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28 companies vie for six coveted RI marijuana dispensary licenses

Target 12

PROVIDENCE, R.I. (WPRI) — More than two dozen companies have submitted 45 applications to state regulators, hoping to be picked out of a lottery for one of six licenses to open a medical marijuana dispensary in Rhode Island next year.

The R.I. Department of Business Regulation this week released the names of the 28 entities that submitted applications by the Dec. 15 deadline. Six new dispensaries will be licensed, per a state law that passed in 2019, with one applicant pulled from six geographic zones. The zones were created in an effort to spread out access to medical cannabis throughout the state. (The three existing dispensaries are in Providence, Warwick and Portsmouth.)

Ten of the companies that applied submitted applications for more than one zone — at $10,000 per application — but can only be licensed for one location, even if they are pulled from the lottery twice.

Three of the businesses — New Leaf Compassion Center, Rhode Island Compassion Center and Rhode Island Care Concepts — each applied in four different zones.

Some applicants will have a better chance than others at getting a license. Only two applicants submitted for Zone 3, for example — Green Wave CC and Rhode Island Compassion Center — giving them each a 50-50 shot. (Both companies also submitted applications in other zones.)

The geographic area with the most applicants is Zone 4, with 12 submissions. That zone includes Cranston, East Greenwich, North Kingstown and Warwick. The city of Warwick currently has the most cannabis cultivator businesses, in part due to the vast inventory of warehouses in the industrial areas of the city.

Providence — which already has a compassion center — is part of Zone 2, which also includes Central Falls, Johnston, Lincoln and North Providence. Ten companies submitted applications for Zone 2.

A date for the lottery has not yet been set, but it is expected to be held publicly in early 2021. Gov. Gina Raimondo’s administration decided on a lottery system in order to to dispel any concerns that government officials would hand out special favors in the highly lucrative industry.

The existing three dispensaries took in a combined $68 million during the fiscal year that ended June 30, according to the R.I. Department of Revenue, up $15 million from the prior year.

The DBR has so far only released the business names of the applicants, and not the names of the actual people seeking to open and operate the dispensaries, which are officially called “compassion centers” in Rhode Island.

A spokesperson said the department will make the full applications public prior to the lottery. The applications include the names of all operators, owners and investors, including out-of-state interests, which are common in Rhode Island’s current cannabis industry. State law currently prohibits anyone from having a financial stake in two different Rhode Island cannabis licensees.

At least 11 of the prospective dispensaries are tied to existing marijuana cultivators in Rhode Island, according to a Target 12 review of business filings of both the applicants and the cultivators. Cultivators were allowed to apply for the new dispensary licenses, but must either merge the businesses in order to be licensed or divest the shared interests between the two.

The new compassion centers will be a welcome relief to the state’s 63 licensed cultivators, which are allowed to grow cannabis but currently can only sell it directly to Rhode Island’s three existing dispensaries, which also grow their own product.

“There was a ton of cultivators and only three stores, so upping that from three to nine is definitely going to benefit all the cultivators in Rhode Island,” said Spencer Blier, who applied for two dispensaries licenses in Warwick (Zone 4) and Exeter (Zone 5).

Blier runs a cultivation facility called Mammoth on Chestnut Street in Warwick, and he currently sells wholesale to the existing compassion centers.

New dispensary owners that don’t already have a cultivator license will not be able to grow the plant themselves, which is part of an effort by the state to avoid having more marijuana grown in Rhode Island than the legal market demands. New cultivator applications have not been accepted in the past two years.

While the proposed owners, operators and locations of the prospective dispensaries have not yet been released by state officials, a Target 12 review of the applicants’ business licenses filed with the R.I. Secretary of State’s office show some well-known names getting involved in the burgeoning industry.

Central Falls Mayor James Diossa, who is leaving office due to term limits in a couple weeks, is listed as a director of the proposed Edward O. Hawkins Center, along with former state Sen. Rhoda Perry, who sponsored the original 2005 medical marijuana legislation that is named for Hawkins, her nephew.

Diossa said he was asked to serve on the board of directors for the dispensary, proposed for a site in Pawtucket, in order to help recruit diverse employees and help with the business’ charitable giving. (Rhode Island dispensaries must be structured as state nonprofit corporations, governed by a board of directors.)

Perry said she was pleased to see lawmakers expand the program after she left office. She had fought for medical marijuana legalization following her nephew’s death as a young man, after seeing him suffer with pain from a long illness.

“Marijuana does indeed help people in many different ways, and is sometimes less costly and has less side effects,” Perry said. “He would’ve been happy that we did this.”

