By John Schroyer and Omar Sacirbey
New Hampshire’s first dispensaries open, Oregon’s new recreational market takes another step forward, and Harborside Health Center’s founder gets some shut-eye after the feds drop a big lawsuit.
Here’s a closer look at several notable developments in the marijuana industry over the past week.
New Hampshire’s New Market
Tiny New Hampshire won’t be boasting it has the nation’s biggest medical marijuana market. But the Granite State’s MMJ business got off to a promising start this week, as the first two dispensaries began accepting patients.
Looking ahead, locals are betting the patient count will surge.
With dispensaries now operating, Martin expects to see a jump in medical marijuana card applications. “A lot of people held off applying because there were no legal means to purchase medical cannabis,” he said. “We’ve definitely seen an uptick in applications.”
At least one dispensary owner agrees.
“You’re going to see another spike over the next three to six months,” predicted Ted Rebholz, CEO of Temescal Wellness, which won two of the four dispensary licenses available in the state.
The odds are decent their predictions will bear some fruit.
The Marijuana Business Factbook 2016 projects New Hampshire will see MMJ sales of $2 million to $5 million in the first full 12 months after dispensaries open.
Rebholz’s first dispensary opened Thursday in Dover, near the coast. More than two dozen patients walked through the doors during the intial three hours, Rebholz said.
Temescal’s second location could open this month in Lebanon, in western New Hampshire.
The Sanctuary Alternative Treatment Center opened April 30 in Plymouth, in the center of the state, and served more than 40 patients on its first day, according to the Manchester Union Leader.
Prime Alternative Treatment Center will open the fourth dispensary in the southern New Hampshire town of Merrimack later this summer.
Until patient numbers grow, Rebholz said he will try to keep costs down by opening his two stores on alternating days so employees can shuttle between the two.
“We can pool our labor by having three days a week for one location and three or four days a week for the other location,” said Rebholz, who has been in the cannabis industry since 2010, including a stint as chief financial officer at California’s pioneering Harborside Health Center.
Have a Cookie
Oregon’s young recreational marijuana industry is starting with baby steps. Last October, medical cannabis dispensaries were allowed to begin selling flower to adult-use customers, but not edibles or extracts or any other marijuana-derived products.
Come June 2, dispensaries will be allowed to sell very limited amounts of edibles, extracts and topicals.
“We’re pretty excited about it,” Justin Croy, owner of the Green Remedy, a Portland dispensary, said. “We’re constantly asked, pretty much all day every day, if we have extracts or when they’re going to be available.”
Dispensaries will only be allowed to sell a single 15 milligram edible, one gram of concentrate, and a 6% THC topical to a customer in a given day – along with a quarter ounce of flower, a limit that’s already in place. While that’s not much, Croy reckons it could be enough to increase his bottom line by 10%-15%.
Matt Walstatter, owner of Portland’s Pure Green dispensary, expects a similar sales increase.
“I’ll take it. Especially for it to happen overnight,” he said. “Anyone who runs a business would be thrilled with that.”
Despite the rec industry’s gradual start, the baby steps are unlikely to last.
A study issued last month predicted the industry could generate nearly $300 million in sales this year.
That projection is much higher than the one in the Marijuana Business Factbook 2016, which estimates that recreational sales will hit up to $220 million in Oregon this year.
DeAngelo Sleeps In
Harborside Health Center founder Steve DeAngelo had been waking up regularly “at the crack of dawn” for nearly four years, unable to sleep in part because of a life-or-death legal battle with the U.S. Department of Justice.
But after the DOJ threw in the towel this week, DeAngelo snoozed until 8:15 a.m. the next morning.
“That’s unheard of,” he said Thursday, clearly relieved to have such a burden off his plate.
The four-year fight with the feds – who threatened to seized Harborside’s assets – generated headlines and stoked fears the federal government would use civil forfeiture laws to shutter dispensaries across the country.
But the DOJ’s decision to abandon the case suggests cannabis businesses complying with state laws will probably be safe from federal prosecution for the foreseeable future.
The ordeal will likely wind up costing Harborside “millions of dollars,” DeAngelo estimated, in attorneys’ fees, lost work hours, court costs, and more. But he reckons it was worth it.
“One of the immediate effects is that we’ll be able to focus more on the things that we’ve always wanted to be able to focus on, rather than having to spend our time fighting for the right to do that,” DeAngelo said.
He added the win also is a boon for Harborside’s financial health.
“One of the issues we’ve had in our conversations with investors is some concern that we’re still locked in this battle with the federal government, and that we seem to be a target for them. And so I think this is going to give a lot of confidence to our current investors and prospective investors,” DeAngelo said.
“There’s more than one investor who’s declined to invest because of what they call the ‘headline risk,'” he added. “But now the headline risk is turning into a headline benefit.”
John Schroyer can be reached at firstname.lastname@example.org
Omar Sacirbey can be reached at email@example.com