICAL NEW YORK, LLC NEPENTHEA LLC NEW YORK MEDICAL GROWERS, LLC NORTH COUNTRY ROOTS, INC. NEW YORK CANNA, INC. NY COMPASSION, LLC NY GROWING PARTNERS, LLC PALLIATECH NY, LLC PHARMACANN LLC ROSS JOHN ENTERPR ISES (GOOD LEAF) SALUS SCIENTIFIC, LLC SHEVA HEALTH & WELLNESS LLC SILVER PEAK NY LLC THC HEALTH INC. TILRAY NEW YORK, LLC VALLEY AGRICEUTICALS, LLC
Michael Mayes is CEO of Quantum 9, a marijuana industry consulting firm.
SPOTLIGHT: MEDICAL MARIJUANA
COMPANIES SPEND BIG COMPETING FOR AN UNCERTAIN MARKET
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city & state — July 17, 2015
WHY GET INTO THE GAME?