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N.H. Medical Pot Dispensary Hits Roadblock

The Keene Sentinel
Published: 5/5/2018 11:42:26 PM
Modified: 5/7/2018 9:59:32 AM

While a bill that has cleared the Legislature would authorize a new medical marijuana dispensary in the region, it likely will be some time before residents can fill their prescriptions locally.

N.H. Senate Bill 388, which calls for increasing the number of medical marijuana dispensaries allowed in the state, passed in the House on a voice vote last week after receiving approval in the Senate in March.

The bill would authorize two additional dispensaries, including one in Cheshire or Sullivan counties. Gov. Chris Sununu’s spokesman Ben Vihstadt said last week that the governor plans to sign SB 388 into law.

For residents of the Monadnock Region, the closest dispensaries are in Merrimack, which is almost 50 miles from Keene, and Lebanon, which is nearly 70 miles away.

Temescal Wellness is already the approved provider for the region, but a local dispensary is unlikely to open any time soon, company founder and CEO Ted Rebholz said in an interview.

According to Rebholz, who said he would like to open a dispensary in or near Keene, the state’s medical marijuana law requires that dispensaries operate as nonprofit entities, limiting their ability to obtain financing and remain viable.

“Most businesses don’t have that restriction and can finance their business through debt and equity,” Rebholz said. “As a nonprofit, I can only get debt. And if I only get debt, interest rates are incredibly high.”

Debt financing involves borrowing a fixed sum from a lender, which is later paid back with interest.

Equity financing involves selling a percentage of a business to an investor in exchange for early capital, eliminating the need to make payments and freeing up cash for reinvestment.

New Hampshire’s medical marijuana law, which took effect in 2013, legalized the use of cannabis for a limited number of medical conditions and with strict permitting.

It authorized four dispensaries throughout the state, which were opened in Lebanon and Plymouth, both in Grafton County; Dover, in Stafford County; and Merrimack, in Hillsborough County.

The law explicitly defines any licensed treatment center as a “not-for-profit entity” and requires that providers register as charitable trusts with the secretary of state and the attorney general.

The state already authorizes Temescal Wellness, which opened the Lebanon dispensary, to operate these facilities in a broad geographic region that also includes Cheshire and Sullivan counties, as well as Hanover.

That region, where Temescal is the only designated provider, is one of four that the state Department of Health and Human Services delineated within the state.

In addition to a dispensary in Sullivan or Cheshire counties, SB 388 would authorize a new dispensary in Carroll, Coos or Grafton counties. That dispensary would be owned by Sanctuary ATC, which operates the dispensary in Plymouth.

Jason Sidman, CEO of Sanctuary ATC, said he agrees with Rebholz’s assessment that the required nonprofit status is a problem for dispensaries and would like to see the Legislature change this.

“States that were nonprofit are changing to a for-profit model,” Sidman said, citing a new corporate conversion pathway for registered marijuana dispensaries in Massachusetts.

“At the end of the day, a for-profit system will equate to lower pricing for the patients,” he added.

However, Sidman noted that unlike Temescal Wellness, Sanctuary ATC is “self-funded” and would not need to seek out lenders. Sidman said he would not hesitate to open a second location once SB 388 becomes law.

Pending the governor’s signature, Sidman hopes to have a new dispensary up and running by the end of the year.

“We’re going to work very closely with the DHHS, and we’ve already started doing studies for our satellite location,” Sidman said. “We’re looking for a location that would serve the most number of patients, which is exactly what we did in Plymouth.”

According to Michael Holt, therapeutic cannabis program administrator at the state health department, the precise location of a dispensary would ultimately have to be determined by an agreement between the designated provider and the specific city or town in which they wish to open.

As part of a collaborative effort involving providers, patients and local communities, the Department of Health and Human Services would make recommendations based on a needs assessment before deciding whether to approve the site chosen by the provider.

“There’s no mandate in the law that there has to be another ATC,” Holt added, using the acronym for alternative treatment center, as dispensaries are often called. “It’s up to the operators in those regions whether they’re going to open them.”

As for Keene’s would-be location, Rebholz said it’s unlikely to happen until legislators revise the state’s current medical marijuana law.

“Until the state law gets straightened out, I don’t see us coming anywhere,” Rebholz said. “And when it does, we have several more hurdles.”

State Sen. Jay V. Kahn, D-Keene, introduced the amendment to SB 388 to include a dispensary in Cheshire or Sullivan counties. Kahn said a change to the nonprofit status of registered providers in the state is not something the Legislature is looking into at this time.

“That isn’t anything that was proposed during this session,” he added.

Kahn said he has heard Rebholz’s concerns but was unaware they might constitute a barrier to opening a dispensary near Keene. Kahn said it’s up to Temescal whether the provider chooses to be responsive to the recent bill.

Meanwhile, finding a municipality that is willing to host a dispensary is just one of many other obstacles, according to Rebholz.

Finding a landlord is another, and the stigma associated with marijuana doesn’t help, he added.

Temescal Wellness, which also has medical marijuana dispensaries in Massachusetts and Maryland, received state authorization in early 2015 to open the centers in Dover and Lebanon.

It wasn’t until summer 2016 that these dispensaries opened.

“There are a lot of people with reservations,” Rebholz said. “It’s on us to explain how we’re going to be safe and compliant.”

Rebholz said he can’t estimate when the nearly 400 residents of Cheshire and Sullivan counties who got cannabis last year under the state’s medical marijuana law can expect to see shorter travel times to and from dispensaries.

“Soon is a relative term,” Rebholz said. “If the law changes, then I’d say soon.”

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