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Lots of interest shown for new batch of marijuana licenses

Massachusetts’s first medical marijuana dispensary opened last week in Salem.
Massachusetts’s first medical marijuana dispensary opened last week in Salem.Jonathan Wiggs/Globe Staff

More than 50 applications from companies eager to open medical marijuana dispensaries flooded the offices of state regulators this week, two years after Massachusetts launched its ill-fated licensing process.

The submission of so many applications indicated robust interest in the state's emerging medical marijuana industry. The state had previously licensed 15 dispensaries, with the first opening last week in Salem.

For marijuana executives who lost hundreds of thousands of dollars vying for licenses during former governor Deval Patrick's administration, the opportunity to apply again couldn't come soon enough.

Concerns about political favoritism, conflicts of interest, companies with questionable financial structures, and executives with questionable pasts mired the process last time around. As a result, more than two dozen lawsuits were filed, and patients were left without any dispensaries until last week.

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Regulators from the administration of Governor Charlie Baker recently revamped the system for awarding licenses, promising the new process will strip away the subjectivity and secrecy that had tainted it under Patrick's tenure. The latest applications will be considered in the order received, the state Department of Public Health said Tuesday.

The health department has not released the names of the applicants, but the leaders of several marijuana companies confirmed Tuesday they had reapplied.

"I have learned to meter my expectations based on the rough road we had," said Jeffrey Roos, chief executive of Mass Medi-Spa, which has reapplied for dispensary licenses in Norwell and Nantucket.

Roos said he believes his company was unfairly knocked out of the selection process last time, based on a faulty review by health department contractors. Now, he said, he has more confidence after hearing the Baker administration's plan to license dispensaries in a format similar to other health care facilities, such as pharmacies.

Each application will be judged on its merits, using guidelines posted by the department on its website, and will move forward when the company meets the overhauled standards, officials have said. The old system involved scoring, essentially pitting applications against each other.

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Roos said his new applications closely resemble his earlier ones, but he has beefed up his board of trustees, including the addition of Dr. Bob Arnot — a physician, author, and former news correspondent for CBS and NBC — to advise the company on medical issues.

"Dr. Bob is a longtime Nantucket summer resident," Roos said. "He has a passion for cannabis science and the opportunities that lie ahead of us."

Arnot's agent, Alan Morell, confirmed that his client has agreed to be a medical adviser on Medi-Spa's board.

One name that has left the lineup of applicants is William Delahunt, the former US representative from the South Shore.

Delahunt's former company, Medical Marijuana of Massachusetts, resubmitted just one application, for a dispensary in Plymouth County, according to its new chief executive, Jonathan Herlihy.

Under the Patrick administration, the company had been tapped for three dispensary licenses, in Mashpee, Plymouth, and Taunton. But regulators later rejected the company after questions were raised about its financial structure and potential conflicts of interest between Delahunt and the Patrick administration's health commissioner, Cheryl Bartlett. Delahunt has since left the company.

A judge in April ruled that regulators acted improperly when they dropped Medical Marijuana. The judge ordered that the company be allowed to move ahead with its plans in Mashpee and Plymouth, and Herlihy said he is now working with state regulators on those applications.

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Amid the legal morass, Herlihy said his company continued to pay rent on a vacant, 46,000-square-foot cultivation center for the past 18 months.

"We raised $3 million and spent quite a bit of that on rent and lawyers," Herlihy said. "We now have to raise another $3 million or more to go forward. We have to go back to those investors and see if they are willing to contribute more."

Rina Cametti, president of Beacon Compassion Center, is also huddling with her investors. The company this week submitted three applications, two in Norfolk County and one in Middlesex County. Cametti's company was one of five that received among the highest marks during licensing evaluation by the Patrick administration, only to be left hanging.

At the time, regulators would say only that one of Beacon's executives didn't pass a background check, but that if the executive were removed, the company could continue in the licensing process.

Beacon Compassion and the other four companies removed executives deemed questionable by regulators, but the companies were then all rejected without comment.

"I think this process makes so much more sense this time around," Cametti said. "I have my fingers crossed that the Baker administration will work in a much more timely manner."


Kay Lazar can be reached at Kay.Lazar@globe.com Follow her on Twitter @GlobeKayLazar.