Eric Hauser
Most new businesses face big obstacles getting off the ground.
There are issues involving financing, location, products, leasing, taxes, regulations—among others.
For Pennsylvania’s medical marijuana companies, you can double those challenges—maybe triple them.
Indeed, anyone who thought that this business would be a golden ticket should speak to Eric Hauser, president of Carlisle-based Organic Remedies.
“It was kind of like block and tackle, honestly. Every day, it was something,” he said. “It was like 12-to-15-hour days almost every day of the week to get this thing off the ground.”
Hauser became interested in the emerging industry a decade or so back. By trade, he’s a pharmacist and spent many years at Rite Aid, rising through the corporate ranks to eventually land in pharmacy operations.
On a trip out west, his curiosity led him to visit several facilities in California and Oregon, where medical marijuana had been legalized.
“It was something that intrigued me—is this real? What is it?” he said. “I had no experience with marijuana before, like zero, prior to all this.”
At the dispensaries, he found people who were eager to share their knowledge and experience: the products they had, the conditions they treated, how they operated.
Around the same time, Pennsylvania was in the process of legalizing cannabis for medicinal purposes, which it did in 2016, following years of grassroots advocacy and lobbying.
“I thought that Pennsylvania would be like the 50th state to legalize the program,” Hauser said. “But they did, and I started reading about it and thought, ‘Maybe this is something I could get behind.’ But first I need to know more about it.”
So, he set out west again, this time to Oakland, Calif., to a conference sponsored by the National Cannabis Industry Association. His plan—pick brains and vacuum up as much knowledge as he could.
There, he struck up a conversation with two other attendees, Mark Toigo and Ryan Simpson, who, by coincidence, were also from central PA. Toigo and Simpson operated Carlisle-based Toigo Farms, which then was the largest organic tomato greenhouse in North America.
Like Hauser, Simpson and Toigo—along with Toigo’s wife, Jaime—had conducted research into medical marijuana and became intrigued by Pennsylvania’s nascent movement, both as a treatment and as a business. Soon, the partners joined forces to found Organic Remedies.
“We just talked and said, ‘Maybe we should try this together. What the heck?’” Hauser said. “So, that’s what we ended up doing.”
As they moved forward, challenges mounted. The state Department of Health implemented a rigorous application and review process for potential licensees. Meanwhile, medical marijuana, though legalized by the state, remained a “Schedule 1” substance federally. This presented many legal, insurance and financial issues that most new businesses do not face.
For instance, Organic Remedies found itself shut out from bank financing, so had to turn to venture capital, a more expensive alternative. In addition, dispensaries can’t take credit cards—they’re an all-cash business—and health insurers don’t cover treatment. The founders also needed to find a bank willing to work with them, given their unconventional needs and the extra, costly compliance requirements.
“Banks are allowed to work with us—they’re not prohibited,” Hauser said. “However, there’s a lot of red tape that they have to endure.”
The Best
In the end, Organic Remedies applied for two licenses—a dispensary permit and a grower/processor permit.
The state health department awarded the company the former, allowing it to open its flagship Enola store on Feb. 15, 2018, the first day of legal medical marijuana sales in Pennsylvania. Locations in York and Chambersburg soon followed and, today, Organic Remedies operates six dispensaries, including, most recently, in Philadelphia and Pittsburgh.
In PA, medical marijuana is authorized to treat 24 different conditions. According to Hauser, pain treatment makes up about 80% of patient visits, followed by anxiety disorders and then “everything else.”
So, what should a patient expect upon first walking into an Organic Remedies dispensary?
First of all, they need two things: a doctor’s referral and an appointment. The doctor’s referral will qualify a patient for a state issued medical marijuana card. The appointment is necessary because a pharmacist meets with all new patients, Hauser said.
“We go, A to Z, through that patient’s medical history, their other prescription meds, their goals of treatment, their history with marijuana,” he said. “You’re going to spend more time with me as your pharmacist today than you have your whole life with your pharmacist at the retail store down the street.”
The company since has obtained its grower/processor permit and now operates a 250,000-square-foot facility in Carlisle. So, today, it’s a vertically integrated operation—one of the few companies in the commonwealth managing the process from plant to product. In addition, it wholesales its finished products, which includes oils, cartridges, tinctures, concentrates, tablets and capsules, to most of the 175 dispensaries in the state.
It also has partnered with the Philadelphia College of Osteopathic Medicine for research. One current study is tracking the quality of life of 462 patients new to medical marijuana.
“Right now, it’s mostly data collection based on patient feedback after initiating treatment,” Hauser said. “We have other studies: one focused on autism, one focused on chronic pain, chronic pain patients who also have opioid use disorder.”
Armed with more research and data, Hauser hopes that greater acceptance follows, including on the federal level. He’d like those barriers to come down so that Organic Remedies can operate like any other legal business in PA—taking credit cards, getting bank loans, accepting health insurance.
Then, down the road, if more licenses come available, they’ll consider what to do next.
“We never wanted to be big. That was never something that was a goal or in our mission statement,” Hauser said. “We wanted to be the best.”
For more information about Organic Remedies, visit www.organicremediespa.com.
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