Taos-based cannabis producer continues greenhouse construction

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Southwest Wellness Center, the only legal medical cannabis grower in Taos, is set to open a storefront dispensary in early 2017. The nonprofit is in the process of building out a series of outdoor greenhouses to complement an indoor growing operation.

The facility includes a 6,000-square foot building that sits on two acres purchased from the Taos County Economic Development Corp. (TCEDC) on Salazar Road between Bertha Street and Paseo del Cañon West.

Southwest Wellness Center (SWC) executives denied multiple interview requests from The Taos News.

However, the New Mexico Department of Health (DOH) — the state agency in charge of managing both patients and producers in the medical cannabis program — confirmed that SWC is sanctioned to grow three times the number of plants than requested in the nonprofit’s 2015 application.

Patient need

Ensuring that patients’ needs are met by New Mexico’s licensed nonprofit producer (LNPP) system — the primary source of medical cannabis around the state, along with personal production — has always been a balancing act between supply and demand. The scales have usually tipped toward demand.

A 2013 DOH survey found that the 23 nonprofit producers at the time were able to satisfy less than one-fifth of patients’ needs across the state.

Furthermore, the program has seen explosive growth in the last year. From June 2015 to June 2016, the medical cannabis program grew from 15,226 patients to 26,586. In the last five months, another 6,000 patients have been added to the program.

Taos now has 1,088 medical cannabis patients enrolled with the state.

Longterm shortages, coupled with an increase in patients, prompted the state to issue a new round of licenses, the first time since the program’s inception. After 86 groups threw their name (and $10,000 application) in the hat, 12 new LNPPs were approved in 2015.

SWC was among the recipients of a cannabis production license. (The application for a separate group of Taos residents was denied, sparking outrage over the obscured process the state used to determine which groups would ultimately receive a license).

While Taos already had a storefront cannabis pharmacy — operated by New MexiCann Natural Medicine and stocked with product grown in Santa Fe— SWC represents the first and only source of legal medical cannabis grown in Taos.

Production

The SWC facility started with approximately 2-acres of land purchased from the TCEDC, including a 6,000 square-foot building. Taos Integrated School for the Arts, or TISA, (one of six charter schools in Taos) maintained a satellite campus at the TCEDC. But when they vacated that space, it was left open for cannabis development.

The SWC complex currently includes the former TCEDC building, two banks of greenhouses that are completed and another bank of greenhouses that are in construction.

SWC initially applied to grow 150 plants — the maximum at the time the application was submitted.

However, the state allowed SWC to increase its number of plants to 450 (the current maximum) when SWC renewed its license in 2016.

Only 24 LNPPs are authorized to grow up to 450 plants. Across New Mexico, LNPPs are authorized to grow a total of 13,800 plants.

The nonprofit developed a growing schedule that was designed to yield a harvest of 16 plants every two weeks, resulting in about 260 pounds of useable cannabis a year, according to the application. However, that capacity could potentially be tripled under the current plant count.

Cannabis produced by SWC is grown using a system similar to pure hydroponics, but with the addition of perlite and peat moss. And water is provided by a well at the TCEDC campus, according to the application.

The first six to eight months of production was meant to focus on “dialing in” the specifics around cultivation procedures and the growing environment. The initial portfolio of cannabis strains — including Blue Dream, OG Kush and Sour Diesel — was to be started with seeds, while subsequent “cohorts” of cannabis plants were to be taken from cuttings.

Depending on patient need and demand, potentially up to 35 percent of each harvest is to be used in the making of edibles and other non-smokable cannabis products.

Governance, financing

SWC is run by an “actively engaged board of directors” that includes Robert Clint Crawford, Jeraldine Crawford, Natalie Ann Anderson, dermatologist Marshall Reich and former town of Taos mayor Darren Cordova.

Clint Crawford, who also acts as executive director of SWC, graduated from the University of Texas at Arlington in 1989 and was a longtime administrator for Southwest Airlines, according to records filed with the DOH.

The board is meant to oversee the nonprofit’s financial arrangements as well as the development of production and distribution operations.

The Taos-based cannabis producer is backed financially by Elkhorn Ventures, a “personal investment vehicle” of the nonprofit’s executives, according to the application.

The Crawfords each have a 25 percent stake in Elkhorn Ventures, while Charles Crawford (brother of Clint Crawford) has a 50 percent stake, according to the application.

Elkhorn Ventures was organized in Mach 2015, about the same time the nonprofit was formed, in order to allow the producers to purchase property and equipment and build out its infrastructure. The nonprofit leases the property from Elkhorn Ventures.

According to the business plan included in the application, the “master grower” in charge of production is set to receive an annual salary of $40,000, with management collectively receiving $120,000 a year.

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