Maryland's nascent medical marijuana industry already booming

Dr. Greg Daniel hopes to create a medical marijuana business that would convert an old factory in Easton into a growing and processing facility, and set up a dispensary near the BWI airport.
Dr. Greg Daniel hopes to create a medical marijuana business that would convert an old factory in Easton into a growing and processing facility, and set up a dispensary near the BWI airport. (Erin Cox / Baltimore Sun)

Maryland's nascent medical marijuana industry is already booming.

More than 350 applicants for licenses to grow, process or dispense medical marijuana were filed with the state's Medical Cannabis Commission by Friday evening's deadline as entrepreneurs try to get in at the ground floor of the newest pot market. The applications cover every county in the state.


"It's very busy, and we're very excited," said Dr. Paul Davies, the commission's chairman. "There's an awful lot of excitement buzzing around."

State officials said they had counted only some of the applications received. Already, they have processed nearly three times more applications than there are grower licenses available and at least twice as many dispensary applications than they can award.


The huge demand is typical of a new medical marijuana market, said Troy Dayton, CEO of ArcView, a cannabis industry research firm. Apart from the District of Columbia, Maryland is the first jurisdiction south of the Mason-Dixon line that has a medical marijuana industry, he noted.

Maryland represents the frontier in the legal cannabis industry, which has more than doubled over the past two years to $3.5 billion in 2015, according to ArcView.

"The biggest opportunity in the cannabis industry is the opportunity to be a limited license holder in a state that is likely to expand," Dayton said. "It makes a lot of sense that people would put a lot of time and resources into their applications and really swing for fences."

And because Maryland set up its industry to award licenses on a merit-based system with high fees to apply, Dayton said, it is likely that the businesses that ultimately win licenses will be successful.


"You have people really vested in the success of that effort," he said. "And they have a protected market. They're guaranteed a flow of customers."

Bill Aziskinazi and his wife, Lori, hedged their bets and applied for five dispensary licenses, even though they only planned to operate one. By law, a person cannot hold more than a single license, but the Aziskinazis wanted to be competitive.

"We hope to not just be the traditional dispensary," said Aziskinazi, who filed applications under the limited liability company CannaBus, which would theoretically ferry marijuana to patients in underserved areas, including prisons. His wife applied for stand-alone dispensaries under the company Grateful Meds LLC.

Like other applicants, the couple said they spent hundreds of thousands of dollars just to complete the application.

They interviewed several doctors before picking one to be their medical director. They hired an information technology expert and a security specialist. For the Aziskinazis, the venture is personal. Decades ago, their then-teenage son had a condition that was alleviated by a synthetic form of medical marijuana they could find only in Canada after months of searching.

If they receive a license, they say, they hope their business will save other families from a similar ordeal.

"We wanted to help a lot of people," Aziskinazi said.

Maryland's medical marijuana program has stirred much interest in the industry, said Taylor West, deputy director at the National Cannabis Industry Association.

Not only are there few medical marijuana programs on the East Coast, she said, but Maryland's approach to treating a broad range of conditions and awarding a fair number of licenses makes it an attractive place to invest.

"This is a brand-new market where there really isn't an established set of businesses there," West said. "So getting in at the ground floor, treating patients and building a reputation has a lot of value."

The breadth of Maryland's medical marijuana program attracted Dr. Greg Daniel and his associates to the state. They plan to build what he calls a "seed-to-sale" operation that grows the marijuana, processes it and then sells it at a dispensary.

Daniel said he has talked to officials in Easton about converting an old Black & Decker factory into a growing and processing plant, and he applied to operate a dispensary near Baltimore-Washington International Thurgood Marshall Airport. The total cost to build the operation would be about $10 million.

For more than a decade, Daniel ran a doctor-staffing business before getting into the medical marijuana industry. He said he narrowly missed the cutoff to be awarded one of the few licenses available in New York, where he is based, but sees a bigger potential market in Maryland because of the way the program is set up.

"We could be very successful here," said Daniel. "The number of patients that we would be able to treat would be greater in the Maryland marketplace."

In 2013, Maryland lawmakers approved a medical marijuana program that relied on academic institutions to distribute the drug, whose sale is prohibited under federal law. No university volunteered to participate, so the legislature retooled the program in 2014. The program authorizes physicians in the state to recommend the drug for a specific set of conditions, with 15 growers and as many as 94 dispensaries to supply it.

The Maryland Medical Cannabis Commission spent months crafting regulations on how to implement the law, and even longer developing the complicated application that stretches more than 60 pages. Most of the questions require an essay answer, plus proof that the applicant can pay for the operation.

The commission plans to have an independent third party review and score all of the applications — with names of applicants redacted — to determine which ones make the first cut.

The commission came under fire last year for setting some of the highest fees in the medical marijuana industry, charging $125,000 to growers for a two-year license and $40,000 for a dispensary.

But the cost apparently did not scare off many applicants.

Tony Toskov said he became interested in the business because his wife suffers from migraines and he hopes medical marijuana might alleviate her symptoms.

"I hope everyone's doing it for the right reasons," said Toskov, a restaurateur who owns several Anne Arundel County locales and has applied to operate a dispensary in Baltimore, Washington or Anne Arundel. "It's not a pot store; you're getting into the medical business."

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