Jessica DiMatteo, a plant science major at UConn, joined a crowd of students, faculty, staff and outside professionals at the Konover Auditorium on the last Monday morning in February to hear a talk by a renowned Israeli researcher. The junior from Bethany took notes as Hinanit Koltai, an eminent researcher whose nation is well ahead of the U.S. in cannabis science, described how cannabinoid compounds work together. Koltai talked about treating irritable bowel syndrome.
Irritable bowel syndrome? Can it get more mundane than that? From the outside, no it can’t — and that’s the point.
As public hearings heated up in March, lawmakers were still debating how and whether to cons…
If the event on the Storrs campus seemed like a routine academic seminar, call it a success for precisely that reason. In fact, it sprouted from a burgeoning, interlocking ecosystem of cannabis-related research and support activities in Connecticut — the coming of age of an industry that wants to fit in.
Connecticut marijuana sales fall somewhere between $50 million and $60 million a year at nine licensed, highly regulated dispensaries, according to one estimate. And that’s without the General Assembly legalizing adult-use marijuana, which would instantly multiply sales several times and bring in perhaps $100 million annually in badly needed tax revenue for the state.
Even without full legalization, business is expanding fast. The number of certified patients rose by 13,000 in the last two years; the state just licensed another nine dispensaries, crossed over 1,000 physicians who certify patients (don’t say prescribe) and pushed the number of medical conditions treatable by marijuana to 31 for adults, and eight for patients under 18. The industry and the system around it — botanical experiments, classes, production, related professional services, medical research, new products, expanding retail and even corporate takeovers — march ahead as lawmakers debate the undeniable: A marijuana network is here to stay … and grow.
We’re talking about much more than a “seed-to-sale” supply chain. That UConn seminar, for example, was organized by the university’s Plant Science & Landscape Architecture department, and by the Connecticut Cannabis Research and Innovation Center — a new, independent nonprofit that will support cannabis technology. “I really think we can make a difference in this state,” says Eric Zachs, a West Hartford executive in a family-owned telecommunications and investment business who founded the center and is now hiring an executive director. “It’s medical research, and hopefully businesses come out of it.”
DiMatteo, a UConn junior, hopes to join the industry full time. Just a few years ago, when she was at Amity Regional High School in Woodbridge, spending summers at her grandmother’s horse farm nearby, the idea of a cannabis career seemed more remote than self-driving cars. “It never crossed my mind, which goes to show how quickly it’s advancing,” DiMatteo says.
Now she’s well on her way. The day after Koltai’s talk, DiMatteo landed a summer job at one of the four licensed production facilities for marijuana in the state. And the day after that, she reported to her academic-credit job in the lab of UConn professor Gerald Berkowitz, helping conduct experiments on the effects of certain proteins on hemp seed germination. “My whole experience so far has just been a ball of excitement,” DiMatteo says.
Let’s view this ecosystem through the eyes of some insiders in a virtual tour of the state — starting with DeMatteo in Storrs.
Even last year, searching for academic direction, DiMatteo was only vaguely aware of cannabis as the core of a plant science major. She somehow heard about hemp research on campus. “Then the idea just kind of came to me,” she says. “I wanted to end up somewhere where I could be helping people. … I did not want an ordinary type of job, I wanted something exciting.”
She’s majoring in sustainable plant and soil systems, and cannabis holds her attention as a frontier therapy that she can help shape. “You have these people with these conditions and they use one strain of cannabis and it works perfectly for them, and then they use a different strain and it doesn’t work, and we don’t know why. … It’s just very interesting — the plant — and I want to work on producing it,” she says.
She’s finding a lot of support from family and friends, whether or not they use pot.
Zachs, at the nonprofit cannabis research center, and DiMatteo both have little or no interest in the stuff as consumers. That’s another sign of the industry maturing: unlike in the earliest days of legalization in Colorado and other Western states, led by enthusiastic stoners, nowadays a person in the industry is almost as likely to abstain as not.
Sadly for DiMatteo, she had a scheduling conflict and couldn’t take Berkowitz’s class on cannabis cultivation — which made national news in December as the first of its kind at a university.
Berkowitz’s course attracted 400 students, he tells me in late February, “but it’s a pretty rigorous course, so we have about 300 left.”
It’s a safe bet that some of those students are looking to grow the psychoactive weed themselves, at home. Berkowitz had “nothing to say” about that, as he’s focused on advancing academic scholarship on cannabis, not the culture of getting high.
From his lab and classrooms at UConn, the microbiologist who has been chairman of the plant science department is a whirlwind. He’s had more than a dozen undergraduates at a time, plus grad students, involved in hemp-research projects, “which is far more than I should handle.”
Last year he took eight students to Montreal, to a meeting of the American Society of Plant Biology, where they described some of their projects. “The presentations made by the students were the first from any academic institution in the United States about cannabis,” he says. “That’s terrible that there isn’t institutional scholarship going on.”
And he’s sending students to work in the industry in Connecticut.
