Jake Bergmann is Atlanta’s go-to guy on cannabis investments even though it’s only barely legal there. In 2015, Georgia parents won a hard-fought battle to get extracted high-CBD medicines to epileptic children in the state, but most still don’t have safe access. Although it is now legal for these families to obtain a permit that exempts possession, there is no in-state licensed production, so families must break federal law by smuggling the medicine across state lines.
Bergmann is the CEO and co-founder of Atlanta-based Surterra Holdings, Florida’s most aggressive cannabis license holder. He is frustrated that Georgia’s law only allows patients to illegally import medicine and, citing his “boots-on-the-ground” research in legal states out west, has pushed for in-state production. Bergmann believes the best model to provide the medicine would be one in which only a small handful of companies are awarded potentially lucrative vertically integrated business licenses.
“Florida and New York, for example, are licensing five companies to manufacture cannabis products through state-chartered universities. Connecticut licensed four producers and six retail stores operated by pharmacists. Colorado isn’t the only model, and certainly not the best model, for Georgia,” Bergmann wrote in an op-ed for the Atlanta Journal-Constitution.
Bergmann’s company, Surterra Therapeutics, is partially owned by Denver-based law firm and 2012 Colorado legalization advocate Vicente Sederberg LLC. and Denver-based MJardin, a consulting service working with other Florida license holders. If Surterra is majority-owned by Colorado-based companies that profit directly off recreational marijuana, why is it advocating for laws in the south so strict even patients still don’t have access?
Distinguishing Reality From Reality TV
Compassion for the sick and the prevalence of social media have driven a sea change in public opinion in favor of medical cannabis legalization, but no one entity has had the single impact of Atlanta-based CNN. In 2013, CNN aired its first “Weed” special, a groundbreaking, hour-long documentary hosted by chief medical correspondent Sanjay Gupta.
The special featured the story of Charlotte Figi, a Colorado child suffering from drug-resistant epilepsy. She had been provided with a high-CBD strain of cannabis that was allowing her to experience life for the first time. It was the first time a major news network aired a primetime special legitimizing the medical cannabis movement. The momentum it created was palpable, and desperate parents and patients lined the halls of state capitals demanding they be allowed to try cannabis too.
Legislators were quick to respond to the need for safe access to cannabis medicines, at least the kinds that don’t get patients “high.” But contrary to their stated purpose, state-level regulations have turned out to be nothing more than smart business investments for the politically connected rather than a means of providing relief to patients.
In no other state are the financial motives behind these laws more transparent than in the Sunshine State.
Florida legislators engineered regulations that shut out small and minority-owned businesses, prohibits personal home cultivation and bans access to the raw cannabis plant. Essentially, they created a product-based market with total supply chain control that is great for business but seriously lacking for patients. If a ballot measure to approve a more open medical cannabis program passes in November, these license holders will be the only ones ready to serve the new market for years.
From Big Coke to Big Weed
Vertical integration is the key to supply chain control and no one knows how to play the game better than Atlanta-based Coca-Cola, making former Coke marketing director Susan Driscoll the perfect pick for president of Surterra Holdings. Driscoll is an expert at using heavy publicity as a weapon to gain and maintain market share. She worked in the trenches at Coca-Cola during the height of the cola wars with Pepsi, as the two soda giants traveled the world trying to outbid each other for exclusive territorial rights via money-starved local municipalities.
While it’s apparent Driscoll is an expert in supply chain control and product design, she isn’t quite prepared to deal with the intricacies of cannabis businesses and the line between state and federal laws.
In August, state Sen. Matt Gaetz, the legislation’s biggest champion, made the first cannabis home delivery in northwest Florida to a sick child who had been waiting to try it. The medicine provided for the highly publicized event came directly from Surterra, the first license holder approved to begin growing, harvesting and now selling medical cannabis.
When asked by News-press.com how Surterra obtained marijuana plants to grow, Driscoll responded, “Cannabis is native to the state of Florida.” She went on to say that although Surterra fully supports the medical use of cannabis products, they are “less certain about the merits of legalizing the drug for recreational use.”
Cannabis is not native to the United States. The only way to move Colorado genetics to a Florida garden would be by illegally crossing state lines with plants or seeds.The plants grown by Surterra were likely provided by Denver-based MJardin, a partial owner of Surterra. A partial owner of MJardin, John Fritzel, has a dominating share of the Denver recreational market. MJardin CEO Adam Cohen is one of the five principles of Surterra Florida along with Bergmann and Alex Havenick, a local gambling mogul.
Is Big Business the Enemy of Innovation?
It’s hard to make too much money on legal cannabis, unless regulations favor corporate profits. The current market thrives on genetic diversity, and because it is a plant, humans also have the ability to learn how to grow and process their own.
In states like Colorado and California, where the industry was developed before legalization, the medical market was initially served by thousands of small farms and businesses. The largely unregulated market allowed patients access to a more genetic diversity and a much wider range of product offerings, which led to the discovery of the medical utility of CBD in the first place. If home cultivation is banned and genetic diversity is not allowed to flourish, the true medical potential of this plant may remain largely unknown in favor of publicly traded profiteering.
In today’s political climate, if a cannabis variety is standardized into a single “product” it can work towards FDA approval, a path forged by pharmaceutical companies like GW Pharmaceuticals and Insys, both of which have cannabis-derived or synthesized products in the approval process. Fentanyl maker Insys recently donated half a million dollars to oppose cannabis legalization in Arizona, a transparent move considering the business threat of botanical cannabis to its own synthetic cannabis product offerings.
It would be a smart investor’s strategy to shut out small businesses in order to put in place a system favoring the research and development of for-profit cannabis pharmaceuticals, despite scientific research pointing to botanical plant access as more effective to alleviate human suffering.
Ellen Holland and Jeremy Daw contributed to the reporting of this series.