Q&A With Steve DeAngelo: Massachusetts Medical Marijuana Program in the Spotlight

By Fred Dreier

Steve DeAngelo, owner of Harborside Health Center, is also the financial backer of a Massachusetts medical marijuana dispensary operated by his brother and business partner Andrew DeAngelo.

He’s had an up-close and personal view of the widely criticized application process in that state and has been the target of significant media attention as a result of it.

In spite of the rocky start to the Massachusetts medical marijuana industry – and, indeed, because of it – DeAngelo feels there are several things the cannabis community can learn from the situation. We spoke with him to learn his point of view on the controversy.

Q: What is it about Massachusetts that has made the licensing process so much different than in other states?

A: What we’re seeing is there is a big difference in the launch of legal cannabis distribution in states where the industry came out of grassroots movements like in Colorado and Washington, versus states like Massachusetts or New Jersey where the changes came from legislature without a broad-based patient movement. In Massachusetts, the media and politicians and the community stakeholders are looking at this issue for the first time. They haven’t had 10 or 15 years of patients coming into their offices and presenting different points of view.

Q: The Department of Public Health has drawn lots of fire for its application process. Do you feel this is fairly warranted?

A: I think the heat the DPH has gotten is not justified. Their process was transparent and thorough, so the criticism is unfair and unfounded and is really the result of the unique set of circumstances. You have a rather uninformed and uneducated group of stakeholders and an already super-heated political situation surrounding the regulatory process. You have an embattled agency that is already the target of the media. And finally you have a very competitive application process. It is my belief that a lot of the negativity has been driven by disgruntled unsuccessful applicants.

Q: The Boston Herald has targeted you and your brother in its reporting, specifically saying that your 2001 arrest for distribution should prevent you from owning a dispensary. Other newspapers have gone after other out-of-state owners and consultants. How have you dealt with that scrutiny?

A: The Herald has been opposed to cannabis reform forever and … they are cherry picking assorted facts and presenting a story that is in line with their pre-planned political view. And then you have the Globe, the paper of record, which I think has been honestly trying to report the facts. With the Globe, it’s a situation where the reporters and editors haven’t dealt with cannabis very much. They don’t understand the science or industry. Because the Herald has been running a story every day, there has been pressure on the Globe to cover it more deeply.

Q: Industry consultants have come under fire for a variety of reasons, including the fact that they’ve worked with multiple clients vying for licenses. Do you think the industry needs to change this practice going forward?

A: I don’t buy into that criticism I’ve heard that it is not appropriate for consultants to work with [multiple groups]. I think there are very few people that truly understand the business of legal cannabis, and some of the consultants who have been operating in Massachusetts are of that few. So naturally, they were solicited by many applicants. That is because their services were really needed.

Q: So what can the industry take away from this entire experience?

A: One of the real lessons coming out of this is that the lens through which cannabis is looked at is going to be different in every individual community and state. Most of our industry’s companies grew up in one geographic location because the laws required us to do that, but now we are spreading our wings into out-of-state markets. As an industry, we are going to have to pay a lot more attention to understanding the lay of the land before we go into business there.

24 comments on “Q&A With Steve DeAngelo: Massachusetts Medical Marijuana Program in the Spotlight
  1. mmj on

    Am I misreading his first statement or is Mr. DeAngelo unaware that MA got its mmj through the voter initiative process not the legislative? Also his last point is off target as there were many consultants flying in promising the world to more groups than they could possible deliver to. Lastly, to say there are “very few” people that understand the legal cannabis industry is insulting to the hundreds of legal dispensary/cultivation operators throughout the country. The mmj movement does not revolve around only the DeAngelo brothers and there inner circle.

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  2. Fonzie on

    Well said by Mr. DeAngelo, but the question about his 2001 arrest was not answered. MMJ Biz Daily must do a better job to get these key questions answered when the opportunity is presented if they have a desire to stand out from the other MJ media sources…and Google.

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  3. Jed Power on

    Steve doesn’t answer the question but I’m wondering how someone with a felony conviction can finance and be involved with a dispensary in MA.
    I’m not against it, but I thought the state barred felons from participating.
    I think lots of people with a similar background as Steve’s would like to know a detailed answer to this.
    Thank you.

