Medical marijuana: a new view of the Arizona bio-life science

A view of the flower derived from the marijuana plant, which is now becoming a part of the day-to-day lives of those seeking relief from chronic illness. (Photo credit: wikimedia)

As Americans begin to come to terms with the ill effects of the pharmaceutical smörgåsbord offered for minor ailments to advanced critical illness, a new commodity is beginning to emerge in towns and cities across the nation.

From alternatives of the go-to-pain prescription — the opioid — and the shifting of perspectives, depending on who you ask, a new miracle drug is emerging: THC.

THC, which is short for tetrahydrocannabinol, is the principal psychoactive constituent of cannabis. In 1996, California became the first state to legalize medical cannabis, sparking a trend that has now touched many states.

Pills like this hydrocodone tablet are many peoples’ first introduction to the world of opiods that, in recent years, has translated into addiction, death and destruction. (file photo)

In 2016, 790 Arizonans died from opioid overdoses while zero deaths have been reported in Arizona as a result of medical marijuana use despite a rampant up-tick to those who seek the naturally occurring herb for consumption on a legal basis.

As the nation seeks ways to combat the rising death toll caused by opioids more and more patients are seeking alternatives. As morals, medical science and, most important, state and local laws change, patients are turning to new perspectives to combat both failing mental and physical health.

The number of qualifying patients who have access to medical marijuana facilities — places where terms like “flower,” “concentrate” and “edible” permeate between halls — has more than doubled, records show.

According to one local dispensary, a qualifying patient with one debilitating medical condition can apply for a patient card with written certification from a physician. Qualifying conditions, according to Harvest of Scottsdale, include chronic pain, cancer, HIV, AIDS and Crohn’s Disease.

In May 2015, the number of Arizona residents who are qualifying patients of medical marijuana was 73,739, whereas in May 2018 that number swelled to 169,478 qualifying patients, according to the Arizona Department of Health Services.

Over the last three years, two items have remained constant, numbers show:

  • The age group of 18 to 30 years in 2015 accounted for just over 24 percent of the qualifying Arizona patient population. Today that same age group accounts for nearly 25 percent of the qualifying public.
  • The No. 1 ailment is overwhelmingly identified as “chronic pain” with nearly 73 percent in 2015 and 86 percent of today’s qualifying patients are seeking medical marijuana for relief to the ailment.

In Maricopa County, which is the fastest growing county in the nation, there are 108,811 current medical marijuana cardholders, 541 caregivers and 3,090 agents.

But in Scottsdale, which has one of the oldest populations in the state, the municipality has seen relatively few marijuana dispensaries and city officials say the opportunity for expansion has been curtailed.

“From a direct-to-consumer perspective, there are very few dispensaries in Scottsdale, with very few locations eligible for more, so the economic impact is small,” said Kelly Corsette, the city’s public affairs director.

But despite the city’s geographic proclivity toward possible expansion of the industry, the debate over drug vs. medicine continues while investment for the new bio-life science space is approached on a case-by-case basis.

At Harvest Scottsdale a new trend is blooming as an emerging medicine continues to permeate the minds of those seeking a new — and arguably a safer — way to heal what ails them. (Photo credit: Harvest Scottsdale)

Medicine or drug abuse?

The idea of what and how a local bio-life science industry can impact a municipality and human being could become a moniker of the burgeoning medical marijuana industry.

“When people talk about bio-life science there are different genres that are in the same vein, which is making life better for people, but like any genre they are very, very broad,” said Joan Koerber-Walker, who is president and CEO of the Arizona BioIndustry Association.

Joan Koerber-Walker

“In those categories you would include traditional pharmaceuticals, but when we talk about bio or life sciences we are talking about the natural body and by that definition marijuana at one point is alive. So, to say it is a part of the bio-life sciences, yes, it is a natural product and it would fall into that category.”

To predict the future of the medical marijuana industry would be purely speculative at this point, Ms. Koerber-Walker says, but acknowledges advocation for the natural occurring medicine is a belief system.

“Those products are not being tested today the same way that a drug would be tested — there are different schools of thought on those types of products,” she said pointing out medical marijuana products are not going through the scrutiny of clinical trials at the Food and Drug Administration.

One such product is cannabidiol, or CBD oil, which is classified as one of the at least 113 cannabinoids identified in cannabis. Of more than 480 compounds present in the cannabis plant, only 66 have been identified as cannabinoids — the most well-known being THC.

“Those companies have been very, very careful on what kinds of claims that they make,” Ms. Koerber-Walker said of outfits offering the new popular health supplement, which she claims is akin to a fish oil supplement.

“On the other side of it, there are companies who are working with the synthetic version of CBD. To take the synthetic versions of those products and make them for pharmaceutics — the benefit of the synthetic opposed to the natural product is control. When a natural product is grown, being able to measure the efficacy of the product is impossible.”

