Patiently working

The state has begun the process of expanding its medical cannabis program, with significant changes from the last round

Gabrielle Saulsbery//July 22, 2019//

Patiently working

The state has begun the process of expanding its medical cannabis program, with significant changes from the last round

Gabrielle Saulsbery//July 22, 2019//

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Twelve years ago, Bershan Shaw‘s doctors sent her bloodwork to hospitals around the country to double check her prognosis. Sloan Kettering and Mount Sinai agreed: Stage four breast cancer, three months to live.

She needed something to sleep and something to stabilize her appetite while going through treatments, and turning to cannabis, she said, she saved her life. Today, amid a vibrant career in international business consulting and motivational speaking engagements, she’s applying for an alternative treatment center license in Trenton with her outfit Roundtable Wellness.

“This is why I’m so passionate about this—it saved my life,” Shaw said. “I believe in showing people it’s about getting well, not getting high. I’m very passionate about educating the community about the flower rather than thinking about it as drugs.”

Shaw is applying for one of the 15 dispensary endorsements available statewide. Additionally, there are five endorsements for cultivation operations and four endorsements for vertical integrated operations. Endorsements are split up regionally: up to eight in the north, up to eight in central New Jersey, up to seven in the south, and one at-large, to be determined during the application process.

Charles Gormally, director of litigation at Brach Eichler

In the July 2018 ATC license application round, six vertically integrated licenses were available. One hundred six teams submitted 146 applications. Now, with so many more licenses and multiple types of licenses available as created by the Jake Honig Compassionate Use Medical Cannabis Act, that number is expected to be much higher.

“There will be a lot more play in terms of sheer numbers,” said Brach Eichler member Charles Gormally. “You’ve detached the need to go for a vertically integrated business, which is a very difficult business to demonstrate proficiency in, so by [allowing] either grow or retail creates additional opportunities for folks that can’t bite off the additional business stream.”

Good for N.J. entrepreneurs

The creation of different license types lowers the financial barrier of entry into the industry by millions of dollars and lessens the necessary depth on an application team. Rather than needing expertise in every aspect of the cannabis business, applicants can focus on just one aspect of operations – dispensing or cultivation – if they don’t opt for one of the four vertically integrated licenses.

Scott Rudder, president of the New Jersey CannaBusiness Association, sees this round as potentially more New Jersey friendly than last round, in part due to the Legislature’s failure to enact adult-use cannabis legalization this spring.

Scott Rudder, president, New Jersey Cannabusiness Association.

“Last year, New Jersey was on the precipice of expanding the medical program and segueing into the adult use program,” said Rudder. “This year, with all the different stops and starts both in New Jersey and New York, a lot of out-of-state companies are [considering] what kind of investment they want to make.

“Illinois just came online for adult use. Larger multi-state operators which were looking heavily at the New York-New Jersey market last year are thinking ‘should we invest now or invest our resources in Illinois?’ It’s a great oportunity for New Jersey-based entrepreneurs to invest in this state,” he said.

Dispensary endorsements have a higher likelihood of ending up in Jersey-based hands, according to Gormally, because the out-of-state operators that have been in touch with him have shown more interest in either vertical integration or cultivation.

“The out-of-state folks coming in with already scaled-up operations out of state, I don’t think they’ll likely be interested in backtracking their operations just to retail when their real expertise is in manufacturing the product,” Gormally said.

Dealing with ‘the big boys’

Out-of-state interest in larger operations is why Shaw refrained from applying last round.

“The first round in all the states, the big boys get them. Why waste my money?” she said.

Roundtable Wellness CEO Bershan Shaw and Cornita Cole, quality assurance and project manager.
Roundtable Wellness CEO Bershan Shaw and Cornita Cole, quality assurance and project manager. – BERSHAN SHAW

Roundtable Wellness is privately funded, and 90 percent of its investments come from black and Latina women. Of the “big boys” she said, though, no one has seen death, and that life experience is a driving factor for her and her team members, many of whom deal with post-traumatic stress disorder, fibromyalgia, and chronic headaches.

“[Multi-state cannabis operators] look at it as ‘let’s get that money.’ But when you see death, you want to fight for what you believe in. When the doctor tells you you have three months to live and that [the cancer] is all over your body, you fight for what you believe in.”

There are differences between last RFA and this one, notably the page limit. The cap of 300 pages last year, with some over 1,000 including attachments, is significantly lower than the new limit of 100 pages. On the evaluation side, each member of the application review panel had to read 40,000 pages over the course of three months.

“It’ll be a benefit to those who are reviewing the applications and the applicants themselves. At the end of the day it’ll become more of a process and less of an application,” Rudder said. “I appreciate the fact that the state is making it a little simpler. Looking at what happened last time, applying the lessons learned for this RFA, I see the effort there.”

It’ll force applicants to write tight, thorough, and consider how they use their space.

“There’s for sure less pages to get an equivalent amount explained. The art of conveying your position and what you’ve accomplished is going to be very important,” said Hugh O’Beirne, president of the New Jersey Cannabis Industry Association.

Forecasting the applicant pool, Rudder, O’Beirne, and Gormally all expect the majority to seek dispensary endorsements.

Cultivation is a highly specialized skill, and vertically integrated operations require deeper pockets.

“People want to be a part of [dispensing] because at that point you’re really on the patient side, you’re having an impact, and that’s the motivation,” Rudder said. “That’s why a lot of people love this space.”

Dispensary applications are due on Aug. 21, and cultivation and vertical integration applications are due the following day.