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September 3, 2017 Newswires

Meet the companies launching Maryland’s cannabis industry

Baltimore Sun (MD)

Sept. 03--After years of delays, lawsuits and other controversy, 14 firms in Maryland are now growing or poised to grow legal medical marijuana, firing up the supply chain for a market that's expected to reach a quarter billion dollars annually.

The entrepreneurs who were awarded the lucrative licenses to produce the plant have largely stayed out of the limelight as they built multimillion-dollar facilities, fended off legal challenges and raced to get growing before lawmakers could authorize more licenses.

A Baltimore Sun review of state records shows that Maryland's first legal marijuana cultivators come from a range of backgrounds, drawing on experience in pharmaceuticals, restaurants, nurseries, medicine, real estate, law enforcement and liquor distribution.

Some of the new businesses are run by prominent Maryland businessmen with deep political ties, donors who have contributed heavily to candidates on one or both sides of the aisle. Others operate marijuana companies in other states, and have brought their expertise here. Several are owned by families; one is led by physicians.

"One of the underlying principles of ecology is you need diversity to survive, and you want that in a business ecosystem too," said Francis J. Priznar, a senior vice president with Arcview Group, a network of cannabis investors. "Some will do better than others, and hopefully lessons learned will spread through the industry."

Michael Dresser

Gov. Larry Hogan on Thursday ordered a study of whether minorities face a disadvantage when seeking to participate in the state's nascent medical marijuana industry.

Such a study is considered a prerequisite for giving preference to African-Americans and other minorities when awarding licenses to...

Gov. Larry Hogan on Thursday ordered a study of whether minorities face a disadvantage when seeking to participate in the state's nascent medical marijuana industry.

Such a study is considered a prerequisite for giving preference to African-Americans and other minorities when awarding licenses to...

(Michael Dresser)

Maryland's Medical Cannabis Commission relied on the Regional Economic Studies Institute of Towson University to rank the applications. The institute used a double-blind process to rate applicants on a range of criteria, including horticulture experience, security plans and quality of their proposals. The institute produced a list ranking all of the applicants, and the commission picked 15 out of the top 25.

The professional diversity reflected among the winners was not deliberate. The panel did try to boost geographic diversity, by awarding licenses to two firms that did not initially rank among the top 15, but were located among what members considered underserved areas of the state. That move drew lawsuits from the firms that were squeezed out of licenses; they are still pending.

In at least one way, critics say, Maryland's first license holders are not diverse enough: In a state where nearly a third of the population is African-American, none of the firms is led by a black owner. The Legislative Black Caucus has vowed to make sure the state issues licenses to minority-owned businesses.

Features written into the regulations for growing marijuana in Maryland made the application process unusually competitive, even for an industry analysts say delivers profit margins of 25 percent. While growing, possessing, buying or selling the drug remains against federal law -- meaning investment in the industry entails a level of uncertainty -- the rules proved attractive to firms willing to take the risk: Patients don't have to live here to buy from here, and the drug may be used to treat an extensive array of conditions, including chronic pain. It's not just physicians, either, who can suggest marijuana. Midwives, podiatrists, registered nurses and dentists can, too.

Compared to other Eastern states, Maryland required a low financial hurdle: successful candidates were required to pay application fees of $6,000, rather than hundreds of thousands of dollars. And unlike some Western states, it allowed businesses to raise money from outside the state.

More than 140 groups applied for licenses.

"There was broad opportunity to try to get involved in the industry," said John Kagia, an executive vice president at marijuana research firm New Frontier Data. "There are a lot of smart, savvy people who are realizing that cannabis represents a great economic opportunity and are willing to leave behind industries in which they've been successful."

The marijuana commission "wants high-grade pharmaceutical products," said Patrick Jameson, its executive director. "Innovation can come from anywhere. This is a real opportunity for medical innovation in Maryland."

General Assembly leaders have promised to expand the number of licenses as soon as January to make sure there is more racial diversity among medical marijuana growers.

In the meantime, here are the principal actors behind each of the 14 companies.

Taking a tour of ForwardGro, one of the 15 pre-approved medical marijuana growers in the state. (Kim Hairston / Baltimore Sun)

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ForwardGro

Led by Gary Mangum, ForwardGro became Maryland's first marijuana cultivator in May. Mangum made a fortune growing ornamental flowers; he is CEO of Bell Nursery, a supplier to Home Depot garden centers. Mangum is a well-known Republican donor and friend of Gov. Larry Hogan, who appointed him to the executive board of the Maryland Stadium Authority. ForwardGro's state-of-the art greenhouse in Lothian is expected to have marijuana ready during the fall, producing the first crop in the state. Mangum's team includes his former business partner at Bell, Mike McCarthy; former Anne Arundel County sheriff George Johnson, a onetime Democratic candidate for county executive; cannabis patient advocate Gail Rand; and anesthesiologist Debra Kimless. The executives of ForwardGro have given more than $195,000 in political donations in recent years, with Mangum personally giving three-fourths of that sum since 2007.