Applicant Solar Therapeutics — a Massachusetts company that submitted for three different zones –is being represented by attorney Nick Hemond, the president of the Providence School Board, who is also listed as a director of the company. Hemond said his role on the board of directors will be unpaid, and he has no financial stake in the prospective dispensary. The company has picked out potential locations in Exeter, Cranston and Providence.

Frank McMahon, who runs one of Rhode Island’s top lobbying firms, is listed as a director of Sanctuary Medicinals, which applied for one license in Zone 2. McMahon said he has done some lobbying for the company, but will have no financial interest as a board member. He said if selected from the lottery, the dispensary would be run by Sanctuary Medicinals Inc., a team with experience with medical marijuana in Massachusetts, New Hampshire and Florida.

In an interview about the new dispensaries last year, Raimondo said her administration specifically wanted to avoid any appearance of giving special favors to politically-connected applicants.

“I don’t want any special deals for special people, I don’t want any insider deals, I don’t want any legislative meddling, I don’t want politicians making these decisions, myself included,” Raimondo said in an interview last year for the 12 on 12 Digital Original: The Business of Cannabis. “You see the lobbyists, you see the people here in the building all the time … it’s too tempting.”

“I think the lottery is probably the fairest way to go,” McMahon agreed.

Blier also said he understood the reasons behind the lottery, but said he wished there could have been a merit-based system or preference for Rhode Island-based companies over out-of-state businesses seeking to open up shop here.

“In really trying to make sure there’s no back-door deals going down, they also handicapped local Rhode Island companies,” Blier said.

The addition of six dispensaries to the market drew high interest when it passed the General Assembly last year, as the state had never expanded the number of compassion centers from the original three that were approved in 2009 in an amendment to the Edward O. Hawkins and Thomas C. Slater Act.

Access to the industry is still heavily based on startup capital. In addition to the $10,000-per-application fee required for each submission to the lottery, applicants who actually get picked will have to pay a $500,000 annual licensing fee, a figure that increased 100-fold from 2017 to 2019.

State regulators still need to determine if all the applications are qualified to be dispensaries under the state rules, which means all 45 may not make it into the lottery.

Below are all the dispensary applicants, per the Department of Business Regulation.

Zone 1 (Burrillville, Cumberland, Glocester, North Smithfield, Smithfield, Woonsocket)

Livity Compassion Center

Medici Compassionate Care Center, Inc.

New Leaf Compassion Center Inc. (DBA Fine Fettle Dispensary)

Pinnacle Compassion Center Inc.

RMI Compassion Center Inc.

Zone 2 (Central Falls, Johnston, Lincoln, North Providence, Providence)

Ascend Rhode Island Compassion Center

Faded Minds, Inc.

Lucy Rozen Compassion Center

New Leaf Compassion Center Inc. (DBA Fine Fettle Dispensary)

Perfect Union-RI DBA Perfect Union

Pinnacle Compassion Center Inc.

Rhode Island Care Concepts Inc.

Rhode Island Compassion Center Inc.

Sanctuary Medicinals

Solar Therapeutics Rhode Island, Inc.

Zone 3 (Coventry, Foster, Scituate, West Greenwich, and West Warwick)

Green Wave CC, Inc.

Rhode Island Compassion Center Inc.

Zone 4 (Cranston, East Greenwich, North Kingstown, Warwick)

Cann Cure Compassion, Inc.

Coastal Farms Wellness Center

Compassion Center of New England

Co-Op City I Inc.

Enlite RI, Inc.

Mammoth Health and Wellness

New Leaf Compassion Center Inc. (DBA Fine Fettle Dispensary)

Perfect Union-RI DBA Perfect Union

Rhode Island Care Concepts Inc.

Rhode Island Compassion Center Inc.

Solar Therapeutics Rhode Island, Inc.

The Winding Rhode Compassion Center, Inc.

Zone 5 (Charlestown, Exeter, Hopkinton, Narragansett, Richmond, South Kingstown, Westerly)

Coastal Compassion Center, Inc.

Compassion Center by Bonsai Inc.

Green Wave CC, Inc.

Mammoth Health and Wellness

N&N Associates DBA South County Compassion Center

Plant Based Compassionate Care Inc.

Rhode Island Care Concepts Inc.

Rhode Island Compassion Center Inc.

Solar Therapeutics Rhode Island, Inc.

The Winding Rhode Compassion Center, Inc.

Zone 6 Barrington, Bristol, East Providence, Jamestown, Little Compton, Middletown, Newport, New Shoreham, Pawtucket, Portsmouth, Tiverton, Warren)

Atlas Enterprises Inc.

Livity Compassion Center

Mother Earth Wellness, Ltd.

New Leaf Compassion Center Inc. (DBA Fine Fettle Dispensary)

Rhode Island Care Concepts Inc.

The Edward O. Hawkins Center, Inc.

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

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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