Thick skin, patience required to build a cannabusiness

Albert Gutierrez, CEO, MedPharm Holdings.-(MEDPHARM HOLDINGS)

With so much to do before legal cannabusiness is up and running in New Jersey, businesspeople like Albert Gutierrez are laying the groundwork now to ease the process between legislation and the first day of sales.“We’re sourcing land and facilities that would work,” he said. “Every state’s different in how they regulate where you can or can’t be, how close you are to a school or even [a] rehab facility. We also look [to build in] places that are safe but more poverty-stricken, because it can help provide jobs to the community.”

Gutierrez runs MedPharm, a Denver-based cannabis distributor that conducts research and wholesale production in Colorado and owns the only grower-processor license in Iowa. MedPharm is one of a number of established industry players looking to enter what would be the biggest East Coast market to date.

Beyond making decisions about location, Gutierrez is accumulating data necessary to navigate the likely application process. He’s also connecting with members of local communities so he can earn their trust if and when his business becomes a part of their community.

“Every major national player that I’ve talked to is interested in New Jersey,” said Michael Bronstein, founder of the American Trade Association of Cannabis and Hemp in Washington, D.C. “The list would be easier to put together of people that are not interested in it.”

Meantime, advocates and activists in New Jersey are still working on developing legislative initiatives.

“We have been going up and down the state educating the public and state officials about what cannabis is or isn’t, why legalization is important — for us it’s a racial justice and social justice issue — and we’ve been explaining how New Jersey can be a leader,” said Dianna Houenou, policy counsel for American Civil Liberties Union of New Jersey and a member of New Jersey United for Marijuana Reform.

“We want to build a legal structure that embodies racial equality and social justice,” she added.

Houenou said NJUMR seeks automatic expungement of prior marijuana-related charges to ensure no one has to jump through hoops for their record to be cleared. The group also urges that tax revenue be reinvested in communities to fund education, drug treatment and prevention programs and job training. And it seeks to ensure that application and licensing fees aren’t overpriced and qualifications aren’t overly restrictive.

NJUMR also aims to ensure that the only prior convictions held against people seeking entrance into the legal cannabis community are ones related to the ability to operate a business, such as fraud or embezzlement.

“If one of the goals is to undercut the underground market, you’re not doing yourself any favors by boxing out people with prior convictions,” Houenou said. “They have experience, they have the connections, they have the clients. If you want the clients to come into the regulated market, you have to give people the opportunity to own, operate and work in these businesses.”

Ensuring racial and social equity to New Jersey’s marijuana legalization is just one piece of many that will add up to a final bill.

“Whatever gets passed will be shot through with other issues,” New Jersey Cannabis Industry Association President Hugh O’Beirne said. “What are the base regulatory components [or] the types of licenses, number of licenses, establishment of the regulatory authority, restrictions on purchasing or advertising? [Will there be] caps on the number of storefronts? Are there going to be social consumption licenses? The ‘how’ of legalization is as important as the ‘whether.’”

Advocates like Houenou and O’Beirne feel confident the legislators are listening. Houenou finds confidence in Gov. Phil Murphy’s support of marijuana legalization.

“Gov. Murphy campaigned on this issue; now our job is making sure that the bill that winds up on his desk is the right bill,” said Houenou. “We’re continuing to work with the senators to figure out how this bill needs to be structured. There’s a lot of issues that need to be set in this one piece of legislation. Luckily we have a lot of legislators who understand the social justice motives behind this and who are willing to say that legalization shouldn’t happen without racial and social justice or without addressing the harms that have been inflicted within our communities as a result of the war of marijuana.”

According to Kris Krane, founder of multistate cannabis consultant-investor-retailer 4front Ventures, it takes about two years from legalization to businesses opening. A regulatory agency has to be created, applications from hopeful business owners have to be fielded and those businesses then need to be built.

In starting a cannabusiness after legalization in other states, Gutierrez said he’s experienced pushback such as from fire departments that didn’t want to approve his build-outs despite him having followed an already approved plan, and from local power companies that did not want to approve his request for more amps of power in a facility that needed it for production.

He added: “I tell people that want to get involved in the industry, if you don’t have thick skin, and it’s within you to push yourself even when it seems like [your business] won’t happen, this isn’t the industry for you.

“There’s so many things you have to go through to even just sell one thing. If you just understand it’s one problem after another to work through, you’ll be OK. You’re going to fail, and tomorrow is a better day.”

Gabrielle Saulsbery
Albany, N.Y. native Gabrielle Saulsbery is a staff writer for NJBIZ and the newest thing in New Jersey. You can contact her at gsaulsbery@njbiz.com.

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