Holistic Industries

Holistic's CEO Josh Genderson is the fourth generation of his family to own and operate the expansive liquor store Schneider's of Capitol Hill in Washington. He opened his first marijuana business in the district, and his new Prince George's County marijuana venture brings on board several well-connected Maryland residents, among them former Prince George's County Police Det. Vince Canales, president of the state's Fraternal Order of Police; Nelson Sabatini, who was state health secretary under two governors and now chairs the panel that sets rates at Maryland hospitals; Richard Polansky, son-in-law of top-paid Annapolis lobbyist Gerard "Gerry" Evans, who helped advocate for the company in the legislature; Henry P. Miller, a distant cousin of Senate President Thomas V. Mike Miller; and Richard Cohen, a major developer who founded the Willco real estate company. Both Senate President Miller and Mel Franklin, then chairman of the Prince George's County Council, wrote letters to state regulators praising Cohen and recommending Holistic's application be approved. As a company, Holistic donated more to Maryland lawmakers than any other new marijuana growing firm, handing out $43,500 in 2016 to 11 public officials, including $5,000 each to Miller and House Speaker Michael E. Busch, both Democrats, and $6,000 to Hogan, a Republican. In addition to contributions made by the company, its executives and the firms they own have donated more than $103,500 to Maryland politicians in recent years. Holistic was one of the two lower-ranked firms that the commission boosted into the top 15 in order to achieve geographic diversity among winners. The firm has been cleared to start growing marijuana in a custom-designed warehouse in Capitol Heights.

Curio Wellness

Healthcare entrepreneur and Democratic donor Michael Bronfein leads the Curio group, which raised $30 million and built a futuristic warehouse in a Lutherville-Timonium office park. One of Curio's major investors is Bronfein's fellow Baltimore County businessman David D. Smith, executive chairman of the television station empire Sinclair Broadcast Group. While Bronfein has been engaged in liberal politics nationally for decades, Smith is a well-known conservative. Curio, and its plan to develop and license a branded line of specialty "wellness" cannabis products, was the idea of Bronfein's daughter, Wendy Bronfein, a former New York marketing executive. Other Bronfein family members also work at Curio, as does Douglas DeLeaver, a former MTA official and retired police officer whose daughter is Hogan's press secretary and whose son-in-law is a Hogan Cabinet secretary. DeLeaver used to work with Jameson, the cannabis commission's executive director, when they were both state troopers. Executives with the firm have made $116,000 in political donations in Maryland, about half of it from Bronfein. Bronfein, who launched several health care service businesses and sits on the board at Johns Hopkins' Bloomberg School of Public Health, is a friend of former President Bill Clinton and an informal adviser and fundraiser for national Democratic candidates, and was campaign finance chair for 2002 Democratic Maryland gubernatorial nominee Kathleen Kennedy Townsend. Among the Wikileaks release last summer of hacked emails from the Democratic National Committee were Bronfein's notes of advice to Hillary Clinton's campaign manager John Podesta. Bronfein is also part of the team behind the Baltimore's Horseshoe Casino.

Doctors Orders

Glenn Weinberg, former principal at the Cordish Cos. development empire, is the CEO of Doctors Orders. The company is one of two that failed to meet an August deadline to become operational but secured an extension from regulators. Restaurateur Jeff Black of Black Restaurant Group had signed on as the company's COO, but state officials say he has now backed out. Del. Dan Morhaim, an emergency room physician and leading advocate for legalizing marijuana, agreed to run a Baltimore County dispensary for the firm but backed out amid an ethics investigation. Weinberg had overseen shopping center development for Cordish, but retired from the firm about the same time the company launched plans to build the Maryland Live! casino in Hanover. His children are involved in the marijuana business, as is venture capitalist Herbert P. Wilkins Jr. of Syncom, son of the late Herb Wilkins Sr., an early investor in BET and Radio One. Doctors Orders is building a growing facility in Dorchester County.

Freestate Wellness Cary Millstein, president of this Howard County growing operation, spent 30 years in the construction business and owns a business that exports pecans to Asia. His co-owner is neuroscientist Rachel Fischell, granddaughter to prolific inventor Robert Fischell, the namesake of University of Maryland's Fischell Department of Bioengineering and the holder of more than 200 patents. Two other Fischell family members are involved in the business, which Millstein says will work closely with Johns Hopkins researchers to evaluate how marijuana use reduces opioid overdoses. Also involved is Darren Granger with the Howard County sheriff's office.

Erin Cox

Despite missing a key state deadline earlier this month, three more medical marijuana growers won final licenses on Monday to cultivate the drug.

The Maryland Medical Cannabis Commission voted to grant approval for three of the five companies that had missed the deadline to be operational by Aug....

Despite missing a key state deadline earlier this month, three more medical marijuana growers won final licenses on Monday to cultivate the drug.

The Maryland Medical Cannabis Commission voted to grant approval for three of the five companies that had missed the deadline to be operational by Aug....