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  4. [email protected] on

    I agree with some of Steve’s take on the Massachusetts permitting fallout. However, he missed a real opportunity to address the problems with the current permitting industry. It is absolutely an industry, one that is monopolized by out-of-state consulting groups and investors looking to cash in on the growing industry, by franchising their established facilities in other legal states. As a consultant and teacher, I also work with groups in multiple states. I encourage each group to be actively involved in shaping their business and personalizing their production and service models. Every state should be primarily awarding permits to local residents, many of whom actually HAVE been involved in the legalization movement, whether or not that eventually came from a voter referendum. The dominance of a few out-of-state industry players mixed with the in-state, political nepotism, eclipses the bottom up, communities-based local players and their chance to shape their own growing regional industries.

    This incredible plant is not here for profiteering. Yes, there is plenty of money to be made from its cultivation, extraction, product-infusion and sale. But our goal should not be franchising the next Starbucks of cannabis. Coming with expertise from states with established industries, our goal should be to support local players in providing the highest quality and service to their local, patient communities…

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  5. Yeti on

    Once again Marijuana Business Daily takes a big long suck off of DeAngelo’s pipe. I have an idea, let’s get insight from the guy who got kicked out of the process because he’s a felon. Great idea MBD! Just who I want advice from! MBD is so in bed with ArcView, NCIA and the DeAngelo’s it can be seen from outer space. Cool, now these single minded goons own their own news service too. When are you all going to buy WeedMaps/NORML ? Yellow journalism at it’s best.

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  6. [email protected] on

    I read in the magazine from mmj business daily something similar, and I think what he means is that the medical cannabis providers have to be very sensitive and patient to the people who are regulating this and in charge of the local law, as well as addressing the residents in the community’s concerns about this entering there community. Education and kind words of reassurance, and sharing how much it actually helps these patients, is The MOST important thing; education about cannabis and how much it will help the community is something MANY of the people jumping into this strictly for the money are not wont to do. It’s not about professionalism or lack of know how on how to run a business, and I don’t feel its fair to interpret his comments as such, as someone here had the gall to think.

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  7. Steve J on

    Of course he’s saying the process was clean – he benefited from the whole mess! Look, while I respect Steve and his brother for being leaders in the industry, the fact remains that their application should have been rejected outright here in MA. Applicants were told that a certain set of rules had to be followed (including an absolute ban on those with felony convictions of any variety) yet those rules were changed AFTER the applications were submitted (and the non-refundable fees were collected) to accommodate certain groups like his, Delahunt’s, and several others who either cashed in political favors or bribed the local municipalities with promises of kickbacks from the proceeds of the dispensary. To add insult to injury, other groups were outright robbed by the DPH because they didn’t score their applications correctly. At least two groups I know of have a clear cut legal case showing the DPH was either negligent or corrupt during the latter stages of the process and are suing the DPH. At least one other group was not given points for exhibits that were clearly included in their application. That “mistake” by the DPH cost that group their permit (and $30k!) because, if they had been given the points that they actually earned, they would have been in the top ten scores statewide. Instead, they were rejected and the DPH kept their money and gave the permit to a less qualified applicant. It’s disgusting. What started as a clean and transparent process turned into a sewer after the applications were submitted. I don’t understand how the DPH can get away with changing the rules after collecting the money and not be forced to either refund the fees or open up the permits to those groups that were so blatantly cheated.

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  8. Lawrence Goodwin on

    Divided, we are conquered. It pains me to watch the medical cannabis mess unfold in Massachusetts. I hope it gets straightened out fast, considering how lawmakers in New York may soon pass the Compassionate Care Act. They probably look across the border in MA for indications of what could transpire, believing a similar situation in NY would be odious. They would be correct.
    I, for one, am grateful to the DeAngelo brothers for working so tirelessly to bring cannabis back into the light in America. Who really cares about the 2001 felony for distribution? Today, Mr. DeAngelo is legally dispensing medical cannbis to thousands of Californians in one of the most professional dispensaries of all. That means anti-drug agents were wasting time and taxpayer money when they arrested him. It reminds me of the story of Robert Platshorn, who’s apparently the longest serving federal cannabis prisoner (30 years). He’s free in Florida now, helping to organize senior citizens into a new cannabis lobby.
    Please visit: http://thesilvertour.org

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  9. Cassandra Farrington on

    Thanks to everyone for your comments. Marijuana Business Daily’s primary goal is to provide information that helps cannabis business owners and entrepreneurs, be it news updates, trend pieces, an analysis of current developments, guest columns or Q&As with industry leaders who share their experiences and insight.

    We decided to talk with DeAngelo to get his thoughts on why this process in Massachusetts was so controversial and different than what the industry has seen in other markets. In this case, we felt DeAngelo’s views – whether you agree with them or not – are of interest to the cannabis industry at large.

