When Massachusetts voters approved a medical marijuana referendum in 2012, they opened up a new industry for the state. In November, voters will decide if they want to expand that industry, as they weigh in on a referendum that could make marijuana use legal for all adults over 21 years old. Some in the burgeoning medical marijuana industry are considering a future that may see new non-medical customers.
Marc Rosenfeld stepped out of his car and onto a pile of dirt behind an industrial park his father built in the late 1960s. Two excavators and a front end loader were busy digging up rocks on the site and dropping them into a rock crusher.
Rosenfeld and his siblings still run the construction and real estate company his father started. But they’re branching out a little now on this new development – into the marijuana business.
“This is going to be our cultivation facility to support our medical dispensaries,” he said.
There are strict zoning regulations about where medical marijuana growing facilities can be located. And when Rosenfeld first was told the Medway property they owned met the criteria, he gave it some serious thought. Of course there was one issue – they didn’t know the first thing about growing weed.
“Yeah, that is absolutely the one core competency that we were totally lacking in," he said with a laugh. "Not a huge history with the product itself. People were shocked that this was something we were getting into. It’s not part of our daily culture here.”
But they hired experts in growing and processing the plant and an attorney who specializes in marijuana businesses. And they hope to open their growing facility and dispensaries in Millis, Mansfield, and Southborough by next year.
Four years after voters passed a medical marijuana referendum, there are just six dispensaries open. But 192 applications for sites are pending, including Rosenfeld’s. He says his family was partly motivated by personal experience.
“I’ve lost my mother, I’ve lost my brother, both to cancer," he said. "I know this would have been something that would have provided some relief. And I knew that, just like in any industry, whoever goes first has to do it right.”
But doing it right isn’t easy. First of all, financing is a challenge for a business that’s still federally illegal, so Rosenfeld can’t a loan. He and his company have spent millions funding the project themselves. Also, he had to go town by town, trying to convince them to agree to let him set up shop there.
“In the beginning, you would walk into a town to start a conversation and they would try to throw you out of the building. Now everybody will talk to you,” Rosenfeld said.
Growers and distributors like Rosenfeld aren’t the only businesses that spring up in the state following the medical marijuana referendum.
Rosenfeld recently met with Dorian DesLauriers and Christopher Huddalla, the founders of the Milford-based company ProVerde, which tests marijuana. And no, marijuana testing isn’t as much fun as it sounds. Huddalla described to Rosenfeld what their lab could offer his company. “So you have the pesticide and heavy metal testing at the beginning, you have the four tests at the end,” he said, beginning to detail the various services the state requires and ProVerde provides. DesLauriers said the inspiration for this company came at the super market.
“So I came out of Stop & Shop, and signed a petition for medical marijuana, and thought, ‘hmm, this could be interesting.’ And started thinking about it from the medical side,” DesLauriers said.
He wound up teaming up with Hudalla - a PhD in analytical chemistry, who was already working with a technology that could look at the chemical structures of marijuana. Now, that testing is their business.
“It is all about the consumer," DesLauriers said. "So the consumer knows what they’re getting, the potency of it, and they know it’s safe to consume.”
DesLauriers said he hopes the state adopts the same kind of regulations if voters approve the upcoming referendum that would make it legal for anyone over 21 to buy marijuana. That could mean a lot more testing for them to do. But Hudalla said it could go the other way for their business. “Suppose there’s more testing going on," Hudalla said. "And ten more competitive labs come to the state to address that. And my now market share goes down.”
There’s also a question about what impact full adult legalization would have on the state’s medical dispensaries. If anyone can get pot, why would anyone get a prescription and go to a special dispensary?
“It won’t die because the medical program’s not taxed,” Rosenfeld answered.
Rosenfeld points out recreational pot will be a lot pricier since the state’s looking forward to all the money they’re going to get for it. Also, he says companies like his can also specialize in strains of the plant with low THC – so they have the medicinal benefits without getting users as high.
As the ballot question is written, growers and distributors who are already licensed in the state for medical marijuana would have a year’s head start for dispensing, and a two-year head start for growing. But Rosenfeld said in reality, it’s not going to give him much of a competitive advantage.
“I’m going to have to go back and approach towns, and I’m going to have to do all my leg work, you know, or any applicant would have to do all of this all again," Rosenfeld said. "It’s going to be years before your first non-medical dispensary is functional anyway. And by that point in time, there’s not going to be a head start.”
Because his competitors will use that time to do the same thing.
Rosenfeld doesn’t want to say how he will vote in the November referendum, but either way, he says his business will respond to what Massachusetts voters decide.