Austin's First Cannabis Oil Dispensary Is Ready to Grow

Katie Graham with her son Elliot (Photo by John Anderson)

Austin mother Katie Graham plays a delicate balancing act. Her 7-year-old son Elliot struggles with a severe form of epilepsy, known as Lennox-Gastaut syndrome. He's tried various medications, including drug trials, over the years to quell its symptoms. "It's like having lightning storms in your brain several times a day," Graham said of her youngest son's disorder. "It's been devastating for his cognitive development."

With few language and interactive skills, Elliot, who's also diagnosed with autism, has recently begun to incur insomnia and digestive problems, possibly a reaction to the handful of new drugs. Graham stresses how tricky it is to ensure that Elliot's medicine helps reduce his seizure episodes without inflicting harmful side effects. "There's a honeymoon period where the medicine will control seizures but after a while, it stops working," she said. "It's a frustrating journey full of progress and regression."

After watching the CNN documentary "Weed," in which a young girl in Colorado with rare and severe epilepsy came back from the brink of death with the aid of medicinal marijuana, a stunned and eager Graham considered moving her family to Colorado. But a new medicine was in the process of providing interim relief, so the family stayed put and hoped that one day deeply conservative Texas would see the light. Thankfully for Elliot and the estimated 150,000 Texans with intractable epilepsy, the Texas Legislature in 2015 passed the Compassionate Use Act, a law that legalizes the use of a strain of low levels of tetrahydrocannabinol (THC) and high cannabidiol (CBD) medicinal cannabis for patients with epilepsy uncontrolled by pharmaceuticals who receive a recommendation from their physician. Meaning Graham not only doesn't have to leave her Hyde Park home and move out west, but can now access the potentially life-changing CBD oil right here in Austin, beginning early next year. "We're thrilled to have an option that's legal in Texas that may actually work," she told me.

The law lent state regulators until Sept. 1 to license three dispensaries. One of those few businesses is tucked away down a farm-like road in South Austin, planting a crop that could alter and improve the lives of thousands.

Not Your Second Cousin's Pot Farm

"Boom! Here it is," an enthusiastic Morris Denton exclaimed in the middle of our interview, just as he learned that his company, Compassionate Cultivation, officially secured the state's second license to grow and dispense medical cannabis. "That's history in the state of Texas. We can now grow cannabis. Think about that."

Denton, who's CEO of the new venture, and his business partners all come from different career paths, including tech and marketing. They started talks in 2016 and pooled their finances together to invest in the multi-million-dollar project they believe has the potential to transform the health care landscape within the state. While some have family members who suffer from epilepsy, others met with parents of epileptic children; Denton said "something changed" within him that solidified his motivation to start the business after those meetings. "We pushed all the chips in the middle of the table," he said. "We're here to help and do our best to make a positive impact on the state of Texas."

By May 1, Compassionate Cultivation had won a provisional state license, giving them the greenlight to start building their grow house and dispensary. The 7,000-sq.-ft. warehouse in Manchaca – vehicle accessible but not heavily trafficked – is a vertically integrated operation, meaning it both grows the plants and sells them in the same spot, a requirement of the law. So as a business it's part agricultural, part chemical, part research and testing, part retail, and, because they are barred from using any carrier service but their own for the cannabis oil shipments – no USPS, no Amazon – it's also a transport business. That added cost comes atop the hefty licensure tag: Dis­pen­saries in Texas must shell out a state fee of $488,520 for the first two years and a $318,511 renewal charge every biennium.

A largely empty room currently greets you as you walk through the doors of Compassionate Cultivation. Soon it will be transformed into the retail dispensary, specifically designed to accommodate epilepsy patients. The hard floors, sharp edges, and bright lights will get replaced by carpeting, indirect lighting, and a privacy area. "If you think about what an epilepsy patient needs to experience to feel comfortable, then this space should be much different," said Denton during a recent tour of the facility. The large-scale operation is guarded by tight security – key codes and several security cameras and surveillance monitors ensure constant protection. The business is far closer to a meticulously designed science lab than the freewheeling marijuana outpost some may envision.

"This isn't your second cousin's pot farm in his basement," said Denton. "This is a high-tech, first-class facility that's entire reason for being here is to produce the highest quality medicine that it can."

From Seed to Plant

Dim green lights meant to simulate the night softly illuminate a series of long metal trays where seeds are planted. Liquid carbon dioxide is pumped into the room to reduce the percentage of oxygen and stimulate growth. Fans bordering the space provide energy and movement. The vegetative rooms are where marijuana seeds come to germinate for a course of 30 days. After that they move to the flower rooms, and spend up to 60 days before the grown plant can be harvested. The 3-to-5-foot adult plant is then dried out and pulverized to resemble what Denton calls "a leafy tea."

