Q&A: Empire State Health Solutions Paves The Way For Medical Marijuana

Medical marijuana has been on the minds of New Yorkers since Colorado progressively paved the way for the drug to be legally manufactured and distributed in dispensaries across the state. Governor Andrew Cuomo signed New York’s Compassionate Care Act into law on July 5, 2014, and now, Empire State Health Solutions (ESHS) finds itself just months away from opening its first dispensary here in Westchester. The ESHS has ambitious plans to define the industry in New York State, as well as redefine it internationally. The company’s CEO, Kyle Kingsley, MD, sat down with us to clear the air and discuss expectations for his company’s foray into one of New York’s most buzzed-about new industries.

How did you get into the medical marijuana industry?

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I’m a board-certified emergency medicine physician. Our medical director, Dr. Laura Bultman, and myself had similar experiences in the emergency department with  patients who had remarkable results using cannabis instead of traditional pain meds. That got me thinking, maybe there is an opportunity here. So we put together what we thought was the best application [for a license to distribute medical cannabis] for our sister company, Minnesota Medical Solutions. And we won in Minnesota. 

What’s the time frame for bringing medical cannabis to patients here in Westchester?  

January 5, 2016, is the first date we can get these medications to Westchester patients. They have to go through the process of meeting with their physician first, then the physician has to make a specific recommendation as far as what kind of medicine, and then they can come to our dispensaries.  

What can people expect from the White Plains dispensary?

It’s on the 200 block of East Post Road. It’s going to be a top-end, really beautiful medical clinic. We like big, open spaces; we want it to be a comforting place for patients. And there will be some private areas for patient consultation. 

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The only approved forms of cannabis in New York are oral capsules and liquids. How do you take a plant and turn it into a pill? 

Essentially, the plant will grow for three to four months, at which point you harvest the bud material. Then, it’s dried and ground up into a fine powder. We use supercritical CO2 extraction to take out the meaningful compounds, like THC (which is what makes you high). The other one is cannabidiol, or CBD, which is very good for treating seizures in children. So, we take those components, then we formulate very precisely the active ingredients. 

Does ESHS being a physician-led company give it increased legitimacy in this new field?

It does. We have three physicians who are going to be intimately involved with ESHS: Dr. Stephen Dahmer is our chief medical officer for Burroughs; Dr. Laura Bultman is the chief medical officer at Vireo (Vireo Health is our parent company). And then I’m the CEO. All three of us will be intimately involved.

This is a new, untested, untapped market in New York. What does that mean on the business side? 

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With our experience in Minnesota, we are confident that we will do things in an efficient way. Developing scientific methods is so expensive, so to have that done already and take what the scientists did and just execute here, that’s a big advantage. We will spend a small fraction on implementation compared to what we did in Minnesota.   

One of the things that is interesting about New York’s seed-to-sale model, though, is that [all of the manufacturers] have to build this whole business—grow the product, extract the product, transport the product, retail the product. Usually when somebody is an entrepreneur, they do just one part of the business. Here, it’s literally doing it from the ground up, every phase. And the good thing about that is it keeps [the product] in one corporate entity from the time it goes into the ground to the time it is dispensed. 

Cannabis is federally illegal. How are you working with banks, so you are not a cash-only business?

We have a partnership with a national bank, and we have several well-developed relationships here in New York that we will have banking support from. We are not using credit cards—Visa and MasterCard are not on-board yet [with medical cannabis]—and so it is a lot of cash. Our goal is to get Visa and MasterCard to sign up, not to try to skirt around their policies. We operate [under the mindset] that we are not doing anything wrong and that it’s the current federal environment and the current banking environment that need to change.

There will be five companies operating dispensaries across New York State, two here in Westchester. Is there enough demand? 

Yes, there is. In Minnesota, we had two manufacturers. So if you look at it per capita, there’s 1.7 times the number of people per manufacturer here in New York. For a smaller program starting like this, five is the right number. By starting with a more limited number of manufacturers, New York State will be able to control this very effectively and make sure the quality of medicine remains the same.

Dr. Kyle Kingsley, MD, CEO, Empire State Health Solutions

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