State reviewing dispensary group’s loan
Northeast Patients says it’s possible it could open a medical marijuana facility by mid-September.
By Michael Shepherd mainetoday.com
The terms of the deal between Northeast Patients Group and The Wellness and Pain Management Connection LLC were hand delivered Monday by Daniel Walker, Northeast’s legal counsel, said Catherine Cobb, director of Maine’s Department of Health and Human Services‘ Division of Licensing and Regulatory Services.
The next step is “to review (the loan terms) for consistency with the original application that was approved by the department,” Cobb wrote in an email Monday.
The 56-page document doesn’t stray from the earlier announced agreement, but is signed and clarifies the services The Wellness and Pain Management Connection — a combination of California-based The Farmacy Institute for Wellness and former NBA player Cuttino Mobley — will provide to Maine’s biggest medical marijuana license holder.
The agreement breaks the loan into two parts: a $250,000 loan dated April 15 and executed Aug. 3, and a $1.35 million loan, dated and executed Aug. 3.
Disbursements on the larger loan will be paid in five installments, with $500,000 available immediately. Another $200,000 will be paid a month from closing, with $250,000 ready 45 days after closing, $250,000 four months after closing and $150,000 six months after closing.
With the loan, Northeast is paying $10 “and other good and valuable consideration” for consulting services from the group, including cultivation; quality control; operational services including nutrient lines, hiring of top officials and cultivation equipment; website development, marketing and public relations; information technology; security; and merchant services.
Mobley, 35, who also holds a license to operate a compassion center — the equivalent of a Maine dispensary — in Rhode Island, signed the $1.6 million agreement on behalf of the group.
The Farmacy Institute for Wellness is an offshoot of the Farmacy, which operates three dispensaries in California.
JoAnna LaForce, director of clinical operations for those dispensaries, will oversee consulting services, according to documents.
The limited liability company was formed in Delaware on Aug. 3, the same day documents say much of the agreement was reached.
Under the terms, Northeast is not allowed to engage with competitors of The Wellness and Pain Management Connection and can’t interact with third-party lenders or financiers. It also must maintain $29 million in various insurance policies.
The Wellness and Pain Management Connection also agreed to provide Northeast with $400,000 in “equipment” at fair market value — ranging from computer software to labeling and cultivation equipment.
The document also outlines financial projections, which don’t stray from earlier reports. On July 20, Northeast projected a net loss of more than $1.75 million while serving 540 patients in its first full year.
Last year in its original applications, which won it four of Maine’s eight dispensary licenses, Northeast projected a net gain of more than $426,000 while serving 691 patients in its first full year.
Northeast holds licenses to operate dispensaries in the Bangor area, Kennebec County, Portland and Thomaston. None has opened, but Walker said last week that the Thomaston location would open by mid-September.