News Column

Pot Startups Would Need $500,000 Under Proposed Rule

April 4, 2013

Christine McConville, Boston Herald

Medical marijuana dispensary (file photo)
Medical marijuana dispensary (file photo)

Say hello to Big Weed, medical marijuana critics say -- mom-and-pop startups are likely to be shut out in the Bay State, thanks to a proposed state provision that requires prospective pot peddlers to put $500,000 in escrow.

"Those small mom-and-pop shops that wanted to open a clinic for suffering people, they don't stand a chance," said med-ical marijuana critic Heidi Heilman, blasting what she called the big business behind the so-called "compassionate care" effort.

"People need to start thinking about this like Big Tobacco, and realize that there's a very powerful industry here, who are going to do what they need to do to protect those interests," Heilman said.

The state, in its just-released medical marijuana draft rules, says any approved pot sellers will be required to have $500,000 on hand to prove "the entity has sufficient resources to operate." It is unclear when licensees would be able to take that money out of escrow.

Budding pot entrepreneurs say the steep sum -- coupled with a still-undetermined application fee that one expert said could be as high as $50,000 -- has made their green dreams an impossibility.

"It's way too much for me," said Steven Lamothe of Fitchburg, who attended a medical marijuana business seminar at the Sheraton Boston yesterday.

"I'd really like to get into the business, but I can't afford those prices," Lamothe said as he left.

Bay State voters in November agreed to allow state-certified businesses to sell marijuana -- a federally banned substance -- to qualified sick people. That herbal remedy is expected to be for sale at 35 state-approved dispensaries by year's end.

The state proposed rules -- which prohibit convicted drug dealers from owning or working at a state-licensed dispensary -- were released last week.

Final rules should be in effect by May, state spokes-woman Anne Roach said.

Between now and then, the state needs to decide how much to charge people to apply for a dispensary license. It also needs to name its "evaluation and selection" committee, whose members will decide which qualified applicants will receive dispensing licenses.

"They're like Willy Wonka's Golden Tickets," said Arizona-based medical marijuana businessman Bruce Bedrick, adding that each license probably would have a resale value of at least $1 million.



Source: (c)2013 the Boston Herald Distributed by MCT Information Services


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