By DENNIS GRUBAUGH
COLLINSVILLE — The long road to medical marijuana sales in Metro East was fraught with legal hurdles, and it could be years before investors in the area’s first dispensary know if they’ve made a wise financial decision.
But operators of HCI Alternatives in Collinsville say the challenges will be worth it, if they find success — and if customers find comfort in their cannabis products. The retail facility debuted Jan. 25 and is open noon to 6 p.m. Monday through Saturday at 1014 Eastport Plaza Drive, next door to the DoubleTree Hotel — and a stone’s throw from the Illinois State Police headquarters.
Reporters were given a sneak preview prior to the opening, after which strict security protocols went into place, limiting access. Although it was in touch with cultivators, HCI was still awaiting its license and could not begin to stock the facility until after a state inspection was conducted, which was a necessity to get the dispensary’s all-important “agent cards.”
HCI purchased a building previously used for state offices and as an Allstate insurance outlet. More than three months of work went into remodeling, much of it for security, said Jay Cook, HCI’s director of community education.
“We spent about $1.6 million before we opened the doors,” he said. HCI, which stands for Health Central Illinois, also owns a dispensary opened earlier in Springfield.
The outlet in Collinsville is the first in Metro East. Another dispensary called The Green Solution is slated to be opened by another company in Sauget.
The store is authorized as part of the Illinois Compassionate Care Act. The state issued 23 dispensary licenses through mid-January but has set a cap of 60 locations statewide in the four-year pilot project. Legal marijuana sales began in Illinois in early November.
Seventeen of the 22 allowed cultivation centers have received state permission to grow medical marijuana indoors, including Progressive Treatment Solutions in East St. Louis.
Customers must have a certified doctor-patient relationship, but doctors are not technically prescribing cannabis, they are only certifying that the patient has one of the 39 conditions authorized by the state.
In Collinsville, customers enter a reception area where they must show their cannabis card and another form of ID. Security will buzz them through or a patient care technician will come out to get them. Entrance to the purchasing and consultation areas is through multiple sally-port doors, each closing before the next opens.
Cook said the technician will explain the difference in the types of cannabis strains available. All of the staff has undergone several hours of training on such subjects as dosing, hybrids and effects of the drug.
Oils would be useful for treating epilepsy, for instance. Smokeable pot would be used for cancer. Vapor cannabis could be used by MS sufferers to prevent muscle spasms.
“It’s pretty much up to the patient what they like,” Cook said. “If they want to smoke they can. If they want to vape because they don’t like the irritation that can be caused by smoking, they can. We can show them the different avenues of ingestion before they leave. We want them to be comfortable.”
The business is starting off with eight to 12 employees and projects that it could have up to 25 or 30 FTEs by the end of 2017. Now, the staff consists of an agent in charge; a medical director (not a doctor); a registered nurse; a registered pharmacist; patient care techs; and security.
HCI representatives visited multiple dispensaries in Colorado to see what they liked and didn’t. Colorado, which also allows recreational marijuana use, has a much more laid-back environment. Some dispensaries are run from homes.
“Out there, they’re more of a store. We’re more of a health clinic, putting the patients first,” Cook said.
Education is a big part of the process, and HCI will talk to doctors as needed to “see that we’re doing the right thing for their patients,” Cook said. “If doctors don’t know how the program works, they are not going to reinforce it.”
HCI already had established ties with licensed cultivators so cannabis was ready to go soon after authorization was granted in Collinsville. One of its suppliers is an operation in Carbondale. HCI and other retailers must deal only with licensed Illinois cultivators.
Materials are scanned into the inventory and kept in a temperature-controlled vault. Each day they are moved between display and vault, where the product is scanned again to account for sold products. A special vault-within-the-vault is used to hold cannabis that must be destroyed because of bad packaging or outdated products.
“We can only keep a product for six months,” Cook said. “Then, we have to dispose of it on-site. We have to mix it with equal parts soil with no fertilizing in it. We mix it in a blender and dispose of it in trash.”
The regulations they have had to go through “seemed almost insurmountable at times. But we get it, these are the rules,” he said.
Cost of product depends on what is being received from the cultivation outlets.
“An ounce of medical marijuana is probably anywhere from $390 to $450,” Cook said. “This is a pilot program and we have to get our costs back. If it continues, and we can pay off the building, the (patient) cost will probably come down. We’ve seen that in other states, too.”
One person can buy no more than 2.5 ounces during a two-week time frame, according to state law.
The sales area is lined with cases containing a variety of products — among them smokeables, concentrates, cough drops, lotions and creams. A refrigerated case holds medically infused items such as chocolates, cookies and brownies.
During a tour, Cook pointed to highlights the public would find interesting. Surveillance cameras, for instance, take in virtually every inch of counter space to protect against theft. An ATM is prominently displayed.
Transactions are conducted either in cash or by a PIN debit card. Banks in some states have balked at becoming involved in cannabis business, but HCI has not had a problem.
“We work with BoS (Bank of Springfield). They’ve been very good to us. I think we’ll make it really comfortable and easy for patients,” Cook said. “If they don’t want to carry cash with them, they can use the ATM or debit card.”
HCI Chief Executive Officer Chris Stone, who was a lobbyist by trade, got involved in the subject when medical marijuana was first being contemplated for regulation by the state.
“About five years ago a company that I represent asked me to do research and analysis on medical marijuana and transportation, maybe creating a three-tier (distribution) system like they do alcohol. We went to a bunch of states and took a look at it.” They abandoned the idea after they sensed it might jeopardize bank relationships
“But in the process of doing it, I looked at the analysis and decided this is actually a pretty cool industry,” Stone said. He talked to other people he had done business with and jointly they went after both cultivation and dispensing licenses.
“We were able to get two dispensary licenses, but we weren’t able to get a cultivation license. Hopefully down the road there’s an opportunity,” Stone said.
HCI is owned by a group of 12 Illinois investors from Illinois.
Asked if the investors had a timeline in mind for a payback on the business, Stone said, “I would say that a lot of our return on investment is going to be dictated by our cultivation partners. They put in a significant amount more money than we did. It’s going to be primarily dictated by what their pricing is. Hopefully, the payback for us is there in two or three years.”
Stone said he had a lot of skeptics in the early going, but fewer now.
“A lot of people I know that I consider fairly conservative say, ‘Why isn’t it just legal?’ Every year that goes by, the stigma gets less and less. It’s an evolution of sorts. We’ve gone from late ’70s and early ’80s and ‘no, no, no’ to research on medical benefits,” Stone said. “If we had just decided in 1970 not to make this a Schedule I (controlled substance) and kept it as a Schedule II, we could have done a whole bunch of clinical research on this and figured out there is a huge amount of benefit to having this organic product extracted and made into viable medical products.”
More information on HCI can be found at https://www.hcillinois.com/