PROVIDENCE, R.I. (WPRI) – Even as an appeal by a prospective dispensary owner drags on, the R.I. Department of Business Regulation has decided to hold a random lottery next Friday to award five out of six new medical marijuana dispensary licenses.
The event will be highly choreographed, with the use of official numbered balls from the R.I. Lottery, a tumbler borrowed from Twin River Casino and a blindfolded former FBI agent spinning the wheel.
The DBR will randomly award the licenses to the qualified applicants in the previously selected geographic Zones 1 to 5, holding off on awarding any licenses in Zone 6 because of the ongoing appeal.
A total of 37 applications from 23 companies will be in play for the five coveted licenses.
The lottery balls have already been inspected and weighed by experts at the University of Rhode Island and sealed in a briefcase sealed with bomb squad tape since April 30, according to the state’s director of cannabis regulation, Matt Santacroce, who showed the briefcase to reporters Friday morning. A second, practice set of balls was used to demonstrate the procedure.
“We’re taking this extremely seriously,” Santacroce said.
Russell Griffiths, an economic and policy analyst at DBR who used to be an FBI agent, will be blindfolded and wear short sleeves as he picks the balls that have been rotated in the tumbler. He will then hand the ball to Santacroce, who will read the number out loud.
The state tried to get an outside vendor to conduct the lottery, but there were no takers.
State officials’ goal is to make lottery unimpeachably fair, as the businesses selected will ultimately be able to open lucrative cannabis dispensaries. Former Gov. Gina Raimondo first proposed the lottery plan in an effort to avoid the appearance of any special deals for well-connected prospective dispensary owners.
The decision to go ahead with a partial lottery comes after repeated delays in executing the plan to license six new medical marijuana dispensaries, approved by the General Assembly in 2019. The process to expand the medical cannabis market has been slow, despite high demand from patients and plenty of supply from licensed cultivators who have been growing the plant in Rhode Island.
Rhode Island has had only three medical marijuana dispensaries — known as compassion centers — since the inception of the program. Roughly 19,000 Rhode Islanders and 18,000 out-of-state patients purchase medicine at the three centers.
Those patients have a “more diverse, competitive and hopefully accessible medical marijuana program once these licenses come online,” Santacroce said.
Applicants for the new licenses have complained about the delay, since they were required to have premises in place by the time they submitted their applications last December. Some are paying thousands in rent while they wait to see if they will be randomly selected to actually open a business.
A total of 28 companies submitted 45 applications in December. Applicants could apply in multiple zones to increase their chances, but will only be allowed to open one location if selected from the lottery twice.
It took until April to review their applications and disqualify those who didn’t meet the requirements. But DBR then said it had to hold off on the lottery because one of the applicants – Atlas Enterprises Inc. – appealed its disqualification.
Atlas is in Zone 6, comprising Barrington, Bristol, East Providence, Jamestown, Little Compton, Middletown, Newport, New Shoreham, Pawtucket, Portsmouth, Tiverton, and Warren. Atlas had applied to open a dispensary in Newport, where such businesses are banned by local ordinance.
There have been numerous status conferences in the Atlas case, but an appeal hearing date has still not been set. Santacroce declined to comment on the ongoing appeal procedure.
The news that a lottery will go forward without Zone 6 is disappointing to Joe Pakuris, owner of Mother Earth Wellness, a proposed dispensary on Esten Avenue in Pawtucket.
Pakuris has qualified for the lottery in Zone 6, but won’t get to be considered for a license at the lottery next week because of Atlas’ appeal.
“We are seriously concerned that we’re not being included in the lottery,” Pakuris said in a phone call Friday. “We’ve done everything by the book … we don’t feel Zones 1-5 should go forward.”
He said he is considering legal action ahead of the lottery.
The plan was always to pull one applicant randomly from each of six geographic zones, in an effort to spread out access to medical cannabis throughout the state.
Since the original qualifications in April, DBR has disqualified one applicant in Zone 2: Faded Minds, a company owned by David Brayton, which had applied to open a dispensary on Union Avenue in Providence.
Days after qualifying for the lottery, Brayton testified in federal court in Boston to paying a bribe to former Fall River Mayor Jasiel Correia in order to secure marijuana approvals from that city. Correia was convicted of extortion and conspiracy in connection with that bribe.
Target 12 first reported on Brayon’s attempt to join Rhode Island’s cannabis industry in May, when he was still deemed qualified for the lottery.
A letter to Faded Minds in July reversing his qualification cited “the applicant’s sworn testimony to the actual arrangement and payment of a bribe to the mayor of Fall River, MA through his associates in return for the issuance of Non-Opposition Letter on or about July 14, 2016.”
Brayton officially agreed to withdraw on Oct. 4 after choosing not to challenge the decision.
The disqualifications, plus the exclusion of Zone 6, leave the state with 37 total applications from 23 companies to select from next week. The five lucky winners of next Friday’s lottery will have nine months to open their compassion centers.
The procedure will involve multiple rounds of drawings, with 17 balls for each round even if there are only a few applicants. The officials will first use the tumbler and balls to allow each applicant to randomly select its assigned number, before running the lottery five times. If an applicant is picked in more than one zone, they will have to select which location they intend to open, and then the lottery will be re-done for the zone they don’t select.
The lottery is being held on Friday, Oct. 29, at 10 a.m. at the Department of Administration building in Providence. The will be open to the public, press and live-streamed on Zoom, though there may be limited seating for the public due to social distancing.
This story will be updated.