AUSTIN – Investors and entrepreneurs from across the country are paying close attention to Texas’ new medical marijuana law.
An abandoned cotton gin in the small North Texas town of Gunter could soon be the birthplace of the state’s medical cannabis industry. Texas’ 2015 compassionate use law allows the production and sale of oil extracted from a special strain that doesn’t produce a high and has no street value — but is prized for fighting epilepsy.
Adam Bierman is co-founder and CEO of MedMen, a California-based company that provides management consulting and capital investment through a private equity fund. Speaking with KVUE during a trip to Austin this week, Bierman explained both are challenges for medical marijuana startups.
“What you have is the big money center banks won’t bank the industry. They won’t participate at all,” said Bierman. “I know it’s a combination of reputational risk that still exists for these large institutions that have all different types of money that they’re banking and that they’re investing, and then it’s also from a compliance standpoint.”
While lending institutions work to make compliance more cost-effective, many medical marijuana supporters believe the Texas law could be improved. Some critiques are technical, like whether language requiring a doctor’s prescription should be changed to a doctor’s recommendation, while others argue for a broader range of potency and more qualifying conditions, such as cancer and PTSD. Bigger changes will be a tougher sell, but Bierman sees profit.
“I don’t think it takes decades in Texas. I think that Texas is on a path to creating a real viable program from a business perspective,” said Bierman. “Texas is one of the most important states, one of the most important markets in North America, period. I think that Texas is very important from a political standpoint because of what it represents.”
In ruby red Texas, rock-ribbed Republican Gov. Greg Abbott signed off on the law, which was authored by medical business consultant and Tea party state Rep. Stephanie Klick (R-Fort Worth). Hundreds of people from all political stripes showed up to the Texas Capitol to lobby in favor of medical marijuana legislation last session.
“To see that kind of unity is very encouraging, and that’s why we’re spending the time down here,” said Bierman. “We think that this will be a very real industry that will be run by, for the majority, Texans, that want it for the right reasons, and then will be good business citizens and will just help the community in general.”
The licensing and regulation of CBD oil is under the control of the Texas Department of Public Safety (DPS), which is scheduled to issue the first permits in June 2017. As provisions of the new law begin to take effect, the department has set up a website to answer questions about the law and its implementation.