It’s expanding, but it’s not for everyone. One former student, Taylor Cheek, traveled to Montreal with Berkowitz and found a job at a production facility after she graduated last year — but recently left, on good terms. “It feels good to be part of a movement,” Cheek says, “but I think there are some people that are not taking it seriously and see it as a trendy thing.”
She realized she prefers working with many species of plants, adding that, in a male-dominated field, “I wondered how it would be different if there were more women in the grow.”
That’s all part of the evolution of a highly interconnected business in Connecticut. “The industry is becoming hooked up with us,” Berkowitz says.
In Portland, Rino (pronounced like the Nevada city) Ferrarese heads operations at Connecticut Pharmaceutical Solutions, one of the four licensed production facilities in the state, with 20,000 square feet of indoor growing space. He won’t say how much the grow room at the heart of the operation yields. But its flagship proprietary brand, Lexikan, the most popular seller in the state, he says, accounts for “thousands of pounds a year.”
Connecticut Pharma supports Berkowitz’s lab with funding and material, and Ferrarese is proud that the state’s medical marijuana program uses a pharmaceutical model of regulation. That means every batch is tested in-state by certified labs for potency, purity and stray toxins. Sellers must be licensed pharmacists, or pharmacy techs with five years of experience. “They’re the only program in the country that defines pharmaceutical-grade marijuana,” Ferrarese says.
In the first week of April, he’ll be in Las Vegas along with Tom Schultz, president of Connecticut Pharma, sitting on a keynote panel and delivering a talk at Cannabis Conference 2019. He was at the talk at UConn as well, eager to relate his high-quality strains of cannabis indica or cannabis sativa, grown under intense, specialized lights, to fine points that make a difference in treating medical conditions. He’s working not only with UConn but also the Yale School of Medicine, where Tamas Horvath, chairman of comparative medicine, is looking at the effect of cannabinoids on cachexia, the weakening or wasting away of the body from cancer.
Could the munchies actually help keep seriously ill patients alive? The volume of research in Connecticut alone is hard to follow. “Everything is changing so fast, it’s like a tidal wave,” Berkowitz says. But, Ferrarese says, “Nobody is standardizing it.” That’s partly because the growers are half-science, half-competitive business. No one wants to give away a great seed.
Ferrarese comes from pharmaceutical manufacturing. He’s a certified Six Sigma black belt, the precision standard made famous at General Electric, and a lead auditor with the International Organization for Standardization. He worked at Alexion, the bio-pharmaceutical company formerly headquartered in New Haven, and at Wyeth in New York. He and Schultz worked together at American Distilling in East Hampton, maker of witch hazel, where Schultz was president of Dickinson Brands. American Distilling was, and remains, an original investor in Connecticut Pharma.
In this state, it’s the producers who package everything for final sale, sealed so that dispensaries can’t touch the actual flower buds. That means, for Connecticut Pharma, 70 different SKUs, or stock-keeping units: flowers in exact quantities and various forms of concentrates including hashish and dabs that patients take by vaping. “In America,” Ferrarese says, “we expect our consumer products to be always the same.”
All this tightly controlled regulation lives in the state office buildings overlooking the Connecticut River in Hartford, at the state Department of Consumer Protection. “We are the most restrictive state probably across the board, from what I understand, that allows marijuana,” says Rodrick Marriott, director of drug control for the department.
The state has, with no apology, the most rigorous rules on who can buy legal pot for a medical condition. Marriott, a licensed pharmacist, credits the General Assembly, which adopted a “pure medical approach” in passing the law in 2012. “The idea was, let’s get this to patients that really have medical conditions and let’s let the medical community decide where to add conditions,” Marriott says, “instead of opening up the floodgates and trying to get it back later.”
We’ve all heard stories about California’s loose rules back in the days before legalized adult use. For $45, you could call a number off a website, tell someone your back hurt and boom — the card was in the mail.
State regulation is basically all we have with marijuana because the federal government continues to classify ganja as a Class I narcotic. That means no federal research spending, it means dispensaries must take cash only, and it means nationally regulated banks can’t take cannabis industry companies as customers.
In a sign of change, last summer the U.S. Food and Drug Administration approved the use of CBD, the main non-psychoactive compound in cannabis, in treating children for certain types of seizures. Aside from that single use, “It’s rather ironic that the federal government has taken the position that there’s no medical purpose,” Berkowitz says.
Federal stubbornness turns states such as Connecticut, rich in academia, investment dollars and business services, into mini cauldrons for advancing cannabis. The view in Connecticut is clear: A pure, rigorous medical model is better for patients and product development. How that changes when the state adopts legal adult-use sale is anyone’s guess.
Among the 32 states with a medical marijuana program, only Connecticut and New Jersey don’t include chronic pain as an allowable condition for certification, according to the Marijuana Policy Project — and New Jersey is more lenient than Connecticut. “Treatment of chronic pain has gotten us into some trouble in our society because it’s not as measurable,” Marriott says, referring to the opioid crisis. “You experience pain differently than I do.”
The argument rages on.
Back in 2010, Dr. Andrew Salner had an older patient with colon cancer that had metastasized to her liver. She had severe nausea — not from chemotherapy but from the disease itself — and the usual drugs, including Zofran, didn’t work. “Her kids had gotten her marijuana on the street — to smoke,” Salner recalls. “This is a 77-year-old woman who was dying.”
