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Cannabis growers decry Mattiello-Ruggerio bill as death knell

Politics

PROVIDENCE, R.I. (WPRI) — A House hearing Tuesday about legislative leaders’ medical marijuana bill was dominated by concerned cannabis cultivators who believe they’ll be put out of business if the bill becomes law.

The state-licensed cannabis growers say they’ll have no one to sell their product to if the six additional soon-to-be-licensed medical marijuana dispensaries can all grow their own cannabis.

The bill they oppose is sponsored by House Speaker Nicholas Mattiello and Senate President Dominick Ruggerio, in their respective chambers. It aims to block four of Gov. Gina Raimondo’s proposed regulations for the new dispensaries while also repealing the “legislative veto” they gave themselves over the regulations last year. (That provision prompted Raimondo to sue the General Assembly.)

The cultivators oppose the part of the bill that would block the state’s Department of Business Regulation (DBR) and Department of Health — which regulate the industry — from limiting the amount of cannabis a dispensary can grow.

Raimondo’s administration had proposed barring the dispensaries — known as compassion centers — from growing altogether, which would force them to buy wholesale from the 51 cultivators the state has licensed in recent years.

“We’re going to be out of business,” said Owen Long, who runs a Richmond cultivation business called ODragon. “It’s very frustrating for all of us on the cultivating side to see how we’re going to be able to survive.”

“You’re going to screw everybody behind us, probably out of their life savings,” his business partner Brian Zahm added.

Cassandra Henault, who owns Elle-Cie in Providence, said she’s already looking at opening a business over the border in Massachusetts, fearing her Providence micro-growing facility will have to shut its doors.

“The way that we can survive this is if you guys would allow the DBR’s regulations to go in, and have them prove that they need to grow,” Heneault said.

Raimondo had proposed to do a market study to see what the patient need is in the state before allowing any more growing. The bill expressly prohibits that from happening.

The testimony appeared to move the needle in the committee: Judiciary Chairman Bob Craven said afterwards the bill may need to be “tinkered with,” and said he may make some suggestions to Mattiello after relaying the testimony to him.

“We’re not in the business in the legislature of putting people out of business,” said Craven, D-North Kingstown.

Mattiello — who did not attend the hearing — responded to the cultivators’ concerns on WPRI 12’s Newsmakers last weekend.

“I feel for the cultivators,” Mattiello said. “I always thought there were too many of them.”

The Cranston Democrat said he has “scratched his head” at why cultivators would spend millions of dollars setting up grow operations with only three existing options to sell their product.

Zahm provided one explanation for that — he said some cultivators thought cannabis would soon be legalized, giving them ample market.

“We were led to believe that when this was entered into, that things were going to progress forward the way the rest of the country is progressing,” Zahm said.

On Newsmakers, Mattiello also argued that the six new compassion centers should be able to grow their own product in order to be on equal footing with the three existing dispensaries, which can already grow.

But Domenic Passarella, a cultivator at Rhode Island’s Finest Gardens in Warwick, questioned why there would be more concern for the new compassion centers — which don’t exist yet — compared to existing Rhode Island businesses.

“Why are we creating these six new multimillionaires on the backs of so many people who have invested their life savings, who have created jobs?” Passarella asked. “These are your constituents. Why do they get squashed so six new people can make multi-, multimillions?”

One potential cultivator testified in favor of the bill: Alex Lavin, who has an approved cultivation facility in Warwick that is still awaiting its final license from DBR to start growing. Lavin believes in vertically integrated medical marijuana, which he said would allow for more tightly controlled, “FDA-style” standards.

The other Raimondo administration regulations the bill would block include a proposal to spread the six new compassion centers out by geographic zones, and a plan to allow caregivers to only grow at home for one patient, rather than five.

The Thomas C. Slater Compassion Center in Providence, one of the three existing dispensaries, submitted written testimony in support of the geographic zones.

“We believe the geographic zones provide a sensible approach to ensuring patients throughout the state can access new centers,” the unsigned testimony said.

Many cultivators expressed concern that without the zones the new centers would be clustered in Warwick or Providence.

Lauren Jones, an attorney for the General Assembly, testified that Raimondo’s regulations represented “apparent overreaches” by the DBR, going beyond the state agency’s authority.

He pointed out that lawmakers could replicate the governor’s proposals, if they so choose, by passing a law instead of allowing it to be done by regulation.

No one from the Department of Business Regulation testified before the committee, but DBR Director Liz Tanner sent a five-page letter detailing the administration’s stance.

As expected, Tanner said DBR supports the removal of the legislative veto. But she argued that doing a market assessment before allowing more marijuana growing in the state would prevent diversion to the black market.

State Rep. Joseph Almeida, D-Providence, lamented the fact that no one from DBR was at the hearing to answer the legislators’ questions.

Raimondo has not said whether she would veto the bill as written.

In a statement, Raimondo spokesperson Josh Block said, “Marijuana is a new and growing industry in Rhode Island, and it’s critical that we provide an open, transparent licensing structure.”

“The governor will be keeping a close eye on the General Assembly’s proposal to ensure it does not open the door for insider dealing by limiting the state’s ability to provide a level playing field for all businesses,” Block said.

The “insider” concerns are why Raimondo has said she proposed a lottery system to randomly select applicants for the new compassion centers. The new legislation does not stop her from utilizing a lottery system.

The Senate Judiciary Committee held its own hearing on the bill at the same time as the House Judiciary committee, though many people called to testify on the Senate side were unavailable because they were in the House committee.

The simultaneous timing of the hearings concerned John Marion, executive director of good-government group Common Cause Rhode Island, who tweeted: “I am sitting in the House waiting to testify and was just told my name was called in the Senate. Not a fair process.”

The bill was held for further study on the Senate side, after Senate Judiciary Chairwoman Erin Lynch Prata said she too had heard the concerns of the cultivators.

Watch the 12 on 12 Digital Original “The Business of Cannabis”

Steph Machado (smachado@wpri.com) covers Providence, politics and more for WPRI 12. Follow her on Twitter and on Facebook

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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