Lyons: pain clinic owner makes case for pot

When over-the-counter painkillers don’t work, Paul Sloan’s clinic prescribes addictive opioids. Marijuana, Sloan says, could help.

Paul Sloan’s crusade has him paying for billboards and writing letters to the editor, hoping there is time to overcome what he sees as a misguided but effective disinformation campaign.

Big names in law enforcement statewide are deeply involved, and not on his side.

What cause has him so willing to reach into his wallet?

Well, Sloan is a local pain clinic owner who helped lobby for and crafted clinic regulations. But, the odd thing is, he isn’t thrilled with the drugs prescribed at his business., and he does not mind saying so.

Doctors at his clinic frequently prescribe an addictive and hazardous array of drugs called opioids, such as oxycodone and its cousins.

Sloan says he much wishes patients could use a lot less of those addictive drugs.

“What this stuff is doing to people is terrible,” Sloan told me. “It changes them.”

They are a necessary evil, to some extent. Patients who need the drugs deal with such severe pain that life is misery whenever something blocks that source of relief. Sloan has argued in the past that federal drug agents aiming to prevent abuse of those drugs have been overzealous in restricting supplies to pharmacies, which has caused shortages that make legitimate pain patients do without.

But at least he knows those policing efforts are based on a rational concern: Recreational users want these drugs, too, and many become fiercely addicted. So do many legitimate users.

That harsh reality has him crusading again, but not for easier access to opioids. Now he is paying for billboards that urge people to vote yes on Amendment 2, the proposal to legalize medical use of marijuana with a doctor’s prescription.

Sloan says he doesn’t want to get into the marijuana business. He has no plans to run a dispensary. But he would be thrilled to see his clinic writing prescriptions for marijuana. He is convinced it is far safer and far less addictive that what his clinic is prescribing now.

Research indicates marijuana or cannabis extracts can help some pain patients use dramatically less of the truly dangerous and addictive opioids they get now. Some probably won’t need opioids at all, he believes.

That doesn’t mean his billboards are a good financial investment. Though he much wants Amendment 2 to pass, he says he has no idea if that will help or hurt his bottom line. Family doctors would be able to prescribe marijuana if the amendment passes, so his campaign isn’t a scheme to drum up business for pain clinics, Sloan says.

“But I’d sleep a lot better,” Sloan said. As is, after Tylenol and the like have failed, there is no good in-between medicine that doctors can try when treating severe pain.

It is just insane, he says, that anyone who accepts and understands the need for opioid prescriptions could even consider voting to reject medicinal marijuana. The dangers of marijuana — even the most questionable, hyped-up, probably fictional ones — pale in comparison to the dangers of opioids.

Sheriffs statewide insist they know otherwise, thanks to long experience busting people who use marijuana for fun.

That is indeed a long history, but the experience seems irrelevant to me.

Yet they and others in the well-funded anti-medical marijuana campaign have made a dent. Though polls once showed the proposal as likely to pass, recent ones show support may have slipped to below the 60 percent needed to approve the amendment.

I share Sloan’s hope that Amendment 2 will pass. Banning medical marijuana while opiods are being prescribed seems like deciding a butter knife is too dangerous but a chain saw is OK.

But I’m not qualified to give medical advice. For that, you should probably go to your sheriff.


New banking rules create tough barriers for state’s growing medical pot businesses

For the first time since opening his medical cannabis business, Len Goodman feels like a drug dealer.

Goodman and his wife, Susan, are owners of NewMexiCann, a state-licensed provider of medical marijuana to some 1,300 customers. With one location in Santa Fe, they soon hope to expand here and open a shop in Taos. But as of this week, they have no bank to service their business or their customers.

Len Goodman said his patrons cannot use credit cards, so they must pay with cash or a check. His 23 employees are paid with dollar bills stuffed in envelopes, and he has to shuffle money off-site several times a day to seven different safes at undisclosed locations. All vendors — such as a janitorial service — have been pre-paid until the end of the year.


“About a month ago, they decided to shut down all the cannabis accounts. They said, ‘You have two weeks. We’re cutting you a check. Goodbye,” said Goodman of his longtime financial institution, the State Employees Credit Union.

He went to the credit union and retrieved a cashier’s check, with his business deposits totaling $400,000.

