Andrew and Steve DeAngelo, who have made California-based Harborside Health Center one of the most successful medical marijuana operations in the nation, are in the running for a Massachusetts dispensary license.
Andrew DeAngelo (pictured) is listed in a document released by the state featuring the names of 100 applicants who made it to the final round of the dispensary permit process. He is named as head of Green Heart Holistic Health & Pharmaceuticals Inc., which is vying for a license to set up shop in Boston.
Several local entrepreneurs are also involved in Green Heart, and Steve DeAngelo – the executive director of Harborside – is playing an active role too.
Massachusetts officials are currently vetting the applications and will award up to 35 dispensary licenses next year.
The DeAngelo brothers’ interest in the Massachusetts market is notable for several reasons.
For one, it signals that successful dispensary executives are beginning to move beyond their home states and eye new markets.
In the past, expanding to multiple states proved difficult – if not impossible – for dispensary owners due to various restrictions, regulations and laws. Additionally, creating just one successful, stable dispensary has proved challenging in itself.
Now, however, the industry is maturing, and it’s easier for out-of-state entrepreneurs to get involved in some of the newer MMJ markets with different regulatory models.
The move also sheds light on Harborside’s plans for the future, showing it intends to become an even bigger force in the industry.
The dispensary claims it has revenues of more than $20 million and a patient base of over 100,000. Those numbers could grow exponentially. Aside from Massachusetts, Harborside is now exploring opportunities in other states, including Nevada and Washington.
If successful, Harborside could develop a blueprint for how other dispensaries can expand.
“It was always our intention to bring what we have accomplished with Harborside to as many patients as possible both in California and the rest of the nation,” Andrew DeAngelo told Marijuana Business Daily. “We would love to be in all 50 states someday and even across the globe, but we also know there is a long way to go to get to that point.”
Harborside has not been able to expand in California beyond its main location in Oakland and another in San Jose because of the lack of statewide regulations and moves by the feds against the operation, DeAngelo said.
“We have concluded that it is just too risky for us to mobilize the talent, time, and resources to expansion in California without some type of statewide regulatory process in place to protect us from the feds,” he said.
So the DeAngelos have set their sites on Massachusetts, which has a regulatory structure that is conducive to Harborside’s business model.
They could have a significant leg-up in the application process, as the DeAngelos already know what it takes to operate a successful dispensary.
But it’s still an uphill battle, especially in states like Massachusetts where local connections are extremely important.
Several influential, well-connected individuals are vying for licenses, including a former Congressman who is looking to open up to three dispensaries across the state. These applicants could quietly lobby officials to help get their applications approved.
Additionally, the DeAngelos could face unique hurdles because Harborside has been targeted by the feds.
Massachusetts is taking a very conservative approach to the dispensary licensing process, and applicants will get dinged for civil and criminal infractions.
“The state is going to see that, yes, they run a successful dispensary, but they’re also going to take into account the fact that the feds have become involved,” said local attorney Robert Carp, who is also president of the Massachusetts Medical Marijuana Dispensers’ Association. “Massachusetts is shying away from any criminal activity, and they are running this very, very conservatively. Anyone with any kind of tainted background will be scrutinized very carefully, and (the state) will also closely examine the money trail.”
Still, the DeAngelos would bring experience and operational know-how to a new market, which could lift all boats and persuade officials to green-light their application.
“I would prefer locals, but if an outsider is going to get involved, I’d want it to be someone like them because of the size of the operation they run and the knowledge they can bring to the state,” Carp said. “The bottom line is that this is for patients, so it’s in our best interest to bring in people who can provide medical cannabis in a timely, cost efficient and effective basis. If (the DeAngelos) can do that, the state should maybe give greater weight to them than the entrepreneurs hoping to cash in on a quickly growing industry.”
If the DeAngelos are successful in getting an application, they will split time between California and Massachusetts.
“It is our intention to remain primarily California residents, but Steve and I will do everything it takes to make our expansion into MA successful for all stakeholders ,and if that means moving to MA, then that is what we will do,” Andrew DeAngelo said. “I imagine we will get an apartment there so that we can integrate ourselves into the community in which we serve. That is probably our first step, but who knows, we could fall in love with MA and never go back!”
Andrew DeAngelo currently serves as director of operations for Harborside, where he manages the financial, inventory, purchasing, marketing and events departments of the Oakland dispensary. He also heads up business development of Harborside’s San Jose location.