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Medical marijuana claims place at business table

The canopy of a marijuana crop is seen at Alternative Solutions, a medical marijuana producer in Washington, D.C.
The canopy of a marijuana crop is seen at Alternative Solutions, a medical marijuana producer in Washington, D.C. (BRENDAN SMIALOWSKI / AFP/Getty Images)

In a tower high above the Inner Harbor, the Center Club serves as a private dining bastion for the region's business elite, a place for members and guests to broker deals and make connections.

Among those claiming places at the club's tables last week were members of Maryland's budding medical marijuana industry, which is emerging as a corporate player after years of state rule-making, despite still-mixed acceptance from the federal government and others.

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"We're in changed times," Daraius Irani, an economist at Towson University's Regional Economic Studies Institute, told a room of roughly two dozen people who had gathered for a discussion about the industry.

Since Maryland's General Assembly passed the first law legalizing medical marijuana use in 2013, the state has moved slowly to admit the industry to the state, but some movement is expected later this year.

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The Maryland Medical Cannabis Commission, which is overseeing the process, is slated to meet Tuesday for the first time since last year to get an update on the progress.

Gov. Larry Hogan also recently named a new executive director to lead the commission: Patrick Jameson, a former Republican candidate for Anne Arundel County sheriff who has a background as a state trooper, worked in the office of the Maryland attorney general and was director of national homeland security for Oracle Corp.

Jameson, who slipped into the back of the room to listen to the Center Club roundtable, said his goal is to help a fledgling industry.

"I thought, with my background in public safety and business, this would be a tremendous opportunity to help people, facilitate a positive business environment and set up a unique regulatory, compliance and enforcement agency," he said in a statement.

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Anticipation is high for the commission to act.

In November, the commission received more than 1,080 applications for growing, processing and dispensary operations — far more than will be allowed to operate under the current state caps, which permit just 15 growing facilities and 94 dispensaries (two per state Senate district).

At the time, applicants expected to learn if they had been selected to move to a second round of review in December or January. But in December the commission pushed the schedule back to this summer, citing the need for more time to glean through the many applications.

The summer timeline is still on track, said Irani of the Regional Economic Studies Institute, which the commission hired to work with third-party experts to score the applications, which frequently run 100 to 200 pages long.

Jameson said the commission expects to name first-phase applicants in the late summer or early fall.

At that point, another round of intensive vetting will begin, as those selected have a year to firm up other aspects of the business, such as financing and zoning. The program is expected to begin serving customers and patients by mid-2017, Jameson said.

"It's taken longer than anybody expected, but you always understand it might take longer," said Rory D. Murray, CEO of Maryland operations for Aqus LLC, which has applied to grow, produce and dispense medical marijuana. "There's so much at stake."

Estimates of the economic impact of legalized marijuana in the United States vary, but as more states embrace some degree of legalization or decriminalization of cannabis, most measures expect it runs into the billions of dollars.

In Maryland, medical cannabis could generate $20 million to $70 million in annual economic activity, and support between 300 and 1,000 jobs, said Irani, who described the estimates as rough, "back-of-the-envelope" calculations.

If successful in its application, Aqus expects to hire about 80 people for a growing facility in Garrett County, the majority of them veterans, Murray said.

"From a business perspective, I think everyone's recognizing it's a great opportunity," he said.

GreenLabs Inc., which also applied to grow and dispense marijuana, expects its cultivation facility, planned for Baltimore City, to create about 100 jobs, said attorney Jon Cardin, a former state delegate who is representing the business.

Chesapeake Health Sciences expects to employ between 25 and 50 people if it wins the licenses it has sought to open growing, processing and dispensary facilities in Baltimore County and elsewhere, said CEO Greg Rochlin, who spoke at Wednesday's session.

The firm has hired Nevins PR, which is led by David Nevins — also president of the Center Club — to help their cause. Rochlin and others in the industry said work still needs to be done before the industry is widely accepted.

Wednesday's event — part of the club's monthly "mix it up" series — was "to continue to inform the public and our constituents of what we're doing and why, and to bring the industry more and more into the light, because it should be in the light," Rochlin said.

As aspiring suppliers wait to learn their fates, many are jockeying for position through discussions like the one at the Center Club, Cardin said. That's spurred fears about favoritism, he added.

"It's very, very competitive," he said. "This should be a completely disinterested group of people making decisions."

Irani, who had his remarks reviewed by the state, said he felt "a little uncomfortable" about speaking at a session with an applicant. But he said that did not make him worried about bias because his organization is primarily managing the process, sending anonymous applications to third-party experts who do the rankings. (The commissioners make the decisions.)

Linda Harder, a senior account executive at Nevins who moderated the discussion, said the Center Club saw the forum as a chance to learn about a timely business and medical issue from different perspective.

"David does this all the time," she said. "He's just trying to bring people together. He knows a zillion people, and it makes sense to reach out to people that he knows."

Since the use and sale of marijuana remain an offense under federal law, the business still faces challenges.

The federal position makes it difficult for medical cannabis businesses to access lending from traditional banks, while major medical systems also have taken a cautious approach.

Doctors in Maryland also have been hesitant to register with the commission, which is required before they can recommend cannabis for patients. So far, about 140 health care providers have signed up, Jameson said.

The state amended its laws this year to allow a much wider range of practitioners — including podiatrists, dentists and nurses — to discuss cannabis with patients and certify that they qualify to receive the drug.

Del. Dan K. Morhaim, a doctor who worked on the state legalization effort for years, said he expects more physicians to recognize the possible uses of cannabis to treat pain, epilepsy and other ailments as the industry gets going.

"It's hard to come around when nothing's happening," Morhaim said. "In the end … I think patients are going to demand it and doctors are going to have to embrace it."

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