How To Grow A Marijuana Business When Regulations Are Up In The Air

Feb. 14--Just a half dozen years ago, Patricia Rosi's days were filled with phone hangups and people trying to get away from her at business events.

Today, rather than being a pariah, she's the belle of the ball.

Rosi is CEO of the Wellness Connection of Maine, the state's largest medical marijuana growing and dispensary company. And she has eyes on the bigger, and yet to be regulated, adult-use market.

"Businesspeople used to hang up on me," said Rosi at the company's grow facility in Auburn. "And people at business events would walk away when I tried to talk to them."

But with her company's 10 years of business experience, her phone is ringing off the hook with calls from current and would-be cannabis businesses. The company sells 150 products at dispensaries in Portland, Brewer, Bath and Gardiner.

While she is enjoying the bustle, she has taken a sage outlook on both the medical and adult-use businesses.

"We went full on in 2017," Rosi said of the time just after Maine voters approved adult-use marijuana in November 2016.

Two years ago, the industrial real estate market began tightening until there was only a 3 percent vacancy rate, she said, as would-be cannabis entrepreneurs gobbled up buildings, some of which still aren't in use after two years of paying rent.

"This is uncertainty on steroids," she said.

With the fits and starts on state rules and regulations to govern Maine's cannabis industry, which still are not set, she's adjusted the company's run at the adult-use market.

"We pulled back, decreased capacity and made a course correction," she said. "We're now cautiously optimistic in getting ready for that market."

The state hired and then let go a consultant to craft rules for the legal sale of adult-use marijuana. Bids from aspiring new consultants are due Thursday.

A spokesperson for the Department of Administration and Finances said in January that the agency aims to hire a consultant by March 18.

The Legislature eventually needs to vote on proposed marijuana rules. State officials have declined to speculate on how long the entire process could take.

Rosi thinks it could go into early 2020.

"The adult-use rules are to go to the Legislature in April," she said. "That's an aggressive schedule. But the original medical marijuana rules were put together in five weeks."

Rosi said in other states with regulations in place for medical and adult-use marijuana, the adult-use portion has grown to 80 percent of the business, with no decrease in the medical market. She said that percentage could carry over to her business in Maine after the regulations are settled.

A big plus to settling the adult-use cannabis rules is tourism. Colorado has seen cannabis tourism grow 51 percent since 2014, according to Forbes magazine, and nearby California is popularizing "wine and weed" tours.

Maine will need to get on board before neighboring states join the competition for tourists, Rosi said.

During the wait for rules for adult-use cannabis, Rosi is using the time to improve the company's quality control processes and studying ways to better deliver nutrients to plants.

And she's capitalizing on a new law on medical marijuana, LD 1539, that took effect in December 2018. Experts said that law gives patients broader access to cannabis and makes the drug safer.

The law also opens the market for companies like Wellness Connection to sell products to one another.

That means Wellness Connection can sell products grown in soil and products in different flavors and colors that it can't produce itself. It grows its plants hydroponically in a mix of nutrients and water.

So far, it has signed partnerships with four other cannabis businesses in the state including Best Friend Farms in Mt. Vernon, which provides it with flower medicine. It also has agreements with High Brix Cannabis Maine in Byron, which also provides flower medicine, and East Coast Gold in Bangor, which provides cannabis concentrates.

Rosi said new market segments are a sign that the market is maturing.

And she's now on the receiving end of telephone calls.

"People are returning my calls now," she said, adding that it is hard being in a market that you can't talk about.

"All the hurdles make it exciting," Rosi said. "I could not be in insurance."

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