But the purpose of the bio-life sciences sector is to develop drugs and therapies that can help people, Ms. Koerber-Walker contends.

“The purpose of the bio-life sciences industry is to develop new legal drugs and therapies that can be alternatives to opiods,” she said. “One of the challenges is that opioids are cheap. The reality is to bring a new drug from discovery though delivery can cost billions of dollars to get it there.”

But for Chris Ras — director of operations at SWC in Tempe, which is an Arizona subsidiary of Columbia Care — the product at market is changing the comfort for patients in Arizona every day.

A Cornell University graduate and longtime retail leader, Mr. Ras said he came into the industry with the intentions to help people.

“I was really looking for an industry that I could bring my care of people and I wanted to make a difference,” he said. “Outside of tech, this is one of those industries that are moving quick and I want to provide my experience in leadership and the business world to make a difference in the cannabis industry.”

Mr. Ras contends employment at Columbia Care is an opportunity to change the conversation about a new approach to medicine.

“There is so much more science proving that medical marijuana has a place in medicine,” he pointed out. “I believe in the company’s vision statement: to meet the world’s unmet medical needs. I don’t think this is a risky platform at all for investment — I think patients will continue to benefit.”

In Arizona, Columbia Care operates two dispensaries, with locations in the city of Prescott and the city of Tempe.

It’s smiles all around as more and more Arizonans seek new approaches to help cope with major health ailments aside from the constant usage of opiates. (Photo credit: Harvest Scottsdale)

The laws of investment

Opportunity for growth and public and private investment are very limited, according to people familiar with both the traditional banking model and private equity.

Laura Bianchi

“From my perspective, marijuana has many benefits — many that we have yet to discover,” said Rose Law Group Partner Laura A. Bianchi, who is the director of the firm’s cannabis department.

“It has been proven to help the effects of serious ailments. I can tell you from a personal perspective, I use CBD topical products as an alternative to pain medication when treating aches, pains and injuries.”

But to help cultivate the fledgling bio-life science commodity cash, more often than not, needs to be in hand.

“There is currently little to no access to traditional banking, financing or lending. And, what that has done is create a significant market for private money lending, in which interest rates can be high and debt accumulation significant. In addition, just operating your business on a day to day business can be exceptionally difficult without access to banking and depository accounts.”

In February 2014, the Department of the Treasury Financial Crimes Enforcement Network issued guidelines for banking institutions seeking to stick their toe in medical marijuana waters.

Those guidelines include:

  • Verifying with the appropriate state authorities whether the business is duly licensed and registered;
  • Reviewing the license application (and related documentation) submitted by the business for obtaining a state license to operate its marijuana-related business;
  • Requesting from state licensing and enforcement authorities available information about the business and related parties; and
  • Developing an understanding of the normal and expected activity for the business, including the types of products to be sold and the type of customers to be served (e.g., medical vs. recreational customers).

“While the purpose of the FINCEN letter was to provide guidance as to how financial institutions could provide services to marijuana-related businesses, for many local and national institutions, the perception was that providing such services would create risk, risk that many have deemed too great. That’s unfortunate.” Ms. Bianchi explains.

“These cannabis programs have been approved by each respective state and as such, by operating in compliance with state law, rules, regulations and reporting requirements, you can do business with marijuana related businesses,” she said. “The extreme burden placed on cannabis business owners is unfair and creates hardships. For example, without access to traditional banking, if a cannabis business owner pays Internal Revenue Service in cash, it is penalized for doing so.”

Arizona-based Harvest Dispensary CEO Steve White believes marijuana is medicine and the longer they exist the stronger banking relationships become. Harvest Dispensary is at 15190 N. Hayden Road in Scottsdale with six other locations around the state.

“Cannabis companies generally do not have the same access to capital as most emerging companies do, so yes, that is a challenge,” he said, but points out his company’s mission to improve the quality of lives of patients who frequent the dispensary.

“Marijuana has been medicine for thousands of years. There is research that demonstrate its efficacy for a number of conditions. That research has been supporting our services of patients in multiple states.”

Those seeking care may not fit a typical stereotype, Mr. White contends.

“Our average patient is somebody with a qualifying condition in their 40s,” he said. “The total patients we see is representative of the population of Arizona. We see people of different colors, creeds, races and generation — you name it.”

Mr. White says his business model has legs, but calling it a “boom” would be a bit exaggerated.

“Emerging business is probably more factual than a boom,” he said. We are fortunate enough to having banking relationships, but I know of others who are not as fortunate. To date Harvest, as a company, has done very little outside capital raising.”

Independent Newsmedia Arizona Managing Editor Terrance Thornton can be contacted at

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