Medical marijuana process slows to a crawl in N.J.

Four years ago, Compassionate Sciences was selected as one of six nonprofits approved to open a medical marijuana dispensary in New Jersey. Now, as state regulators examine the principals' finances, workers hired to run the business inside a freshly painted former T-shirt factory in Camden County sit idle.

PalliaTech, the affiliated company that would operate the dispensary in Bellmawr, is not complaining - or waiting around.

PalliaTech is aggressively pursuing licenses to open cannabis dispensaries, grow sites, and laboratories in other states. This month, the Long Island-based company applied for a license in New York, which, unlike New Jersey, is fast-tracking its 18-month-old medical marijuana program.

"If we win, it will entitle us to open up four dispensaries and a grow-and-manufacture plant," said Andrei Bogolubov, an executive vice president of PalliaTech, and a spokesman for that company and for Compassionate Sciences.

PalliaTech is "dedicated to unlocking the therapeutic value of medical cannabis," its website says. It lists Compassionate Sciences as one of its operations. Bogolubov said PalliaTech helped prepare Compassionate Science's application and has an agreement to run the dispensary.

Richard Taney, PalliaTech's CEO, was listed as Compassionate Sciences' CEO on the New Jersey application. Compassionate Sciences currently has no CEO, but its board of trustees includes Webster Todd Jr., the brother of former Republican Gov. Christie Whitman and a former state assemblyman, who was also named on the application.

Some New Jersey marijuana patients and advocates view PalliaTech's wandering eye as another blow to the state's long-stalled program. Five years after medical marijuana was legalized, only half the permitted dispensaries have opened. About 4,000 patients have registered to participate, a far cry from the 100,000 anticipated.

PalliaTech has not "served a single gram of marijuana and hasn't gotten its permit to grow," said Chris Goldstein, an activist with the Coalition for Medical Marijuana New Jersey and a columnist for Philly.com.

"But they say in their press release that they have navigated the program. . . . What does that say to New Jersey patients who have been waiting?"

Roseanne Scotti, director of the New Jersey Drug Policy Alliance, said the state should reexamine the licenses. "Anyone who hasn't got up and running, or hasn't made significant progress, they should have their licenses pulled," she said, saying many patients have to travel long distances to the three dispensaries that are open.

Bogolubov said PalliaTech is optimistic that it will be able to open soon in Bellmawr. "We are ready to go and have a good team that is itching to go," he said.

As cannabis entrepreneurs like those at PalliaTech compete for licenses across the country, they are comparing the 23 states with marijuana programs, and establishing alliances with former politicians and top law enforcement officials who can give them an edge.

PalliaTech operates a lab in Colorado and has a license for a dispensary in Illinois. New York is its next project.

The company recently announced it had hired John O'Brien, who was New Jersey's marijuana program director for four years, to serve as the compliance officer in New York. O'Brien, a former state police lieutenant, quietly resigned as director in April.

Shortly before his departure, an NJ Advance Media report quoted O'Brien as telling Michael Weisser, CEO of the Garden State dispensary, that he could not explain the 18-month delay in approving a manufacturing process to make edible marijuana for sick children. "This is being stonewalled and has to be addressed," O'Brien told Weisser, and said it was up to the health commissioner, the article said.

Bogolubov said PalliaTech later tapped O'Brien because of his experience with the New Jersey program. "He will be a tremendous asset for us in not only making sure we comply, but that we can comply and get up and running very quickly," Bogolubov said.

O'Brien could not be reached for comment.

In contrast to the pace in New Jersey, New York has announced it wants the dispensaries open in January, less than two years after the marijuana law was signed. "It's a very aggressive timeline," Bogolubov said. He said that if PalliaTech gets a license, it will own and operate the dispensaries.

New York prohibits smokable marijuana from being sold and allows only gelcaps, drops, oils, and similar pharmaceutical-type products.

In New Jersey, cannabis buds are sold, and edibles for children are allowed but have not yet been approved.

The principals of the Garden State dispensary in Woodbridge have also applied for a New York license. They have recruited Michael Balboni, a former New York state senator and Homeland Security adviser, to work on compliance, according to a report in Newsday.

When Gov. Christie inherited the marijuana program in 2010, he immediately said he never would have signed the bill. After he approved a series of strict regulations that some patients view as hindrances to the program's growth, he warned he would veto any bills to expand the program. Christie has said he wants to prevent medical marijuana from being diverted for recreational use, which he opposes.

Bogolubov has not criticized the delays Compassionate Sciences has faced in getting final approvals to open for business. "We are hopeful that Compassionate Sciences will be approved to begin growing soon," he said.

When state Health Department spokeswoman Donna Leusner was asked this month about the status of the review process for the Bellmawr site, she wrote in an e-mail: "The background examination . . . is in the final stages of review. . . . A grow permit will be issued once the final review is complete." Asked for an update Monday, another spokesperson reported there was none.