The business of dispensing marijuana

By Engelbertus Wendratama

One person who is eagerly anticipating the medical marijuana business in Boston is Jon Napoli. As the owner of Boston Gardener, a store supplying urban gardening needs, Napoli has been teaching classes on how to grow marijuana since January. He hopes when the medical marijuana law is implemented in May, marijuana patients would consider his place as a reliable source to obtain their medicine.

“The law allows some patients and caregivers to grow marijuana by themselves. The class is also for those who want to open marijuana dispensaries,” Napoli said.

As a businessman who plans to apply for a marijuana dispensary license, he said he didn’t know exactly the potential market in Boston, but he’s optimistic about it, given the number of people supporting the marijuana referendum last year.

Napoli is a member of the Coalition for Responsible Patient Care, an advocacy group for medical marijuana industry professionals. “CRPC is helping the DPH formulate the regulations, in such a way that is beneficial for business like mine, for patients, and for the state. They have submitted recommendations to the DPH, based on other states’ experience,” Napoli said.

Napoli said he believes the CRPC would help create better condition for the marijuana business. The state has adopted a non-profit model for marijuana dispensation, which means any profit made must go back to the dispensary, not for the financial benefit of its owners or shareholders as in a for-profit model.

However, it’s still not clear what kind of non-profits the Massachusetts dispensaries would be. IRS classifies non-profits into 15 categories, and each has its own characteristics in terms of its operation and tax system. Leah Harris, membership coordinator at Marijuana Policy Project in Washington, D.C., said other states don’t relate their dispensaries with the IRS classifications.  “The states laws that require dispensaries to be non-profit don’t require them to have an IRS designation as a non-profit, because the feds are not expected to grant non-profit status,” Harris said.

The DPH is still working on the regulations, and they will hold a public hearing to receive further comment on the proposed regulations April 19.

Regardless the non-profit regulations adopted by the state, Jon Napoli said he believes the best model for dispensary is a for-profit. “I think eventually we will go that way (for-profit). By this, the dispensary will be better regulated and could generate more revenue to the state. But for now, the non-profit is good,” he said. “I think in 2016 we will have a referendum to have for-profit model, like in Colorado, where marijuana is considered in the same class as tobacco and alcohol,” he said.

The same aspiration was voiced by Addison DeMoura, vice president of Steep Hill, a cannabis analysis laboratory whose clients are dispensaries located in California and Colorado. “We can compare the two states’ experiences. Colorado is a better and safer environment for patients, businesses and the public than in California,” DeMoura said. “To the state, it means more revenue too. In this economy, I guess it’s the option people would like to have.”

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