From there, the product goes through an extraction machine that functions like "loading veggies into a fancy soup." Temperature and pressure extract the "goodness," Denton explained, and a vaporization process removes the liquid, leaving a highly viscous cannabidiol oil. Other stages purify, separate, and refine the oil. The lab also has the ability to test the product to identify any ingredient that needs to be isolated and removed. Compassionate Cultivation planted its first crop on Oct. 31; Denton said it's "performing really well" since then. He's satisfied with the progress.

"Marijuana has long been demonized and vilified as the mother of all evil, and it stands to be vindicated and valued as one of Earth's greatest possessions because of its potential impact on our wellness," said Denton. "The objective here is to try to understand what that means in a scientific and meaningful way. If we know the impact it has on patients with intractable epilepsy, it's likely to have an impact on similar neural conditions, as well as chronic pain."

Of course, the marijuana at play in the intricate growth process isn't what recreational users would pick up – by law, the cannabis (sativa L.) can't contain more than 0.5% THC, the plant's psychoactive component – better known as the part that gets you high. Meanwhile, average THC potency levels in Colorado hover around 20%, reaching 30% in some cases, according to the Ameri­can Chemical Society. And don't expect any patients in Texas to be toking up; the law specifically excludes smoking from the definition of "medical use." Instead, users can inhale the oil through a vapor or take it sublingually, in drops or capsules.

While CBD oil can be found in pharmacies and shops around town, the oil produced at Denton's facility contains THC – which, when combined with CBD, produces a stronger positive effect for intractable epilepsy patients, a synergy known as the "entourage effect." Additionally, there's the issue of purity; the medicinal oil in Texas-regulated dispensaries is tested for potency and contaminants, whereas it's more difficult to discern store-bought oil standards. Denton said his company tested seven different CBD oil products readily available in stores and "not a single one" contained what it advertised. "What's in the package isn't always what's on the label. If you're an epilepsy patient you need consistency and quality in your medicine, and those products provide neither of those things."

Compassionate Cultivation isn't the only dispensary in Texas, nor the only one that may be operating in the Austin area. On Sept. 1, Cansortium Texas (part of the Flor­i­da-based Cansortium Holdings) received the first state license to grow its crop in Schul­enburg, a rural town southeast of Austin, and is on track to make its first deliveries by the end of December, said a spokesperson with parent company Knox Med­i­cal. The group says they chose Schul­en­­burg because it's "well-located between San Antonio, Houston, and Austin, which serves as a good base of operations." The state's third company, Surterra Texas, plans to set up shop in the Austin area. (They've intentionally kept their location vague.) Surterra hopes to start distributing by the first quarter of 2018 but still awaits its final license.

After issuing licenses to three companies from a pool of 43, the Texas Department of Public Safety, which oversees regulation, is not currently accepting new applications. That temporary cap irked the Texas Canna­bis Industry Association, a coalition that includes 10 rejected dispensary applicants. In August, the group sent a complaint to DPS charging that the department changed the number of licenses to be handed out from 12 to three with "no explanation to support the abrupt change," thus violating the Administrative Procedure Act. The group has called on the state to begin a second round of applications and issue at least nine additional provisional licenses. According to DPS, the number of licenses awarded was based on an analysis of other states' compassionate-use programs, the number of patients in Texas with intractable epilepsy, and the law's requirements. A decision to increase the number of participating dispensaries will be made "if and when it is determined that more licenses are required in order to ensure reasonable statewide access."

Compassionate Cultivation is the sole Texas dispensary that's headquartered within the state. Denton, a native Austinite, said his company is rooted in the city, with no plans to take their business to another state. "We're not here to leverage our experience and go elsewhere," he said. "This is our home, these are our people, these are our neighbors, and they have been for decades."

A One-Word Problem

Sindi Rosales, founder and CEO of the Epilepsy Foundation of Central & South Texas, had never heard of the CBD-rich oil as a treatment for epilepsy. But when she was approached by concerned parents of children with Dravet syndrome, a rare and serious form of the disorder, it became clear to her that medicinal marijuana could be a game-changing solution. Her group and affiliate organizations in Texas proved the "driving force" behind Ft. Worth Repub­lic­an Rep. Stephanie Klick's Compassionate Use Act in 2015, heavily lobbying the Texas Legislature and drafting the legislation itself. "It was absolutely a grassroots effort," said Rosales. "It landed in our lap and we had no set plans, no budget. We didn't prepare for it. It was really just parents carrying the message. We were probably as surprised and shocked as anyone when we were successful at getting it passed."