At a time when there are more and more medical cannabis providers, there is also increasing uncertainty over U.S. banking regulations for the industry, which has made businesses hypersensitive about security and has imposed more barriers for patients.

There are 13,000 registered medical cannabis users in New Mexico and 23 producers. Albuquerque attorney Jason Marks said at least half of them are having issues with banking.

“There are patients who are not able to purchase with a credit card — it’s a huge problem for patients who need courier service,” Marks said. “There are security risks. All these are problems nobody wants to see happen. We have a small crisis on our hands.”

Marks, who represents 18 growers in the trade association, Cannabis Producers of New Mexico, is working to educate New Mexico banks about the new regulations and hopes the situation can be resolved in the coming months with one of them moving to accept deposits. The U.S. Congress also is moving to clarify some of the regulations, which are impacting the industry in other states, but Marks doesn’t expect that relief to come soon.

Duane Herrera, executive vice president of the State Employees Credit Union, used to handle accounts for Goodman and other providers. “We were happy to have those accounts,” he said.

What changed were new clarifications from the Financial Crimes Enforcement Network, a branch of the U.S. Treasury Department, that beefed up bank reporting requirements after the Sept. 11, 2001, terrorist attacks to curb money laundering.

He said credit unions are not set up as commercial banks, and his does not have the staff needed to provide the due diligence to comply with the investigative and paperwork edicts.

“I feel bad for them,” Herrera said. “The law was passed in New Mexico, and it is legal to have a medical marijuana business in the state, but they’ve made it really difficult to handle the banking. We just couldn’t do it.”

The initial policy was issued in February 2014 and known as the Cole Memo, for Deputy U.S. Attorney General James Cole, who reiterated the federal government’s position that “marijuana is a dangerous drug and that illegal distribution and sale of marijuana is a serious crime that provides a significant source of revenue to large-scale criminal enterprises, gangs and cartels.”

As part of that enforcement — and other issues related to money laundering, where money is raised through illegal activity and then washed through legitimate businesses — the government requires banks to submit Suspicious Activity Reports for depositors making unusually large cash deposits or rotating money through several accounts.

But the Treasury Department, in clarifying the rules for cannabis businesses, went further than saying banks must just file the paperwork. It also required them to verify it and “develop an understanding of the normal and expected activity for the business, including the types of products to be sold and the type of customers to be served,” according to the rules.

The rules also say institutions should submit a report when “the business receives substantially more revenue than its local competitors.” There are other requirements as well, including the need to reverify information on a regular basis.

Federal regulators have said the policies are meant to give financial institutions more comfort in servicing the cannabis accounts and to move the business out of the shadows and into mainstream banking.

But it isn’t working that way in all cases, according to one report.

“The Financial Crimes Enforcement Network (FinCEN) attempted to clear the air, issuing guidance in February that tacitly acknowledged the legality of banking marijuana,” according to an article by Brian Kindle published in August by the Association of Certified Financial Crime Specialists. But “several months later, the effect of that guidance remains hazy. Comments by FinCEN Director Jennifer Shasky Calvery indicate that while a small handful of institutions are providing services to the legal marijuana industry, many others have terminated relationships with customers tied to the marijuana trade.”

Kindle wrote that “anecdotal evidence suggests that a growing number of marijuana businesses, particularly in Colorado and Washington, are running funds through personal accounts or simply accumulating ever-increasing piles of unbankable cash.”

Attorney Marks thinks that larger states with multinational companies and more commercial banks are handling the issue better than New Mexico.

“If we had more banking options, we wouldn’t be in quite the corner,” Marks said.

Len Goodman said there is an extensive questionnaire in Oregon for growers who want to use banking services there. He is taking that form to New Mexico lenders to show them how others are navigating the reporting requirements, but he has not yet received a firm commitment from any of them. In Washington, the state regulators got involved in lobbying local banks to accommodate the industry.

The issue has even frustrated related businesses, such as one owned by Robert Davis, founder of Peace Medical Marijuana Consultants in Albuquerque.

Davis contracts with therapists and medical providers who can advise patients on the state Department of Health program, which is open to those with any of 16 qualifying medical conditions, including cancer, AIDS, chronic pain, post-traumatic stress disorder and epilepsy. He then helps them make their application to the state, which must verify the paperwork and documentation.

“We help patients gather medical records and answer a lot of questions,” Davis said.

