Ari Hoffnung, CEO of Vireo Health of New York, stood before a row of cameras and notebook-wielding reporters in the waiting room of the drug dispensary that his company expects to open Thursday in downtown White Plains at the start of the state”™s medical marijuana program. Behind him, workers put the final touches to the corner office at 221-223 E. Post Road, where an ID checkpoint for visitors in a locked entry alcove and 24-hour video surveillance pointed to the precautions and state-imposed regulatory controls that accompany the program”™s launch.
A former managing director at Bear Stearns until the investment bank”™s financial collapse in 2008 who later served as a New York City deputy comptroller, Hoffnung last November joined Vireo Health of New York, one of five winners among 43 applicants for the state”™s first medical marijuana manufacturing and dispensing licenses. His own New York City company, Fiorello Pharmaceuticals Inc., which he founded two years ago and led as CEO until his move to Vireo, was among the losers in Albany last summer with its failed bid to build a medical cannabis facility in Schenectady County.
“Something extraordinary and something very historic is about to happen in this facility here,” Hoffnung said before leading the press on a brief tour of the dispensary”™s consulting rooms ”“ one equipped with a small play area for pediatric patients ”“ and pharmacy counter. For the first time in nearly a century, medical cannabis will be available to patients in New York state, he said.
In White Plains, the Vireo Health dispensary will be open from noon to 7 p.m. Monday through Saturday, operating at the start with a core staff of three employees. Both patients using the dispensary and physicians who prescribe medical marijuana must register with the state Department of Health. Patients, limited to those suffering from certain severe, debilitating or life-threatening conditions, must first be certified for the program by their doctors, who are required to complete a four-hour online course before participating in the program.
Hoffnung and chief medical officers at Vireo Health of New York and its parent company in Minnesota, Vireo Health LLC, sought to dispel the public”™s fears and misconceptions about the new medical marijuana program and counter some misleading press coverage they have seen. No “joints” or “buds” will be in the office, said Dr. Laura Bultman, clinical director of Vireo Health, using popular terms for pot smoking and the mind-altering parts of marijuana plants. Rather, the office will dispense pharmaceutical-grade medical cannabis extract products taken either orally as a liquid or capsule or inhaled as vaporized oil, she said.
Those products are organically grown and processed at Vireo Health”™s upstate production facility in the town of Perth in Fulton County. The medical marijuana company is the first tenant in the 515-acre Tryon Technology Park, the site of the former Tryon Residential Center, a state prison for juveniles that was closed in 2011 by Gov. Andrew Cuomo. Vireo has opened a 21,000-square-foot manufacturing facility in a converted prison building and a 19,000-square-foot greenhouse, said Josh O”™Neill, Vireo”™s chief operations officer, and has bought 21 acres in the business park to accommodate future growth for the enterprise.
The sources of the seeds that are the agricultural foundation of New York”™s medical marijuana industry are not openly talked about ”“ or the stuff of fairy tales ”“ in a nation where cannabis remains classified as an illegal controlled substance by the federal government, Bultman said.
“It”™s ”˜don”™t ask, don”™t tell,”™” she said. “Even obtaining seeds is interstate commerce. ”¦In our states where medical cannabis is legalized, a stork brings the seeds.”
Bultman said Vireo”™s New York startup has benefited from the physician-led company”™s experience in Minnesota, where a Vireo Health subsidiary, Minnesota Medical Solutions LLC, opened its first medical cannabis facility in July last year.
“You learn a lot of lessons the first time,” she said. “Startups are tough.” Applying lessons learned in Minnesota, “It”™s a much more streamlined, efficient operation here because of that,” she said.
Vireo Health officials said they did not know the number of New York physicians who to date have registered in Albany for the state”™s medical marijuana program.
“The medical community can be a little bit conservative at times,” Bultman said. “I think there”™s a lot of physicians that don”™t want to be on board for a medical marijuana program that is less regulated and more recreational.” Bultman said she thinks the tight program controls set by New York state “is going to win over physicians” and aid the industry”™s effort to make medical marijuana “more mainstream” in health care.
At its dispensaries, which Vireo Health will also operate in Binghamton, Albany and Queens, “We”™re going to create a socially comfortable feel for patients,” Hoffnung said. The company aims “to transform the culture around this product.”
That product in any form is not covered by health insurers because of marijuana”™s federal status as an illegal drug, Hoffnung said. He said the company is awaiting state Health Department approval of its proposed pricing, which he did not disclose. Low-income New Yorkers will be given discounts on their out-of-pocket purchases, he said.
Hoffnung said Vireo Health has invested “several million dollars” in its Fulton County production facility and additional funds for its dispensaries but would not be more specific about the cost of the startup project.
“It has been a significant investment but we believe that long-term this market has huge economic potential and potential to help New Yorkers,” he said.
