Pubdate: Mon, 28 Jun 2010
Source: Portland Press Herald (ME)
Copyright: 2010 Blethen Maine Newspapers Inc.
Contact:  http://pressherald.mainetoday.com/
Details: http://www.mapinc.org/media/744
Author: John Richardson

OUT-OF-STATERS EAGER TO INVEST IN MEDICAL POT

Maine's new medical marijuana law has two key  conditions for those
who want to open one of the  state's first dispensaries.

Operators have to be Maine residents, and they have to  register as
nonprofits.

Neither condition, however, has kept investors and  entrepreneurs from
coming from outside the state to be  part of the new industry.

Several of the groups that applied for operating  licenses last week
are led by recent arrivals from  California or other states where they
learned the  medical marijuana business. One group with California
connections even hopes to open five of the state's  eight dispensaries
- -- and, to improve its odds, it  hired the Augusta lobbyist who helped
write Maine's new  law. Local applicants say they've been called by
investors from around the country who want to help  finance the
dispensaries.

The interest from away raises questions about just how  lucrative the
nonprofit businesses will be. And, while  some in Maine welcome the
interest and business  experience from away, others say the newcomers
only  want to benefit themselves.

"It's not outside people coming to help patients. It's  outside people
coming to take money out of the state,"  said Charles Wynott of
Westbrook, a medical marijuana  patient and one of the advocates who
helped pass  Maine's new law.

State officials are now reviewing 29 applications to  operate eight
dispensaries, one in each of the state's  public health districts. The
Department of Health and  Human Services plans to award the eight
licenses July  9, and the first dispensaries are expected to open for
business this fall.

Meeting the Maine residency requirement is as easy as  moving to the
state, as a number of aspiring dispensary  operators have done in
recent months.

The not-for-profit requirement means that dispensaries  cannot issue
shares of stock or pay out profits in the  form of dividends to investors.

However, Maine law allows a dispensary to pay  "compensation in a
reasonable amount to its members,  directors, or officers." The law
does not define a  reasonable salary and doesn't set any specific
limits  on pay.

Some say the state's rules, and a limited market size,  mean medical
marijuana won't be the lucrative business  here that it is in other
states. Maine also has  relatively tight limits on who qualifies to
buy medical  marijuana, although the list of illnesses and  conditions
can be expanded in the future.

"I think a lot of that (out-of-state interest) is  wishful thinking,"
said state Sen. Stan Gerzofsky,  D-Brunswick, a member of the task
force that shaped the  final state law. "I don't see a lot of profit
to be  made because I don't see a lot of volume. I don't see a  lot of
patients."

'THERE'S MONEY HERE'

No one knows how many patients will buy marijuana from  the
dispensaries. However, advocates say tens of  thousands of ill and
disabled people qualify in  Cumberland County alone. And while dosages
are much  smaller for some people, a patient is allowed to buy as
much as 2.5 ounces -- about $700 worth -- every 15  days.

"There's money here," said Wynott. "Once this thing  gets legalized,
there's going to be a lot of people  waiting to get their medicine."

And even if a dispensary can't pay out profits in  dividends, he said,
"you can still pay your board of  directors and employees."

Brendan McGann of South Portland said out-of-state  groups clearly see
dollar signs.

McGann is a director of the Maine Wellness Group, which  applied for
licenses in three districts and is  positioning itself as a home-grown
operation run by  local medical marijuana patients and caregivers.
Although the Maine Wellness Group has been getting  calls from
out-of-state investors wanting to put money  into the startup and get
on the payroll, he said,  "We've just essentially been turning them
all down."

CALIFORNIA CONNECTIONS

McGann is especially critical of the Northeast Patients  Group, which
has connections to Berkeley Patients Group  in California and has
applied for licenses in some of  the same districts as his group.
Northeast is led by a  recent California transplant and represented by
Dan  Walker, an Augusta-based attorney and lobbyist with  Preti
Flaherty who served on the state task force that  drafted the state
law.

"They've been spending money hand over fist since the  day they showed
up here," McGann said. McGann recently  confronted Walker outside a
meeting and accused him of  unofficially lobbying for the Berkeley
Group even while  he served on the state task force.

Walker denied having a conflict of interest and said  last week he
didn't sign on with Northeast Patients  Group until after the law was
voted on by a legislative  committee. "I worked on the task force
until it ended  and never accepted a dime," he said.

Walker said he chose to work with Northeast Patients  Group over other
groups who wanted to hire him partly  because of its California
connection and proven track  record there. One of Berkeley's
directors, Tim Schick,  is from Maine and helped advise policy makers
here.

"He really felt a responsibility to help Maine not make  the mistakes
California did," Walker said.

Northeast is a Maine nonprofit with four Mainers on its  board of
directors, and the money it earns and gives to  charity will stay in
Maine, too, he said. "The model  that we're working on is you pay
everyone a salary, you  invest the money back in (the business) and
you donate  the money back into the community," Walker said.

Ken Altshuler, a Portland attorney who also served on  the state task
force, said he has declined to represent  dispensary applicants,
although he would not  second-guess Walker's decision.

IS PROFIT A PROBLEM?

Altshuler doesn't believe where an applicant comes from  is important,
especially if it has a good track record  like the Berkeley group
does. And he's not concerned  that money might be motivating applicants.

"The dispensaries are going to make money, we know  that. So do drug
companies. If we're not going to care  about them what makes pot so
special?" he said. "Nobody  who runs a dispensary has an altruistic
motive. Money  is always the motive and I'm OK with that. I just want
people to get the quality medicine they need."

Patient advocates say they will be watching closely to  see whether
Maine's dispensaries become the kind of  patient-friendly operations
that the rules were written  to encourage.

Jonathan Leavitt, who led the campaign to pass the  medical marijuana
law last fall, said Maine has a  chance to create a new model, but it
may require some  more changes in the law.

"How do we prevent these things from coming under the  control of a
whole corporate economic world?" Leavitt  asked.

"I think we need to implement some other mechanisms  that guarantee
that these dispensaries are here to take  care of patients first and
foremost."
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MAP posted-by: Matt Elrod