Salner, then and now the director of the Helen and Harry Gray Cancer Center at Hartford Hospital, visited the woman at her home. She felt stigmatized by the illegal pot smoking and felt badly that her children had to risk buying it. “She says to me, ‘Promise you’ll do what you can to make this available to people that need it.’ ”
“I’ll do the best I can to make it a reality,” he told her.
True to his word, he testified in the General Assembly and met with the governor’s staff. And when it became law, Salner was an early adopter. He’s also one of eight doctors on the state medical marijuana program’s board of physicians, which advises the consumer protection commissioner and the legislature on allowable conditions.
“A lot of the patients who I’ve certified would otherwise not be marijuana users,” Salner says. “I try and tell them that this is not your marijuana from when you were back in your 20s.” They number in the hundreds, but they’re still just a small percentage of his cancer patients, he says — maybe 2 or 3 percent, for whom marijuana is the right treatment.
Five years ago, he says, there was still a stigma among his physician colleagues, some of whom asked what the hell he was doing. Today, cannabis has largely become accepted for palliative care of cancer patients.
Salner, a calming figure at the center, is designing a study to look at how and whether cannabis acts on pain from neuropathy, or nerve damage. He’s a self-described champion for certifying patients, but he’s cautious about it, describing the sorts of instructions he writes to the pharmacists. “Patients don’t want to smoke it and I don’t want them to smoke it because it has a lot of carcinogens from the smoke,” he says, preferring vapor, oils and capsules.
And he cautions that the scientific proof just isn’t there to expand to treatment of chronic pain or opiate addiction — just as it’s not clear, as some claim, that marijuana can help shrink tumors.
Salner, a radiation oncologist, has no opinion on legalization of adult-use marijuana and strongly favors Connecticut’s strictest-in-the-nation medical model. “As much as I would love to be part of the solution for the opioid crisis that we face, there really is no evidence, and there actually is some evidence that it might make the issue worse, not better.”
The software guys
Green Check Verified, a new start-up operating out of Science Park in New Haven, connects marijuana retailers to state-chartered banks and credit unions. “You’re seeing this explosion of technology around the marijuana industry because it’s all about scale,” says Paul Dunford, the firm’s director of customer experience. “Human beings can’t do the things that need to be done.”
The firm has 14 people and works with dispensaries, though they wouldn’t say how many, in 14 states. “These are legitimate businesses. They’re being denied things that no other business is being denied,” Dunford says. “The focus now is, how do we make the existing industry stronger, more efficient?”
Green Check’s co-founder and head of compliance is John Gadea, the former head of drug control at the Consumer Protection department, who wrote many of the marijuana program rules.
Lost on no one is that this is an estimated $12 billion global industry of legal sale now, but it’s growing at least 30 percent a year and the potential could be $200 billion. Firms like Green Check are, as one partner puts it, like the guys selling picks and shovels in the California gold rush. “Our job is to sit in the middle between the sales and inventory systems that a dispensary uses to manage their business, and the financial institutions and their systems,” product strategy director Mike Kennedy says.
Other services firms in law, accounting and building maintenance are quietly building up trades in cannabis as well.
As with other firms in marijuana services, Green Check Verified shows no images of the telltale leaf or other visual signs of the culture — not in the office, not on the website. Discretion remains common, especially in banking.
The race is on for consolidators and investors to advance the industry by doing what America does best: unify and organize. One of the largest owners of dispensaries is Acreage Holdings, a new, publicly traded company on the Canadian Stock Exchange — with strong ties to Connecticut.
Acreage was founded in 2014 as High Street Capital by Kevin P. Murphy, a New York investor and cannabis entrepreneur who was born in Connecticut and grew up in Madison, where he still owns a house. The company bought a Canadian firm and, in a reverse merger, took the Acreage name and the stock market listing. Reported to be the largest U.S. cannabis company, Acreage has licenses in 17 states including Connecticut, where it owns three dispensaries — all acquired in 2018. That includes the one in Bethel, Compassionate Care Center of Connecticut, whose co-founder, Angela D’Amico, is now the Acreage national vice president of community engagement.
Acreage has made a splash with its powerful, seven-member board of directors including former U.S. House Speaker John Boehner, former Massachusetts Gov. William Weld, and former Canadian Prime Minister Brian Mulroney.
Eric Zachs, who co-organized the UConn seminar, is another investor in the industry. His view is that Connecticut can punch above its weight through research and spinoff companies, and the Connecticut Cannabis Research and Innovation Center will be his vehicle.
Zachs is a former board president of the Hartford Dispensary, a drug addiction center now operating as the Root Center for Advanced Recovery, and he remains on that board. He’s concerned about social equity as the cannabis industry grows. “I’m really coming at it from trying to do the right thing,” Zachs says. “It’s clearly moving ahead. How does it benefit communities?”
He adds, reflecting the idealism and fresh networking of this new industry, “We’re just trying to connect … and build synergies.”