Updated June 25
Patient Centric of Martha’s Vineyard, the Island’s first and only licensed marijuana establishment, has ties to one of the largest cannabis operators in the U.S. — New York–based Acreage Holdings. The partnership went into effect November 2018.
“When I first started this effort, I did have local individuals who were lenders to Patient Centric,” CEO Geoff Rose told The Times. “But the capital requirements to do what’s needed to do this properly were well beyond what I could raise locally, and that’s where Acreage Holdings came in.”
According to MetroWest Daily News, Acreage Holdings fronted a $550,000 bridge loan to Patient Centric to build out its facilities last fall, and in return, Patient Centric will pay Acreage a monthly management fee of $10,000, plus 1.5 percent of its revenue, and 25 percent of its quarterly earnings before interest and other expenses. Interest on loans will be as high as 15 percent, according to the MetroWest article, and confirmed by Rose.
Rose said he is the sole shareholder of Patient Centric, and Acreage Holdings offers financial and operational support. “They do not own anything,” Rose said. “They are a lender, and they provide management services.”
Acreage Holdings provides funds to all Patient Centric operations — the licensed medical dispensary on State Road in West Tisbury, the licensed cultivation site on Dr. Fisher Road in West Tisbury, the proposed recreational dispensary at Woodland Center in Vineyard Haven, and the proposed recreational dispensary at 85 Worcester Rd., along Route 9, in Framingham. Patient Centric was one of the six dispensary operators to clear the city’s review process, according to MetroWest Daily News. Rose filed his recreational application in February, and Rose said he and Framingham city officials are still in the process of establishing a host-community agreement. Rose is also in the process of establishing an agreement with the town of Tisbury for the proposed recreational dispensary at Woodland Center, which has prompted community pushback.
“Acreage has vast experience, so they bring support in every area of operation,” Rose said. “When I need that support, I call on them. I talk to numerous consultants depending on what my specific needs are.”
Needs might include dispensary operations, extraction support (taking raw product and creating edibles), human resources, hiring, and for the proposed Framingham dispensary, cannabis product sourcing. “Wholesaling of product on the mainland is a very common process,” Rose said. The West Tisbury and proposed Vineyard Haven facilities, however, cannot source cannabis from their off-Island partner, or anywhere off-Island, due to federal laws that prohibit transit of marijuana over federal water. “For as long as it’s federally illegal, it’s always going to be illegal to transit,” Coast Guard Petty Officer Nicole Groll has told The Times.
Rose said the Cannabis Control Commission, the governing body of marijuana in Massachusetts, is well aware of the Patient Centric–Acreage Holdings relationship, and “it’s perfectly within the industry guidelines.” But in March, Acreage Holdings was at the center of a Boston Globe Spotlight investigation uncovering large cannabis companies that are finding loopholes to the state law prohibiting firms from owning or controlling more than three recreational pot shops. Acreage Holdings, according to the Globe investigation, supports at least nine. Both Patient Centric’s West Tisbury and Framingham facilities are listed in the article, as is Nantucket’s Mass Med-Spa.
When Massachusetts legalized recreational marijuana in 2016, it did so with the intent to be different from other states. Massachusetts implemented laws that made it clear that large companies weren’t supposed to monopolize here. It was also the first state to promote social justice goals, and promote small and minority entrepreneurs, according to the Globe investigation.
“I don’t know what Acreage Holdings is,” said Melinda Loberg, chairman of the board of selectmen in Tisbury. “The only thing I do know is that Geoff has investors.”
And so does Acreage Holdings. South Shore BioPharma, for example, is the entity to which Acreage has assigned all Patient Centric management responsibilities. “They are the management organization that we work through,” Rose said.
There’s also talk of Acreage Holdings being acquired by Canopy Growth — a Canadian cannabis firm, and one of the largest marijuana companies in the world.
“Canopy Growth Corp. is not outright acquiring Acreage Holdings Inc.,” MarketWatch reported in April, “but it is preparing to pay billions for the rights to buy the U.S.-based pot company.”
Acreage Holdings has a market cap of $2.5 billion, and Canopy Growth has a market cap of more than $14 billion, according to MarketWatch.
“It’s like Dunkin’ Donuts having a share of Mocha Mott’s, or Papa Gino’s having a share of Giordano’s,” said Oak Bluffs resident Beau Sander Henderson. Hendersen is in the process of filing the appropriate paperwork to apply for a recreational marijuana license on the Island as BEAUtiful Holdings, LLC.
When asked why the partnership hadn’t come up with the town or Island community, Rose said it’s a private business matter. “Businesses borrow money all of the time,” he said.
Rose added that Patient Centric still sources locally whenever it can.
“All of the construction of the building in West Tisbury, the electrical work, IT — it was all done by local contractors,” Rose said. “When Acreage came along and wanted to lend me money, I think I did what any prudent individual would do at that time, knowing this is the service the community wanted. I had to find a way to bring it to the community.”
Updated to correct the spelling of Beau Sander Henderson.
“They do not own anything”… except for Geoff Rose. They own him.
Sooo, when (if) the bank loans you money, do they own you? A bit unfair and presumptive to make assumptions about Geoff just because you oppose cannabis legalization. I don’t know, but I assume Geoff would have preferred a bank loan as the terms would probably be less egregious. Federal cannabis laws make this impossible. Ha-ha, you can use it, you can sell it, we can tax it, but don’t go to the bank with your money.
stbg: A bit unfair and presumptive to make an assumption about me. I do not oppose cannabis legalization. There is a big distinction between medical and recreational use, and to lump everything into one big, black or white, for or against, is unrealistic. And do you know what happens when you default on a loan to a bank on your mortgage?
All the nonsense about weed in this state is caused by the failure of MA to use rationality for pot regulations (plus Federal govt. idiocy — what a mix!). Our MA Pot laws should be called the “Lobbyists, Lawyers, Bureaucrats, State Coffers and Big-Dollar Corporations Enrichment Act”. Playing by the rules costs untold millions. Small or even medium players are totally frozen out of the market.Thus it is guaranteed that both black and gray markets will thrive, while a handful of legal operations are forced to sell overpriced product, while having to consolidate to near-monopoly status. A sadly predictable and despicable situation.
Wow was that well put or what. Folks, read that post over and over. Talk about succinct.
Jackie is correct. Rose will not be able to pay the management fee nor the interest and profit share. His revenue will be insufficient. He will go bankrupt but Acreage Holdings will take the loss. Rose will be left with nothing. More marijuana to this island will further decline it.
Geoff has his grow facility built and all permits in place. His grow building complies with all applicable regulations, including zoning. He and his investors have had an expensive path and have overcome risk as pioneers. I admire their guts and tenacity. There is nothing wrong with a little injection of venture capital and professional expertise to keep things on track.
What everyone fails to understand is not to look at Geoff Rose. Once this operation is up and running any character from anywhere can buy his company.
Comments are closed.