Davis started the work when his mother was diagnosed with AIDS and he learned how difficult the application process is. He has an office in Albuquerque and is now expanding to Las Cruces. He doesn’t sell cannabis directly to patients but is still stigmatized as a business owner.


“I hired a company to do our payroll and signed all the paperwork, and as soon as it hit the upper levels, I never got a call back,” he said. “It’s a pain in the ass. We’ve been a legal business for seven years,” he said.

He pays his two employees in cash and has a limited checking account, which is set up under the name “Peace MMC.”

Goodman is the former owner of a tile company in Santa Fe and a part-time business consultant. He and his wife have 23 employees and paid the state of New Mexico $175,000 in gross receipts taxes last year, which must be sent in quarterly. They also withhold IRS and Medicaid tax for those on their payroll.

Susan Goodman said most of their obligations were pre-paid before the credit union account was closed. But the clock is ticking, and they need to find a resolution before January. “Everything I know we owed I pre-paid to January,” she said. “I even pre-paid our cleaning service until the end of the year.”

The providers are more concerned about the impact to customers — one-third of whom used to pay with a credit cards online and ordered products through a courier service. Many of those patients, such as those in hospice care or in rural areas, can’t come into the retail shop off San Mateo Road. For security reasons, the business was originally set up to be as electronic-payment friendly as possible.

“Now you have to send us a check or money order,” Len Goodman said. “A lot of those people we won’t see again.”

In a recent newsletter to patients, Goodman writes, “Many of our patients have expressed real concern for our safety at NewMexiCann now that we can only take cash. Thank you all for your concern. We have set up procedures that limit the likelihood of exposure due to our cash on hand.

“We have made arrangements for our cash and deposits to be removed from our premises daily. It is now moved by courier daily to an off-site secure lockup location. … This will help a great deal to insure the safety of our patients and staff.”

Goodman is hoping to expand his business next year, when the state approves an increase in production for each licensed grower, but that will be more difficult without banking services.

Marks said the industry is young and growing and doesn’t have problems with toxic real estate assets or a declining customer base.

“This is such a regulated area, you’re not going to have those problems,” Marks said. “I think the banks that take this on will be happy to have the New Mexico cannabis producers as customers, and all the other banks will be sorry.”

Goodman estimates the producers in New Mexico will generate $20 million in sales this year.

“It’s a lot of money, and it’s all going to go to one bank — if they want it,” he said.



County council temporarily halts new pot businesses in some rural areas

EVERETT — The Snohomish County Council on Wednesday temporarily halted new state-licensed marijuana businesses in some of the county’s rural areas.

The council’s emergency ordinance also puts a six-month pause on new growing, processing or retail outfits along a mile-long stretch of Highway 9 in Clearview. It applies to businesses seeking to operate under the state’s Initiative 502 rules for recreational pot.

The action followed a similar emergency ordinance the council enacted Monday that applied only to medical marijuana businesses in Clearview.

Both measures passed 5-0.

“It would give us a time out, some breathing room to consider these issues thoughtfully,” Council Chairman Dave Somers said.

More than 20 people, representing both sides of the issue, commented for more than an hour and a half during council’s hearing Wednesday.

Some Clearview residents have mounted strong opposition to a proliferation of marijuana businesses in their semi-rural neighborhood.

Pot entrepreneurs, meanwhile, have appealed to the council to respect their right to open businesses they had pursued under land-use regulations the council adopted last year.

The county’s planning department, as of this week, had commented on 131 applications for pot businesses to the state Liquor Control Board. Just five were from potential retail outlets, the rest from people hoping to cultivate or process cannabis crops.

Of the applications, 88 were in the R-5 zones and Clearview rural commercial area affected by council’s action on Wednesday. R-5 zones are rural areas where the county generally allows just one house per five acres, with some leeway for business activities. The Clearview commercial area stretches along a mile of Highway 9 and covers about 116 acres.

Under state law, the council must schedule a public hearing on any new development regulations approved without full vetting by the county planning commission.

Hearings on both emergency ordinances are scheduled at 10:30 a.m. Oct. 29.

The planning commission, meanwhile, is considering permanent regulations for marijuana businesses. An important aspect of any regulations is how they address the three-tiered licensing scale for different sizes of pot producers.

Commissioners are expected to hold their own hearings on proposed rules and to present recommendations to the County Council within the next six months, before the emergency measures expire.