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While one cannabis company plans its buildout in our broadcast region, others want to challenge their licensure. Where does all of this leave medical marijuana patients? WMRA’s Randi B. Hagi reports.
When the Virginia Cannabis Control Authority chose a medical marijuana provider for a large portion of the state last month, they unleashed the winning company to build cultivation, distilling, and retail facilities – and those that were not chosen, to mount a legal challenge to the selection process.
After 41 applicants were whittled down to 33 finalists, the authority chose the provider for “Health Service Area 1” by random lottery. AYR Wellness is the parent company that won. They operate nearly a hundred dispensaries across eight states. According to their application, AYR is making a capital investment of $20 million into their Virginia subsidiary.
Virginia Cannabis Control Authority
HSA 1, where AYR Wellness is now authorized to distribute medical cannabis, is shown in blue on this map. The black dots mark the locations of dispensaries around the state.
GEORGE DENARDO: I have been involved with the Virginia medical market since its conception with other operators. I’m very familiar with what the patients are looking for.
George DeNardo, AYR’s chief operating officer, came to the company after several years with Columbia Care, according to LinkedIn. That’s now known as The Cannabist Company, which operates dispensaries around Richmond.
AYR Virginia’s application listed an undeveloped property in Clear Brook, Frederick County, as the possible site for their headquarters. Virginia law requires pharmaceutical processors to have one location where they grow, process, and sell medical marijuana. Then they can establish up to five satellite dispensaries within their health service area.
Randi B. Hagi
The Frederick County property listed in AYR’s application as a possible headquarters location sits amid a few industrial facilities and farmland.
DENARDO: We’re looking at all options right now… Obviously, you know, we’ve got to work with the local governments on zoning … but we also look for access to highways, easy transportation for the patients to get to either our co-located facility or one of our satellite facilities.
So, the Clear Brook site is not set in stone. The county’s public information officer told WMRA in an email, [quote] “While we know what AYR has released publicly, at this time we have no information from them regarding their locating in Frederick County.” [end quote]
DeNardo said they’re looking at properties zoned for light industrial use.
DENARDO: There’s a lot of things that go into these decisions to make sure that we are able to get zoned correctly and then build out as quickly as possible. … So, making sure that we have enough power, we don’t have to update transformers, things like that.
In the meantime, some of the companies that were not chosen plan to challenge the authority on how they made their decision, by lottery.
TANNER JOHNSON: The situation was botched, the wrong company won, and we need to kind of cushion that blow of having all out-of-state companies and let some Virginia companies into the mix to balance out this medical monopoly, as a lot of people call it.
Tanner Johnson is the CEO of Pure Shenandoah, which produces CBD products in Rockingham County. An attorney for both his company and Blue Ridge Medical announced their intentions at the authority’s last board meeting. They were two of the only applicants based in Virginia.
Randi B. Hagi
Tanner Johnson is the CEO of the Elkton-based family business Pure Shenandoah.
JOHNSON: If you care about your community and patients and you’re actually from the area, that’s an intangible that’s hard to put a number on, right? And we believe that it would have had a tremendous effect on our ability to serve the market compared to a company where this is their ninth license, and … you know, they just think this is another spot to make some money, more than anything.
Johnson said they don’t know yet which court they’ll do this through. DeNardo said it won’t delay AYR’s plans, although they don’t have a set timeline for opening to the public.
DENARDO: I haven’t seen a selection process that hasn’t been challenged in court across the country. … We feel fortunate that we were selected, and we look forward to serving the patients in Virginia.
An odd quirk of this process is that it allowed one company to apply 21 times by creating separate LLCs with different names. All 21 subsidiaries of TheraTrue made it to the final round, meaning they accounted for almost two thirds of the finalists – and still didn’t win. With an $18,000 application fee on each one, TheraTrue paid the authority $378 ,000 to try and stack the odds in their favor.
A Q&A from the authority notes that “submitting multiple entries is not consistent with the spirit of the application process,” but legally, they couldn’t stop someone from doing it.
TheraTrue, which has a dispensary in Cleveland, Ohio, did not respond to multiple interview requests.
Regardless of which company ends up building dispensaries from Winchester to Charlottesville, marijuana advocates say it’s long overdue. This region has gone without medical marijuana because the original pharmaceutical processor lost their license and then tied up that decision in court for three years.
JM Pedini
JM Pedini is the executive director of Virginia NORML and the development director for the national organization. They host a weekly, virtual Q&A session about cannabis policy and science on Fridays at 4 p.m.
JM PEDINI: For Virginia patients, this process has taken far too long, and these multiple lawsuits, while they may have business interests behind them, are really harming patients. They need access. They need convenient access, and they need it now.
JM Pedini is the executive director of Virginia NORML, which stands for the National Organization for the Reform of Marijuana Laws. They said most patients seek out medical marijuana to treat anxiety, pain, and insomnia.
PEDINI: Virginia’s medical cannabis program is really operating under an outdated model. This was adopted by the Virginia General Assembly some years ago, and it involves limited licensure, a limited number of patient access points, and that is a real flaw in the state’s program.
Ultimately, an expansion of the entire medical market is what Pure Shenandoah is hoping for, too. That would require new legislation –
JOHNSON: Which would just add a few more licenses in each HSA. … Recreational is so far behind that we just need to keep making some progress there because patients and consumers in Virginia just need it.
While Gov. Glenn Youngkin nixed a recreational retail market earlier this year, he has signed some legislation favoring marijuana patients – protecting public employees from being fired for using medical cannabis.
“}]] While one cannabis company plans its buildout in our broadcast region, others want to challenge their licensure. Where does all of this leave medical marijuana patients? WMRA’s Randi B. Hagi reports. Read More