You may have a passion for the product, but getting the go-ahead to start growing and selling marijuana in Massachusetts can be a long, expensive and difficult path.
Just ask Jeffrey Roos, CEO of Mass-Medi Spa, a potential dispensary in Norwell and Nantucket. Roos and his team have spent three years and about $300,000 in their journey to open. They’re still waiting.
After being rejected in the first round of applications (Roos and his team are suing the state because they say their application was fumbled) Mass Medi-Spa is one of 50 groups applying in the new phase that started June 29. The Massachusetts Department of Public Health, which oversees licensing, didn’t return messages seeking comment for this story.
“It’s been an uphill climb,’’ Roos said. “And it’s been rather arduous but we’re still on track and still very positive. Getting the medicine out there is my number one motivation.’’
Right: medicine. Pursuing a dispensary license isn’t like deciding to open a bar or a restaurant. It’s more like opening a pharmacy.
Under the Implementation of an Act for the Humanitarian Medical Use of Marijuana, weed is treatment.
“This isn’t recreational cannabis,’’ Roos said. “These aren’t pot shops. These are places for patients to go with a legitimate medical need who may not have any other realistic choices for managing their symptoms.’’
Zeta Ceti, CEO of Oakland, California-based Green Rush Consulting, said the hopeful dispensary owner should think first about what kind of work he or she is willing to put in. The marijuana business is booming, but getting past the application process is hard.
“There’s going to be a risk,’’ said Ceti, whose company counsels applicants nationwide. “There’s no guarantees in winning a license.’’
Still, Roos understands there are those out there — like him — who believe in the power of this newly legalized product.
“Follow your passion,’’ he said.
1. First, get your crew together.
Under the law, a dispensary must be a non-profit business. So having someone with a non-profit or business background is key, Roos said.
You’ll also need someone with “industry experience,’’ Ceti said, meaning someone who’s worked in the marijuana cultivation or dispensing business already. Usually, that means finding a person who’s been in California or Colorado for a few years working in the legal weed business.
You’ll also need: a medical professional, an agricultural expert, and a security specialist.
Your team will all have to be squeaky clean when it comes to a criminal and professional background. The state looks at any legal troubles, lawsuits, business issues, bankruptcies and anything else that would make a member of the team an unsuitable candidate.
2. Find a place.
You’ll need to figure out where you want to set up, and make sure your neighbors and city officials are cool with it. Certain locations will require special zoning or permissions.
“Without that location, we have nowhere to start,’’ Ceti said. “Without that location, we can’t develop a security plan, can’t get that community support.’’
Letters of support (or at least non-opposition) are part of the application requirements.
Securing a location can be one of the most expensive parts of applying for a dispensary. Roos said his group has been paying $18,000 per month on their facilities as they work through the application processes.
3. Get your money right
Just putting the application together can drain bank accounts.
The initial application requires $1,500 and the second phase is another $30,000.
After securing the location, the team, the business plan, and the other needed pieces, be prepared to show that the corporation has $500,000 on hand for the first dispensary (plus $400,000 each for the second and third).
This is not something for the casual investor.
“That’s not the kind of risk these people are really ready for,’’ Ceti said.
Any investor contributing more than five percent of the capital must be listed on the application.
Many applicants also pay for a consultant and legal fees to ensure a thorough and complete application.
4. Get some papers.
Legal papers, that is.
The Commonwealth of Massachusetts asks for an initial application of intent from dispensary groups. They must be registered as a corporation, have financial account summaries, a $1,500 check, and a “character and competency form’’ for most everyone involved.
If approved by the state, prepare for more paperwork (due within 45 days): A management and operations profile, more corporation documentation, more background information on the employees and directors, and a $30,000 check.
The state wants to know: How will you store your product? How will you secure it? How will you move it? What type of products will you sell? How will you make sure it’s safe? How will you keep your patients’ information safe?
All those answers need to pass muster before one patient walks in your door. Don’t hold your breath: It took three years for the first dispensary to open this month.
Good luck with your medicine business.
Gallery: State-by-state guide to U.S. marijuana legislation