Klick said she was moved by the story of a constituent's granddaughter with Dravet, who at one point landed in the hospital after a string of intense seizures collapsed her respiratory system and forced her to use a ventilator. "I researched the risk these kids take when treating symptoms with drugs," she said. "And [medical cannabis] is a safe alternative to get some relief." She notes that five children in Texas passed away from intractable epilepsy while she was pushing her legislation, intensifying its urgency. (Last Tuesday, Compassionate Cul­ti­vation announced plans to name its first strain the Klick Strain to honor the state representative. Denton will also name one of Com­pas­sionate Cultivation's rooms after Klick. Asked how it feels, as a conservative Repub­lican, to have a marijuana grow room named in her honor, Klick called it "definitely different," and quickly stressed her goal is to remedy patient suffering.)

Marijuana plants on display at a Tuesday dedication ceremony of a vegetation room at Compassionate Cultivation in honor of state Rep. Stephanie Klick, who wrote the bill that became the Texas Compassionate Use Act. Compassionate Cultivation also named its first strain of CBD-rich cannabis the Klick Strain for Rep. Klick. (Photo by Jana Birchum)

However, not everyone is convinced the law will work out according to plan. Heather Fazio, Texas political director for the Marijuana Policy Project, worries that the program won't function properly due to one word in the bill language – "prescribe." In the other 29 states (plus Washington, D.C.) where medical cannabis is available, the rules intentionally say doctors can "recommend" its use, instead of prescribe it. That's because even though the Drug Enforcement Agency still classifies marijuana as a Schedule I narcotic, a 2002 circuit court ruling allowed physicians to "recommend" medicinal marijuana to patients, a sort of loophole to evade federal punishment. Fazio is concerned the law could jeopardizes doctors, or make them skittish to join the program. "We tried to make amendments to the bill to protect doctors, but the authors were too stubborn," she said. "And now there's a legal flaw in the law."

Rosales is aware of the potential problem but says the law defines "prescribe" as "an entry in the compassionate-use registry" – a definition doctors they worked with on the legislation felt comfortable writing into the bill. Klick echoes the point, saying she and others did their "due diligence" by talking to agencies and physicians. "We didn't see it as a problem," she said.

Even if the potential one-word complication doesn't deter docs, the pool of qualified or interested physicians may be small. For patients to obtain the oil, two doctors must concur that treatment by cannabis is "reasonable in light of the potential benefit for the patient," according to DPS. To qualify, a physician must dedicate a "significant portion of their clinical practice to the evaluation and treatment of epilepsy" and be certified by the American Board of Psychi­a­try and Neurology or in neurophysiology. So far, six doctors have signed up in the Compassionate Use Registry as prescribers, according to DPS.

"Our challenge now is connecting patients with doctors that will support them," said Rosales. "I think initially there will be some apprehension or some uncertainty from doctors, but I think with more knowledge and experience that will change." Time – and doctor participation – will tell how the nascent program unfolds amid the expressed concerns.

In the meantime, Fazio's group is looking ahead to expand the population served by medicinal marijuana to include patients with cancer, PTSD, and chronic and debilitating pain. While she commends the law as historic and exciting, her group considers it "unreasonably narrow." But her hope that lawmakers could eventually expand the program was renewed this past legislative session when, for the first time ever, a Texas House committee voted out a comprehensive medical marijuana bill. The bipartisan HB 2107 attracted 72 co-authors, including 28 Republicans, before dying on its way to the full House. Fazio says she isn't "waiting around" for the 2019 legislative session, and has already started lobbying lawmakers for inclusive access.

Graham recognizes how imperative that access is – not just for those with epilepsy, but for patients suffering from a range of disorders unalleviated by pharmaceuticals – and hopes those wary of the stigmatized medicinal solution keep an open mind. For her son, time is critical. "When you have a child with pediatric seizures, waiting for treatment means a massive amount of lost development that could have been mitigated with the help of this plant," she said. "Every minute counts."

Blunt Answers on Compassionate Use

How many dispensaries have licenses to grow medicinal cannabis in Texas? Will there be more? Compassionate Cultivation and Cansortium Texas both currently have licenses. Surterra Texas expects to get a final license soon and offer service in the Austin area. The Texas Department of Public Safety is not accepting more applications at the moment.

What is low-THC cannabis? Not more than 0.5% by weight of tetrahydrocannabinol (THC) and not less than 10% by weight of cannabidiol (CBD).

So does this mean I can start growing pot in my basement? Nope. Only licensed dispensers will be able to grow cannabis and only for use in the production of low-THC cannabis. Patients can only buy the stuff from a licensed dispensing organization.

Who can access this medicinal cannabis? And is there an age limit? Only patients diagnosed with intractable epilepsy who get a recommendation from two physicians. No age limit, but patients under 18 may require a legal guardian.

Can out-of-state patients benefit? No, patients must be permanent residents of Texas.

Can you at least use a prescription from another state and fill it in Texas? No, again. Only physicians registered with the CUP program in Texas can authorize access.

Source: Texas Department of Public Safety