Entrepreneurs in Florida are wondering how they will obtain cannabis clones and seeds, as the state’s recently approved cannabidiol (CBD) law does not provide any guidelines. Florida’s CBD program allows five companies to cultivate cannabis, synthesize it into CBD oil and then sell it via dispensaries spread strategically throughout the state. But the law does not outline how the businesses are supposed to obtain cannabis seeds, plants or tissue cultures for their first crop. It’s a common issue in new medical marijuana states, which typically fail to address how growers are supposed to get started. In many cases, officials simply look the other way, and cultivators obtain clones and seeds via the black market. Transporting cannabis across state lines is federally illegal, and entrepreneurs in Florida told the Sun Sentinel newspaper that they are unwilling to break the law to start their businesses. One of the co-sponsors behind the CBD bill, Democrat Katie Edwards, said the state could possible obtain cannabis through the University of Florida, which could procure it from the federal marijuana research project at the University of Mississippi. That plan present a problem: the Mississippi farm has not disclosed which strains of cannabis are under cultivation there, and high-CBD strains may not be available. Another co-sponsor, Republican Matt Gaetz, said the easiest way to obtain the initial marijuana needed is “a nondescript white van moving along I-10.” “How these entities get started is clearly not something set forth in the law I passed,” he said. “I think...
New Jersey’s medical marijuana industry is struggling to gain traction, with dispensary owners saying the state’s process for registering patients is severely limiting the market.
Just six months after opening, Compassionate Care Foundation in south New Jersey has only attracted 600 or so patients. The number is far lower than the 5,000 patients Compassionate Care CEO Bill Thomas projected for its first year.
The climate is so challenging that Thomas has delayed a $357,000 expansion to his cultivation facility.
Greenleaf Compassion Center in Montclair – the first dispensary to open in New Jersey – has only 300 patients, while Garden State Dispensary in Woodbridge currently serves 1,300 patients even though it has the ability to handle up to 25,000, according to the Philadelphia Inquirer.
Currently, about 2,200 patients have registered with the state to purchase cannabis. Advocates believe the state’s process for registering medical marijuana patients is cumbersome and expensive, which turns potential customers away.
Patients say the registration process takes three months on average and costs about $1,000, including doctor visits. Once registered, patients can only purchase marijuana flowers, which run about $400 an ounce.
Advocates are trying to widen the net of patients to increase business. The Alternative Treatment Center Association, which represents the dispensaries, recently submitted a proposal to the New Jersey Health Department to allow delivery of medical marijuana to hospice facilities, hospitals and nursing homes.
The group also proposed a plan to allow the creation of marijuana lozenges, topical lotion, skin patches and capsules.
Starting a medical marijuana business in Massachusetts is not for the faint of wallet. A company that received two of the 20 provisional dispensary licenses awarded by the state anticipates shelling out at least $9 million in startup expenses and initial operating costs. New England Treatment Access (NETA) will open storefronts in Brookline and Northampton as well as a cultivation facility in Franklin later this year. The company’s two principles – Kevin Fisher and Arnon Vered – said roughly $3.8 million will cover infrastructure costs all those locations, while $5.2 million will float the entire operation until its projected break-even point in the first quarter of next year. The funding comes via a loan from businessman Howard Kessler, who owns a financial services consulting company in Boston. Fisher and Vered have ambitious revenue projections. They estimate the business will bring in $9.8 million in 2015 under the assumption that each patient will purchase 1.6 ounces per month with average prices of $4,800 per pound. The two hope to grow revenues to $19 million by 2017 and reach a peak patient count of 3,200 in 2016. The numbers highlight the sizable financial risk of opening a dispensary in a restrictive market. NETA’s revenue projections could be impacted by unfriendly neighbors, price fluctuations, market size and patient purchasing habits, among other factors. The figures also underscore the enormous capital costs required to open a medical marijuana business in a restrictive market. First-generation medical marijuana entrepreneurs in less restrictive states such as Colorado, California...