S. Jersey's first medical marijuana facility nears launch date

Posted: April 22, 2013

EGG HARBOR TOWNSHIP, N.J. - The din of power tools echoes through the cavernous warehouse that once housed Donald Trump's surplus blackjack tables and where purple-patterned carpeting evoking his casinos still covers the floor inside the office.

The landscape inside is fast being altered. Here, the seeds for South Jersey's first medical marijuana farm are expected to be planted next month, and plastic vials of marijuana are scheduled to be sold beginning Sept. 9.

The facility, in an industrial park outside Atlantic City, would be only the second such "alternative treatment center" to open in the state more than three years after the state's medical marijuana program became law.

"Only force majeure could stop us . . . or acts of God," said William Thomas, chief executive of Compassionate Care Foundation, as he surveyed the progress of his $1.7 million renovation project last week.

At least three previous launch dates have failed to materialize. But now, the plan has momentum, he said.

Once the site gets the state's final approval to begin growing, 2,000 seeds will be imported from Spain - which produces marijuana strains that target spasticity caused by MS, he said. Rows of temperature-controlled red and blue lights are being installed in the 85,000-square-foot warehouse to nurture the crop.

"This is not your pothead operation," Thomas said.

The purple carpet in the front office will be ripped up so a less gaudy dispensary can be created to serve 25 to 30 "very sick" patients a day. Thomas plans to grow enough marijuana to serve up to 700 patients.

Initially, Thomas said, the cost per ounce will be $500 - not covered by insurance.

"We have to pay off our debt," he said, adding that he expects to reduce the price to $300 an ounce as more patients become clients.

It has not been clear sailing. Thomas' nonprofit organization had to overcome unanticipated obstacles, beginning with protesters who feared his business might attract "potheads" and criminals to their neighborhoods.

Thomas said his plans were rejected by mayors in 20 South Jersey municipalities - sometimes after residents stormed municipal meetings. Finally, Egg Harbor officials welcomed the business.

Under New Jersey's medical marijuana program, only patients who have cancer, multiple sclerosis, Crohn's disease, or a list of other serious ailments are eligible to purchase the drug.

The next delay came as the nonprofit's principals, lenders, and employees underwent months of background investigations. That led to the discovery that one lender's late father was a member of New York's Genovese crime family.

Seven months went by without any word from the state, Thomas said, something the state Health Department denies. Then, last September, Thomas said the Health Department said it would not approve the nonprofit's application if Adam Levy was a participant.

Levy, whose father, Morris, died in prison two decades ago after being charged with extortion, did not return calls for comment.

But he has said in published reports that he had divulged who his father was at the outset of the investigation and also that he himself had never been involved in the crime family's business.

"If a son is condemned because of who his father is, I should have been told," he was quoted as saying in the Star-Ledger, saying he had lent "in the high six figures" to the nonprofit.

"We don't know why he was not approved. They won't tell us that," Thomas said, adding that investigators held the principals and lenders to the same standard as casino operators, requiring them to divulge all of their financial and litigation history.

Thomas said that he was unaware of Levy's background, but that when he learned it would hurt the application, he terminated the contract with the consulting and lending company where Levy was a partner.

Thomas said it then took six months for the lending company to reorganize without Levy.

A spokeswoman with the Health Department would not comment specifically on the Compassionate Care investigation last week.

In an e-mail last month, Donna Leusner, the department's director of communications, wrote that "the department is committed to ensuring ATCs are operated by responsible individuals who embrace our goals of timely, safe and responsible access by patients."

Thomas said he was confident the plans would not be derailed again.

"The state is pushing us to open," he said. An inspector visits the facility once a week, he said, to observe the progress and help with the approval process.

Leusner has said the visits are part of the department's "effort to streamline the process" and get all planned dispensaries to open. The state has selected six nonprofits to open facilities. With just one, Greenleaf Compassion Center, actually open so far, patients have said the approval process has moved too slowly.

Nearly 850 patients are registered statewide, but Greenleaf, based in Montclair, has restricted its clientele to North Jersey residents.

Thomas said marijuana flakes will be sold in plastic vials in the first few months. Later, he said, the product will be sold also as a lozenge and a lotion.

Thomas said the price was high because the nonprofit was paying 18 percent interest on the private money it has borrowed.

Because the federal government still views the drug as illegal, the nonprofit cannot obtain bank or Small Business Administration-backed loans to help defray expenses, he said. The federal government also won't allow lenders to take deductions for making a donation to a nonprofit.

The U.S. Attorney General's Office has told the states that have medical marijuana that it will not prosecute as long as the drug is restricted to sick people and state laws are followed.

Thomas said he gets calls daily from patients who ask when his dispensary will open.

"This is the hardest thing I've ever done," said the retired health insurance consultant. "I don't think anyone knew what was involved. It's something so new."

Contact Jan Hefler at 856-779-3224 or jhefler@phillynews.com, or follow

on Twitter @JanHefler. Read her blog, "Burlco Buzz," at www.philly.com/BurlcoBuzz.

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