State panel considers cannabis business case
ATLANTA -- Georgia is famous for square acres of peaches and blueberries. Now, say some, there’s a case for a crop measured by square feet: medical marijuana.
“There is a good, effective business model for what Georgia allows now,” said state Rep. Allen Peake, R-Macon, just after a Wednesday hearing of the Georgia Commission on Medical Cannabis.
Growing plain old illegal weed is enough of an money-maker that plenty of people in Georgia grow more than they could ever use, and plenty of them get busted.
But what Peake and other committee members want to do is figure out if and how Georgia can germinate an in-state industry that will grow specially bred cannabis and process it into a no-buzz medicine for a limited customer base.
Such liquid already is legal to possess under state law for the nearly 200 Georgians who have a medical marijuana card for any one of eight diagnoses. But growing cannabis, much less making anything out of it, is still illegal under state and federal law. Patients either pick up their medicine in a state like Colorado where it is legal to manufacture, or they rely on an out-of-state company to send it. That kind of interstate transport of a cannabis compound is a legal gray area at best.
But even with a lot of security regulations and a customer population limited by state law, it would be doable in Georgia, according to a few entrepreneurs.
The capital cost to set up a licensed company that could handle the business from seed to sale would depend greatly upon how many diagnoses would be eligible for medical marijuana, said Jake Bergmann, CEO of Surterra Holdings, an Atlanta-based firm.
“If it is just pediatric epilepsy, I believe it’s somewhere between $2 (million) and $3 million dollars. It’s what we consider a low capital expenditure number,” he said.
If more diagnoses are eligible, thereby increasing the number of potential customers, the investment might be more in the range of $20 million, Bergmann said.
What that cash would buy are cannabis-filled greenhouses and labs that look like they’re behind prison walls and storefronts with big glass windows where patients would buy their medicine. Surterra has applied for a license to build such facilities in Florida.
Georgia native Jason Cranford breeds medical cannabis in Colorado. He developed a liquid called Haleigh’s Hope, named for Monroe County 6-year-old Haleigh Cox. The drug helps relieve her severe seizures.
His facilities are far from his Georgia customers, but if it were legal, there are plenty of people who think he would be a good bet.
“I’ve been approached by at least two dozen investors from Georgia. They’re qualified, seasoned investors, multimillionaires,” Cranford told the committee.
But it’s not clear if businesses that deal in medical cannabis, sometimes referred to as “cannabiz,” will take root in Georgia anytime soon.
For one, there is still a national cannabis prohibition, with only the tiniest exceptions for some hemp products. That fact is important to GBI Director Vernon Keenan, who sits on the panel. The Obama administration has decided to close its eyes to state-legal, tightly regulated medical marijuana programs. But a future president might be of a different mind, he said.
“I think this has to be resolved at the federal level,” Keenan said.
The state ought to approach medical cannabis guardedly, he said.
“This is getting outside of the scope of the (Food and Drug Administration) and the medical community,” he said. “To me that is very problematic.”
Gov. Nathan Deal also is unsure about the possibility of putting seeds in the ground. Deal’s executive counsel, Ryan Teague, told the committee that the governor is taking a “cautious approach.”
But if the regulatory questions are not enough of a barrier for would-be cannabis entrepreneurs, there’s the example of Robert Blake, an Oregon dispensary owner.
“A lot of people run into this industry thinking they’re going to make a lot of money,” he told the panel. “I’m not even turning a profit yet, but you can make money at it. But I’m really interested in the patients, and I think that needs to be the focus of what you do.”
The committee is planning three more meetings before writing a recommendation to the state Legislature, which is due at the end of the year.
To contact writer Maggie Lee, e-mail mlee@macon.com.
This story was originally published August 26, 2015 at 6:54 PM with the headline "State panel considers cannabis business case ."