    There have been plenty of critical articles written elsewhere about the DeAngelos and their involvement in MA (which we link prominently to in the piece). That angle has been covered, and we have highlighted it before in our stories on our site. We look to provide valuable, unique business information rather than simply report the same stories that run elsewhere, especially with our main features pieces.

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  10. Lawrence Goodwin on

    Many thanks to YOU, Cassandra Farrington, for so graciously documenting the reemergence of the cannabis industry. I think MMJ Business Daily is a great resource. Good luck next week in Boston! While attending college, I worked for 4 years at the Back Bay Hilton before returning to my home state of New York. It’s a small hotel, but most of the employees there were no less happy to serve. I look forward to the day when similar events are being held in the NY Capital Region. Maybe by this summer!

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  11. Jed Power on

    Just a quick response to Mr. Goodwin’s question–Who really cares about the 2001 felony conviction for distribution?
    The 1000’s of interested MA residents who were told the same circumstances banned them from the process and therefore reluctantly did not get involved. That’s who , Mr. Goodwin.
    Many people are understandably wondering how Steve was able to circumvent this and how he even knew it was possible.

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  12. Steve J on

    Just to clarify, I have nothing but respect for the Brothers DeAngelo. I believe the two of them have been instrumental in bringing the medical marijuana industry forward. However, my admiration and respect notwithstanding, I can’t help but feel their application should have been tossed because that’s what the rules stated – period. I have a serious issue with rules being changed or ignored to accommodate anyone, even my friends. It’s not fair to the other participants or to the process as a whole.

    Just my two cents.

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  13. winston on

    Obviously Massachusetts was convinced of Mr. DeAngelo’s remorse and rehabilitation. In Illinois, one cannot even submit an application if one has been convicted of an excluded offense as defined by the Act. Perhaps this element of compliance was overlooked by the Massachusetts legislature when promulgating the application regulations.

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  14. Avis Bulbulyan on

    The process in MA took a nose dive because losing groups want to get a second shot at a license. This has nothing to do with transparency or compassion. The first suit was filed by a group that scored an 82 out of 163. Of all the groups that lost, this one should be the last one to make any kind of noise. If you read through their application and actually compare it to other applications, the 82 they received is more than justified. Most of the groups that didn’t make it share a common problem with their application, lack of security measures and the proper security measures.

    I think it’s very appropriate to get DeAngelo’s insight. Why wouldn’t you want a Q&A with someone that was at the center of everything and was actually successful in a different state? MA was probably the most competitive state for licensing compared to all the other states.

    Why not look at this from a different angle. It’s no secret that some consultants worked for 6 or 7 different groups. In the end, all 6 or 7 groups lost and they all scored approximately the same amount of points. That right there should be a good indication that they were scored based on the content of the application.

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  15. Steve J on

    @winston – Nothing was overlooked by the legislature. The rules were changed by the DPH after the end of the permit application process. Worse than that, this particular rule (no felonies allowed) was never even changed! The Massachusetts DPH (issuer of permits) simply ignored it altogether.

    @Avis – Yes, there are several groups that had no shot whatsoever and are still screaming foul because they lost. They are clearly wasting everyone’s time. However, that shouldn’t diminish the case of those very few groups that were blatantly cheated by being scored incorrectly. For instance, I know of one group that wasn’t given any points for demonstrating permission to use their target property, yet their application contained an exhibit conforming to the exact rules the DPH had specified on that topic. They also had three other sections where they were scored incorrectly based on the rules. If they had been scored correctly, they would have scored a 158, second only to Delahunt’s score of 160 on all three of his applications. There are only two possible reasons for this type of thing to happen – incompetence or corruption. Either way, that group has a right to be incensed over this and I hope they actually file suit because their case is a clear winner. It’s one thing to be unqualified. It’s another thing entirely to be cheated.

    Lastly, I’m not sure how you can say you have any insight into any group’s security plans being somehow deficient since all security information was redacted in the published applications.

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  16. Kent Walker on

    I know it varies from state to state, but what are the required documents or format to have when applying for a dispensary license? I’m a 90% combat related disabled veteran hoping to open a dispensary in Florida if the Bill passes in November. The Biz Plans out there on the internet are junk! (I’ve bought a few)Can anyone help with what needs to be in the package to get a dispensary license. It’s hard to compete with the well funded groups that just pay the money and get what they want…
    contact me at [email protected]

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  17. Avis Bulbulyan on

    Steve J – I see your point and I agree to a certain degree with what you are saying. My comments are about the groups that have filed suit and don’t have a case. Like you said, they are doing nothing more than wasting everyone’s time. So far, the groups that have filed suit, fall in this category. They’ve raised issues in their complaint that they’re guilty of in their own application. Some of the violations they accuse others of aren’t even violations.