(Erin Cox)

Green Leaf Medical

Philip Goldberg leads Green Leaf and its Frederick County growing operation. Goldberg, who owns a marketing company in Montgomery County, was president of the Maryland Cannabis Industry Association before the industry existed, and was a frequent voice in Annapolis pushing to get the program off the ground. His brother Kevin Goldberg is the former head of the state's association of trial lawyers and a member of the team. Other members include Martha Bergmark, founder of the legal aid group Voices for Civil Justice; several personal injury lawyers -- James Zois, Laura Zois, Henry Greenberg and Lawrence Greenberg -- Frank Boston, a lawyer and lobbyist for the law enforcement community; and retired Frederick police Lt. Thomas Chase.

HMS Health

The father-son team of Shakil and Haris Siddiqui own the Frederick County marijuana operation the family built on a 150-acre former tree nursery. Shakil Siddiqui founded the engineering and design firm Haris Design and Construction, which helped renovate the D.C Metro system. Several family members are involved in the marijuana growing business, including Islam Siddiqui, a former U.S. Department of Agriculture official in the Clinton administration. Their security director is former Frederick County Sheriff James W. Hagy.

Harvest of Maryland

In a unique deal, Arizona-based CEO Steve White has set up a profit-sharing program with the western Maryland town of Hancock. Harvest built an indoor marijuana growing facility in a publicly owned warehouse left vacant when manufacturing firms moved out. The Washington County town will get a 5 percent share of Harvest's profits, but no say in how the business is run. Harvest also runs medical marijuana businesses in Nevada and Illinois.

Kind Therapeutics, USA

CEO Susan Zimmerman is an Annapolis physician and entrepreneur who runs a pain clinic with husband and business partner Dr. William Tham. Kind Therapeutics plans to grow marijuana in a former furniture warehouse in Hagerstown. The firm failed to meet an Aug. 15 deadline to be operational, but secured an extension from marijuana regulators. The team also includes Richard Howard, a retired Baltimore County Police captain who ran that jurisdiction's Safe Schools Program, which coordinated anti-drug programs.

Maryland Compassionate Care

After winning their license, this Chicago-based firm started doing business as Grassroots of Maryland and renovated a warehouse in the 6,700-person Carroll County town of Taneytown.

The CEO is Steve Weisman, a Chicago-area lawyer and CEO of Windy City Cannabis Club, which operates four dispensaries in Illinois. Grassroots' Co-CEO is Mitchell Kahn, who runs a separate set of three dispensaries in Illinois. Another investor, head cultivator John Fritzel, holds interest in more than 40 marijuana licenses in Colorado, where marijuana is legal for recreational use.

SunMed Growers

Veteran greenhouse operator Jake Van Wingerden is the sole owner and investor of SunMed Growers, which built from scratch a "Dutch-style" marijuana greenhouse on a 67-acre parcel in Cecil County. Van Wingerden is the third generation in his family to run greenhouses; his Tidal Creek growers supplies flowers to several companies in the region, and his company runs greenhouses for Homestead Gardens in Davidsonville. Van Wingerden, who is also president of the Maryland Wholesale Medical Cannabis Trade Association, gave no political contributions until after he applied to launch a marijuana business in late 2015. Since then, he's given $7,050 to state and local candidates.

Erin Cox and Meredith Cohn

A few months after the Inman family traipsed the State House halls to press lawmakers to legalize medical marijuana, doctors wanted to cut open their son's head, again.

Jenny and Alex Inman had helped reshape Maryland's medical marijuana laws as parent-advocates, telling lawmakers the drug held...

A few months after the Inman family traipsed the State House halls to press lawmakers to legalize medical marijuana, doctors wanted to cut open their son's head, again.

Jenny and Alex Inman had helped reshape Maryland's medical marijuana laws as parent-advocates, telling lawmakers the drug held...

(Erin Cox and Meredith Cohn)

Grow West Md

Eight members from three generations of the Valois family of Frederick run this Western Maryland operation. The family says it collectively has more than 40 years' experience in horticulture, including running landscaping companies and designing private gardens. The company hired Colorado-based cannabis expert Leif Olsen of GreenHaus Industries to help launch its Garrett County business. The firm also took on several people involved in Peak Harvest Health, a marijuana firm who did not win a license.

Shore Natural Rx

Shore Natural, run by Erick Bruder and Jacques Remmell of Berlin, is the only grower on Maryland's lower Eastern Shore. Bruder, the president, a former restaurateur who started the Hungry Surfer stand in Ocean City, runs the general contracting business Stag Contracting. Remmell is a former executive with Eastern Shore Gas Company who studied agriculture in college. The team also includes retired Baltimore County police officer Brian Cromer, who started his career in the Secret Service. Shore Natural was the other lower-ranked firm that regulators bumped into the winners' pool in order to achieve geographic diversity.

Temescal Wellness

The Maryland branch of Temescal has a warehouse growing operation in Baltimore. Its principals have ties to marijuana companies in New Hampshire, Illinois, Rhode Island, New York and California. President Ted Rebholz worked in information technology before getting involved in a New Hampshire grow operation. Investors include several Baltimore attorneys, including Paul Bekman, Eric Radz and Craig Schulman. Michael Rego, a former narcotics officer in Newport, R.I., is in charge of security.