Who will win the lottery to run Rhode Island's six new medical marijuana dispensaries?

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David Spradin is the CEO of a California-based marijuana company called Perfect Union.

It has 14 marijuana stores between Los Angeles and Sacramento, six stores in New Mexico and has had stores in Oregon and Washington, says Rick McAuliffe, a Rhode Island lobbyist who now also serves as a director for Spradin’s new local affiliate: Perfect Union-RI.

The company and 27 other businesses all filed applications last month for a chance to run one of six new medical marijuana dispensaries planned for Rhode Island. 

While Spradin’s local venture incorporated just in November, the Californian has been around, buying up one marijuana cultivation operation, in Warwick, and purchasing a Providence site for a possible second — indicators of the interest some outside investors have with Rhode Island’s booming, multimillion-dollar marijuana industry.

Spradin’s Western stores sell in both the recreational and medical markets “and he thinks the opportunity in Rhode Island and the Northeast is very good,” says McAuliffe, particularly if Rhode Island joins several Northeast states and legalizes recreational use of the drug.

“He wants to be a presence here,” says McAuliffe. “I think we all see that at some point this will go recreational.”

The new year promises to bring renewed focus on marijuana in Rhode Island. 

The state is moving forward with the first expansion of its medical marijuana dispensaries since the existing three — located in Providence, Warwick and Portsmouth — opened in 2013 and 2014.

Governor Gina Raimondo has proposed awarding the new licenses via a public lottery to eliminate the possibility of political favoritism.

 

The new dispensaries will operate in six geographical zones around the state, an effort to improve access for patients and promote price competition.

The Raimondo administration has proposed choosing the winners of the new dispensary licenses by a lottery — held in public and perhaps even televised — to keep political favoritism and influence out of the process.

In total, the 28 hopeful businesses filed 45 separate applications as several applied for multiple zones to increase their odds of winning a license. (Winners are limited to operating one dispensary.)

Several lobbyists and former lawmakers, outgoing Central Falls Mayor James Diossa, and Providence School Board president Nicholas J. Hemond, a lawyer, are among the listed directors for some of those businesses.

What’s in play is more than just the chance to sell medical marijuana. The winners of the six new licenses, along with the three existing dispensaries, could have first dibs on selling recreational marijuana, too, if lawmakers allow adult use.

Gov. Gina Raimondo has pushed for legalization since 2019. Her latest plan would have the state contracting with retail stores. The state would regulate prices and the potency of marijuana products sold. The state would take 61% of revenue, store operators 29% and hosting communities 10%.

The presumptive new House Speaker, K. Joseph Shekarchi, D-Warwick, says he doesn't have a stance on legalizing marijuana for recreational use and says the question should be debated.

 

Raimondo's budget officials estimate 176,388 consumers in the adult-use market and $209.6 million in annual sales.

Medical marijuana sales have been smashing records every year as of late. And with 2020 — the year the coronavirus kept tens of thousands of people at home  — that trend is expected to continue.

In 10 months, from January through October, Rhode Island saw $65,190,150 in sales at its three dispensaries, reports the Department of Business Regulation. In the fiscal year that ended last June 30, those dispensaries sold $59.7 million worth of marijuana products.

Whether legalization passes this year remains unclear. While Senate President Dominick Ruggerio has dropped his previous objection, the presumptive next House speaker, K. Joseph Shekarchi, D-Warwick, wants the issue debated.

“I don’t have a particular stance either way,” he said last month. “It’s a hard issue. Let it go through the normal legislative process.”

Fifteen states and the District of Columbia have legalized recreational use, including Massachusetts, Vermont, Maine, and New Jersey’s legislature just last month.

The DBR has said it will announce when the lottery will happen after its office reviews the license applications. All eligible candidates for the lottery must meet a host of requirements, including disclosing all investors and ownership interests, and showing they have local community approval to operate a dispensary.

The dispensaries must be incorporated as non-profits, at least on paper, but many marijuana companies contract with management companies that direct revenue streams back to shareholders.

The new dispensaries will be retail stores only, though any license winners who are now marijuana cultivators supplying existing dispensaries would be allowed to merge operations.

So far the DBR has released just the names of those businesses who submitted applications. A DBR spokesman said Monday that the department planned to release more information about each applicant closer to when the lottery happens.

The following is a list of license applicants for each zone.

 Zone 1: Burrillville, Cumberland, Glocester, North Smithfield, Smithfield and Woonsocket.

Livity Compassion CenterMedici Compassionate Care CenterNew Leaf Compassion CenterPinnacle Compassion Center and RMI Compassion Center.

Zone 2: Central Falls, Johnston, Lincoln, North Providence and Providence.

Ascend Rhode Island Compassion Center, Faded MindsLucy Rozen Compassion CenterNew Leaf Compassion CenterPerfect Union-RIPinnacle Compassion Center, Rhode Island Care ConceptsRhode Island Compassion CenterSanctuary Medicinals, Solar Therapeutics Rhode Island.

Ascend, which is affiliated with a Massachusetts-based company, lists with the secretary of state's office former state representative Robert Flaherty among its directors, along with his law partner Kathleen M. Hagerty. Flaherty is also listed as a director for Atlas Enterprises. 

Jeff Taylor, a lobbying partner of McAuliffe’s, is also listed in corporations papers as a director of Perfect Union-RI. Frank McMahon, president of the lobbying firm Advocacy Solutions, is listed among the directors of Sanctuary Medicinals.

Zone 3: Coventry, Foster, Scituate, West Greenwich and West Warwick.

Green Wave CCRhode Island Compassion Center.

Zone 4: Cranston, East Greenwich, North Kingstown and Warwick.

Cann Cure CompassionCoastal Farms Wellness CenterCompassion Center of New EnglandCo-op City IEnlite RI, Mammoth Health and WellnessNew Leaf Compassion Center,Perfect Union-RI, Rhode Island Care ConceptsRhode Island Compassion Center, Solar Therapeutics Rhode Island, The Winding Rhode Compassion Center.

Mammoth Health and Wellness now operates a Rhode Island business that extracts cannabis oils for marijuana products.

Former state representative J. Russell Jackson, is listed as the incorporating lawyer for Coastal Farms Wellness Center.

Zone 5: Charlestown, Exeter, Hopkinton, Narragansett, Richmond, South Kingstown and Westerly.

Coastal Compassion Center, Compassion Center by Bonsai, Green Wave CCMammoth Heath and WellnessN&N Associates (doing business as South County Compassion Center), Plant Based Compassionate Care, Rhode Island Care ConceptsRhode Island Compassion CenterSolar Therapeutics Rhode IslandThe Winding Rhode Compassion Center.

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

Atlas EnterprisesLivity Compassion Center, Mother Earth WellnessNew Leaf Compassion Center, Rhode Island Care ConceptsThe Edward O. Hawkins Center, Inc.

Outgoing Central Falls Mayor Diossa and former state Senator Rhoda Perry are listed among the directors for the Hawkins Center.

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