Distributors picked for NY medical marijuana program reflect industry's evolution, challenges



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ALBANY, New York — Tie-dyed they're not.

Entrepreneurs, physicians and well-heeled investors are among those authorized by New York health officials to grow and dispense medical marijuana, the latest sign that the industry has come a long way from its humble beginnings 20 years ago.

"You can't ignore that this is a billion-dollar industry," said Marc Ross, a New York City attorney who has studied the emergence of medical marijuana. "The big businesses are sitting on the sidelines now because they can't come out of the closet — not just yet anyway."

Of the five companies selected Friday that will grow and dispense the medication, three have significant experience in other states with existing programs. One vendor has three physicians on its board. Another boasts executives who have worked at Goldman Sachs and PepsiCo.

Since California's first legal medical marijuana dispensaries opened in 1996, 22 other states have passed their own medical pot laws as the industry evolved in the face of skepticism by investors and some in the medical community and a patchwork of conflicting state and federal laws.

Few states have a law as restrictive as New York's 2014 statute, which, for now, caps the number of dispensaries at 20 and requires the marijuana to be sold in non-smokable forms like oils and tinctures that can be ingested or vaporized. The dispensaries are expected to open in January.

The state's cautious approach reflects persistent concerns not only about the efficacy of the drug, but also about the risk that marijuana would be diverted for recreational uses. It frustrates advocates who note longstanding programs in many other states.

"It's not like we have to start from scratch," said Julie Netherland, deputy state director for the Drug Policy Alliance. "Twenty-two other states have done this. We know a lot more about medical cannabis than we did back in 1996. The medical cannabis industry has grown in sophistication."

New York officials maintained that they're using lessons learned in other states to create a program that ensures people get medication they need for conditions such as cancer, epilepsy and AIDS while discouraging abuse of the drug.

The five vendors selected by the state were chosen "through a rigorous and comprehensive evaluation process," according to state Health Commissioner Howard Zucker.

The winners are Bloomfield Industries, whose founder is entrepreneur Richard Yost; Columbia Care NY LLC, which operates medical marijuana facilities in four states and Washington D.C.; Empire State Health Solutions, which has experience opening a greenhouse and dispensaries in Minnesota; and PharmaCann, one of the largest operators in Illinois' program.

Executives at the companies said it takes much more than a greenhouse and a grow lamp to succeed in the business. Today's medical marijuana vendors tout partnerships with hospitals and boast of Wall Street business acumen. Columbia Care NY LLC is working with researchers from Mount Sinai Health System.

"Our commitment to sponsor research with our hospital partners will ensure that New York State will remain at the cutting edge of innovation by continually improving patient care," said Nicholas Vita, CEO of Columbia Care.

It's a big change from 20 years ago, when many in the medical community discounted claims about marijuana's therapeutic value and medical marijuana was dismissed by some as fringe science and a stealthy ploy for legalization.

The fifth vendor is perhaps the closest thing to a mom-and-pop business: Etain LLC is owned by Hillary Peckham and her siblings. Their interest in the industry began when their grandmother was dying of Lou Gehrig's disease and a doctor suggested marijuana.

"We watched that decline and had that experience of wanting to offer her anything that would have eased the suffering," Peckham said. "We want to help people get the medicine that can improve their quality of life."

Each of the five vendors will operate one cultivation facility and four dispensaries. Grow centers are planned for Queens, Orange, Monroe, Fulton and Warren counties. Four dispensaries are planned for New York City, with four more slated for the suburbs and the remaining 12 scattered throughout upstate New York.

Advocates predict the industry will continue to grow nationally and in New York, where there's already a push to allow more dispensaries.

"It's ludicrous because it's just not going to be enough, not for a state the size of New York," said Nancy Rivera, a Troy resident who became an advocate for medical marijuana after four bouts with cancer. "This isn't the law that we wanted passed in this state, and we're going to keep working at it."

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