    You brought up an example of a group that you know personally that was not scored properly. You probably have a very valid point and I won’t comment on something or a group I don’t know about. What I will say is that you’re correct in that the group has a right to be incensed over an error like the one you said if it was the way you’ve said it. It’s not fair to play by the rules and get shorted over an error.

    Even though the security information was redacted in the published applications, there is still a lot of security information available. Especially as it relates to anti-diversion. Add the information on the security personnel for the different groups, it’s fair to say that certain groups had more of a focus on security compared to others. Coincidently, the ones that did have more of a focus on security, are the ones that scored higher.

    Also, I’m not aware of any rules being changed. Steve DeAngelo wasn’t on the application, his brother was. So their application receiving approval doesn’t appear to have anything to do with the State deciding to ignore its own rule.

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  18. Frank Robbins on

    Free enterprise in action. Welcome to the Cannabis Industry. This involves big bucks. The rules should be clearly laid out state by state then followed to the letter. MA just so happens to be one who screwed things up. Just as there was and still is a black market rife with internal struggles, the legal MJ industry will have its share of corruption and illegalities. This will be a tooth and nail fight and only the strong will survive. Meanwhile the toking public will be at the mercy of these growers/dispensaries unless they retain the right to grow and keep a substantial amount for personal use.

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  19. Steve J on

    @Avis – As everyone knows, Steve DeAngelo is the owner of Harborside Healthcare in CA. Harborside was the only source of financing over 5% of the total that his group here in MA had. This was strictly prohibited under the rules since Day One of the entire process. Board members, executive management, and anyone financing more than 5% of the funding were supposed to have to undergo a thorough background check, and any felony convictions – regardless of whether it was drug related or not – were supposed to be automatically disqualified and have their entire application thrown out. Also, Steve DeAngelo was on the application up until just a few days before the winners were announced. He somehow mysteriously knew that he had to resign and put his brother in his place. Gee, I wonder how he was able to get that info? It couldn’t be that he had someone inside at the DPH helping him – could it?!? It doesn’t pass the stink test. Once again, I have to say that I feel badly that I am saying all this about a man I respect. He’s a good guy. But rules are rules and ALL should have to play by the same ones.

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  20. Avis Bulbulyan on

    Actually, he was taken off the phase 2 application before it was submitted. The Globe brought it up a week or so after the winners were announced.

    Like I said, I agree with some of the things you’re saying. But I also disagree with some other things.

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  21. Lawrence Goodwin on

    A brief apology to Jed Power far above: Mr. Power, I do regret my ignorant remark about the DeAngelos’ skirting specific application rules, as you point out. That does seem very unfair to others. (My main point–that nobody should be arrested for cannabis ‘dealing’ in the first place–stands.) If you have not already done so, try to contact the DeAngelos through Harborside Health or ArcView and ask them to respond to your concerns. Or maybe you’ll meet them somewhere in MA soon. They seem to be cool dudes! 🙂

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  22. J.J.From Ma. on

    It’s clear from the interview,Steve knows little about Ma.politics and he seems to know little of Ma citizens.
    The selection process in Ma was a joke. Entrepreneurs had no chance of applying with the ridiculous amount of capital needed to get in the game.
    Instead we get stuck with the status quo, with the likes of the DeAngelo’s brothers. An ex congressman who has made millions off his political connections since leaving office gets 3 dispensories. By the way, Mr Delahunt is going to make a cool $250K a year as “CEO” of his “non profit”. The whole process is a joke.
    Quite frankly, by the time the process is repaired and the MOST QUALIFIED APPLICANTS get their due the Legalization Ballot Question due in 2016 will have overwhelming passed and it will be recreational cannabis for all in Ma.

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  23. Frank Robbins on

    I see a lot of dark clouds over this legalization process. I’ts going to be a State regulated industry until big pahrma, tobaccco and the snack foods (edibles) players get involved. The best thing that can happen is that laws end up favoring a libertarian approach as opposed to a strickly gov’t control overly taxed free market system. If prices and regas get to restrictive then this experimet will fail. i see no reason why the average person cannot reserve to right to cultivate a certain amount legally for personal use

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