Cannabis industry is drawing big-name investors in R.I. – The Providence Journal

Thomas M. Ryan, the former CEO of CVS Health, is among a group of prominent Rhode Islanders and others with local roots who are investing in marijuana or its non-intoxicating cousin, hemp.

As one of Rhode Islands big philanthropists, Thomas M. Ryan, the former CEO of CVS Health, has his name on many things.

In September, for example, he gave a gift of $35 million to his alma mater, the University of Rhode Island, where his name is already enshrined in the titles of academic programs and an athletic complex.

These days you can also find his name on documents as an investor in the booming cannabis industry.

He joins a one-time Republican gubernatorial hopeful, the retired CEO of Beacon Mutual Insurance, a Washington lobbyist, a hedge fund manager and some real estate developers not to mention the parents of golfer Brad Faxon as some prominent Rhode Islanders or those with local roots investing today in marijuana or its non-intoxicating cousin, hemp.

Ryan is listed in updated disclosure documents filed with the state on behalf of the Summit Medical Compassion Center, the Warwick medical marijuana dispensary headed by Terence M. Fracassa.

Ryan is a member of a new group of investors affiliated with one of Summits spinoff companies called CanWell. The company specializes in extracting THC from marijuana and using the psychotropic compound in foods, snacks and oils.

CanWell has said in court papers it hopes to become New Englands leader in whats known in the marijuana industry as the alternative dosage market other methods of using marijuana besides smoking.

Besides Ryan, the investment group includes James Rosati, the retired president and CEO of Beacon; James S. Bennett, who ran for governor in 2002 and once headed the Rhode Island Convention Center Authority; and brothers Stephen and Gerald Harrington, a lawyer and Washington lobbyist and Democratic political fundraiser.

Stephen Harrington grew up in Rhode Island, works in the investment field in Philadelphia and summers in Narragansett. He said that many of the investment groups members have known each other for decades and see medical marijuana, in particular, as a worthy investment that can help people in need.

Weve had a family member who had cancer who required chemo [therapy] and relied on medical marijuana, said Harrington. The people we brought together are Rhode Island people. They understand this is a growth industry and they are committed to a best-practices approach.

Bennett, who in 2002 lost in the Republican primary for governor to Donald Carcieri and served as chairman of the state convention center between 2011 and 2015, said he joined the investment group last year.

I have a daughter in the medical marijuana space in Florida who was keeping me up to date on the technology and benefits of it [medical marijuana], so I looked into it.

Bennett, who also served as Providences economic development director under Mayor Angel Taveras, said he was impressed with reports that marijuana could be used to wean people off prescription drugs.

Big tobacco, the pharmaceutical companies, theyll all looking to get in," he said. "It seemed like a good, balanced investment.

The District of Columbia and 11 states Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington have legalized marijuana for recreational use. Thirty-three states, including Rhode Island, have medical marijuana programs.

The Marijuana Business Daily reported this summer that retail sales of medical and recreational cannabis in the United States was on pace to surpass $12 billion by the end of this year, an increase of about 35% over last year, and could rise to more than $30 billion by 2023.

Gerald Harrington founded the Washington lobbying firm Capitol City Group Ltd. in 1999. According to its website, he has been a major fundraiser for the Democratic Senatorial Campaign Committee, the Democratic Congressional Campaign Committee and the Democratic National Committee.

He also raised money for Hillary Clinton's 2008 presidential campaign and served as a consultant for Rhode Island Senators Jack Reed and Sheldon Whitehouse.

The CanWell investment group also includes Joseph Healey, who, like several of its other investors, attended Bishop Hendricken High School in Warwick.

Healey co-founded a $3-billion New York hedge fund known as Healthcor, which for 20 years has invested in pharmaceuticals and medical technology, says its website.

In 2016, The Journal wrote about how Healey hosted a concert by renowned rock star Lenny Kravitz at his Narragansett beach mansion Sandcastle-by-the-Sea. The concert, which marked Healeys 50th birthday, drew hundreds of guests and also raised money for the We Are Family Foundation, formed after the 9/11 terrorist attacks to promote cultural diversity.

Companies looking to expand in the cannabis market face a difficult challenge when raising investment capital.

Because the federal government still considers marijuana illegal, federally insured banks wont lend money to companies like CanWell. Instead, they have to raise private capital.

Some major cannabis companies like Canada-based Acreage Holdings, with business interests in 20 states, have picked up big-name promoters like John Boehner, the former Republican speaker of the House of Representatives, and Bill Weld, a former Republican governor of Massachusetts. Weld ran for vice president on the Libertarian ticket in 2016 and is running for president as a Republican in 2020.

Boehner has tweeted that the federal government needs to reclassify marijuana so more research is allowed on the drug, which could help veterans and possibly lower opioid addiction.

Not all new local investors are big players like the kind CanWell has attracted.

Brad and Eileen Faxon, the parents of the Barrington pro golfer, are also listed in documents filed with the state Department of Business Regulation as having a financial interest in Kelsey Green, a Warwick-based cultivation company yet to be fully licensed to operate, and a new affiliated company, Green Reservoir Inc.

Last month, a lawyer for Green Reservoir threatened Rhode Island marijuana regulators with a lawsuit if the state doesnt begin accepting license applications immediately for six new medical marijuana dispensaries.

Gov. Gina Raimondo has said those lucrative licenses will be chosen through a fair lottery system the process of which is now being drafted in new regulations.

The other branch of the cannabis business hemp growing is also drawing some familiar investors.

Hemp is a cousin of marijuana that produces little or no THC but is rich in cannabinoid (or CBD), now widely used for pain relief and insomnia.

Developer Richard P. Baccari Sr., president of Providence-based Churchill & Banks, incorporated RI Hemp Farm at the end of last year and received a license to grow hemp in April.

Baccari, who was acquitted in 2014 of paying three North Providence Town Council members a bribe as he pursued zoning changes for a supermarket, did not return telephone calls placed to his office.

tmooney@providencejournal.com

(401) 277-7359

On Twitter: @mooneyprojo

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Cannabis industry is drawing big-name investors in R.I. - The Providence Journal