EDITOR’S NOTE: NJ Cannabis Insider is hosting an in-person day-long conference and networking event Sept. 15 at the Carteret Performing Arts Center, featuring many of the state’s leading power players. Early-bird tickets now on sale.
The medical marijuana storefront was supposed to start doing business last year, the second of two dueling medical dispensaries in Atlantic City.
But MPX NJ’s “Be” hasn’t opened its doors off the Boardwalk as planned.
The company’s relationship with its investor iAnthus has soured, and some former leaders at MPX NJ are out. The two companies have argued over which has rights to build out the property and are wrestling now for control over the license. It’s one of only 12 the state has awarded.
As the property languishes, New Jersey’s 113,000 medical marijuana patients struggle to find affordable and accessible cannabis. Many have reported long lines and commutes only to encounter product shortages.
Former MPX owner and iAnthus employee Julie Winter alleges iAnthus pushed out MPX’s diverse leadership and also misled state officials about its progress in opening, according to correspondence sent to the state Department of Health and the chair of Cannabis Regulatory Commission obtained by NJ Advance Media.
MPX NJ won a coveted vertically integrated license — which allows it to grow, process and dispense marijuana — in 2018. But it is one of just two companies from that licensing round that has not opened a dispensary yet.
It planned to cultivate cannabis in Pleasantville and dispense it near the Boardwalk, and boasted a local, women-led team headed by Beth Stavola, who is Winter’s sister.
But Winter alleges in the letter that it was not on track.
“I know that we had every intention of delivering everything we proposed in our application and have been held back and controlled from doing so by iAnthus,” she wrote in a November letter to Jeff Brown, executive director of the cannabis commission who was then head of the medical marijuana program under the health department.
iAnthus and MPX NJ have several entanglements. Stavola worked for iAnthus at one point but has resigned. She remains CEO and majority owner of MPX NJ. The companies also entered into a master services agreement that would over time move ownership from MPX NJ to iAnthus.
The license holder has since claimed iAnthus tried to hijack its operations after investing $10 million. In a lawsuit late last year, MPX NJ accused iAnthus of attempting to negotiate deals with state and local officials and undertake unauthorized construction at the cultivation facility.
Winter says in her letter she moved from MPX to an iAnthus position in late 2019 after she was pressured to abandon her ownership role. She alleges the same thing happened to another member of MPX, Shelby Brown. Having diverse leadership earned MPX points in the licensing round, and then iAnthus exploited that by taking control, Winter argues.
Shelby Brown said he was moved from a national position to a state one and confirmed several issues raised in Winter’s letter. An African-American disabled veteran, Brown previously worked as an investigator for the Maryland Medical Cannabis Commission.
“The fact that this company comes and they put white men in place without the level of experience, it doesn’t make sense,” he said. “I would love to see the true essence of this application to go through: minority-owned, women-led. It’s very impactful, because those are the people who are going to do right for the state and the patients.”
Winter also called plans presented to the health department “smoke and mirrors,” and accused the company of prioritizing money for an Arizona dispensary over its obligation to New Jersey patients.
Stavola did not weigh in on the allegations.
“Unfortunately, I am bound to be silent on this subject due to an agreement I had to sign with iAnthus,” she said in an emailed statement.
iAnthus denies Winter’s allegations. Randy Maslow, the president and interim CEO, called them “inaccurate, deliberately false and frankly defamatory” in a statement.
“Patients around the state have already seen far too many roadblocks denying access to this life changing and therapeutic plant,” Maslow said. “It’s a disgrace that this outlandish and financially motivated letter might be just another obstacle to opening the medical cannabis facilities in Atlantic City and throughout the state.”
iAnthus said in a statement that 72% of the senior management roles are held by women companywide, and three of the five proposed managers of the New Jersey team are women.
It also said it plans to open the completed Atlantic City dispensary once it closes its acquisition of MPX NJ and takes control of the license upon state approval. It has two other dispensaries planned for Gloucester Township and Pennsauken.
iAnthus defended its acquisition of MPX NJ, arguing that MPX members signed agreements that gave it the right to own MPX in return for capital and expertise.
MPX NJ has run into trouble from its beginning. The health department granted it a license despite its close proximity to a dispensary run by Compassionate Care Foundation, which led to a lawsuit. Other rejected license applicants took issue with the overall scoring of the six winners also filed a lawsuit.
The company prevailed through both and held onto its license.
The complaints from Winter don’t seem to be moving the cannabis commission.
In a July 9 letter, commission chair Dianna Houenou said the panel “will not consider matters that fall outside of its jurisdiction” and called the issues “internal disputes between MPX and iAnthus employees and/or officers.”
Toni-Anne Blake, spokeswoman for the commission, declined to comment for this story but did confirm MPX NJ still holds the license.
The cannabis commission is currently drafting rules and regulations for the legal weed market. Many are calling for the panel to create pathways for diverse ownership in an industry that is largely controlled by wealthy white men.
Among the former MPX members, there’s hope that bringing light to the underlying issues will halt the transfer and push the dispensary to open.
“We’re just trying to get the agency, the DOH and the CRC, to do what I think its job is: Get medical marijuana to patients that need it now,” Smith said in a phone interview. “And get legal marijuana to the people who voted for it overwhelmingly. Do it under the principles that you promised: locally owned, minority-represented businesses.”
A version of this story first appeared in NJ Cannabis Insider. This version has been updated with comment from iAnthus.
Amanda Hoover may be reached at ahoover@njadvancemedia.com. Follow her on Twitter @amandahoovernj.
