R.I., Mass. pot markets intertwined

WARWICK — If you want a sense of the connections between the Massachusetts and Rhode Island marijuana markets and the growth that entrepreneurs imagine, look no further than Rhode Island’s first approved marijuana cultivator.

Medici Products and Solutions Inc., of Warwick, hopes to have a final license in hand by the end of the year. Its owners, John M. Rogue and Christopher E. Roy, have been selling marijuana to the state’s three medical dispensaries as caregivers in a joint grow for two years. Roy, a retired Woonsocket police officer, has been involved even longer, selling through a separate company, Grow Smart Solutions.

With the state shutting down caregiver sales to dispensaries on Jan. 1 and converting to a licensed commercial-grower system, the pair needed a license to keep doing business. State startup fees for a 10,000-square-foot facility, the smallest category: $25,000.

But that’s a drop in the bucket compared to their plans in Massachusetts.

Rogue and Roy have three medical dispensary and cultivation applications pending in the Bay State under the name Hope Heal Health Inc. They’ve already received provisional approval for a flagship site on West Street in Fall River. The investment they’ll need to make in the building they hope to open next year: $4 million to $7 million, according to Rogue.

Massachusetts documents show the company’s projected revenues for the first year at $5.3 million, with $3.1 million in expenses. They expect to sell 952 pounds of medical marijuana at $350 an ounce.

“I saw this as an opportunity where we could provide to patients the medicine they need,” said Rogue, 65, of Warren. “... My wife passed away from cancer. My partner’s mother passed away from cancer. We’re just trying to give back.”

On Thursday, the pair will be at a North Attleboro selectmen’s meeting, seeking town approval for a second cultivation site. They’re eyeing Berkley for a third site, said Rogue, whose career before marijuana ranged from technology company management to real estate development.

In all matters in Massachusetts, the pair are represented by former Fall River Mayor William Flanagan.

And with Massachusetts voting to legalize marijuana last month, Rogue said the company is interested in moving into the recreational market as well. He acknowledged there are many unknowns, but the ballot question appears to give those who have opened or applied for medical dispensaries preference when recreational sales begin, possibly by 2018.

Massachusetts, which has roughly double Rhode Island’s population of marijuana patients, at 33,000, currently has nine medical dispensaries. Another 67 applications for dispensaries, cultivation and processing sites, including Hope Heal Health in Fall River, have received provisional approval.

In Rhode Island, state regulators took a second look at the company this week after what they’re calling an “odd coincidence” was brought to their attention. Medici shares the same address as J&J Electric, the contracting company owned by the father of Gerald McGraw Jr., the CEO of the Thomas C. Slater Compassion Center. The operations are located in adjacent units of the same building on Minnesota Avenue in Warwick.

Asked if that situation had been vetted before Medici’s application was approved, top marijuana regulator Norman Birenbaum said the state wasn’t aware of it until an inquiry from The Providence Journal. New regulations forbid Rhode Island dispensaries from having any form of financial interest or control in a Rhode Island cultivator, including through mortgages or other loans.

Rhode Island reexamined the case, and Birenbaum said the state is confident that “no one has a controlling interest in this operation that shouldn’t.” He noted that any changes in ownership or control must be registered with the state as they happen, and an applicant risks losing a license if relationships aren’t reported.

The building is owned by the David H. Merriam trust, according to the Warwick assessor’s office database. Both parties lease their space. Regardless, McGraw Jr.’s father has no interest in the Slater center, the state said.

How the two came to be neighbors is something of a mystery.

“You would have to ask Medici how they ended up next door. I can tell you that Gerry and his father had no idea who they were until after they moved and began their marijuana cultivation operations,” said Chris Reilly, a spokesman for the Slater center. “There is no interest or involvement between Gerry, his father, or the Slater Center in Medici Products and Solutions.”

Rogue also said their proximity is accidental.

“Never met him. Don’t know him,” Rogue said.

As for Medici’s future in Rhode Island, Rogue — like so many others — says legalization here is inevitable. If not this year, then the next, was his guess.

At a Publick Occurrences forum co-hosted by The Journal last Monday, 84 percent of the audience members polled said it was just a matter a time before the state legalizes marijuana.

In an interview last month, House Speaker Nicholas Mattiello noted that, given Massachusetts’ legalization, soon Rhode Island will have “a lot of the concerns that marijuana creates” and “none of the revenues to help us address that.”

Asked if Rogue will be up on Smith Hill pushing for movement this year, he said he’ll leave that to the membership.

“It’s going to happen,” he said.

— jbogdan@ providencejournal.com

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