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Wall Street is this medical-marijuana bidder's secret weapon

By Andrew J. Hawkins | Posted: 07/07/2015

The state is expected to name the five winners of its coveted medical-marijuana licenses any day now, but one bidder thinks he has a leg up over the competition thanks to an influx of cash from an unusual source: a major investment bank.

Ari Hoffnung, a 2005 Bronx City Council candidate whose Fiorello Pharmaceuticals was named after legendary New York City Mayor Fiorello La Guardia, asserted that his company's partnership with CastleOak Securities, a subsidiary of major Wall Street firm Cantor Fitzgerald, places his bid head-and-shoulders above the rest. He said he is the only applicant to publicly announce a partnership with a leading investment bank.

"There are, unfortunately, not too many banks who are willing to work with the medical-marijuana industry," Mr. Hoffnung said. "I'm grateful that CastleOak stepped up to the plate and worked in partnership with us."

CastleOak helped Mr. Hoffnung's Fiorello Pharmaceuticals raise $7.5 million in Series A financing, an amount he hopes to double if awarded a state license. Marijuana investors estimate startup costs for companies in New York to be a minimum of $25 million. (A spokeswoman for the bank did not immediately return a request for comment.)

Institutional investment has been hard to come by in the emerging medical-marijuana industry. Because banks and credit-card companies are federally regulated, and federal law prohibits the sale and possession of marijuana, most medical-pot businesses deal solely in cash. CastleOak, a historically African-American-owned bank, saw the value in Mr. Hoffnung's company after several meetings, he said. He also is partnering with the Clinic Marijuana Center in Denver.

Other major players are vying for a state license. One applicant is a partnership between the Greater New York Hospital Association's for-profit subsidiary, GNYHA Ventures, and the Durst Organization. The state is expected to select the winners before the end of July.

Mr. Hoffnung is no stranger to the world of high finance or government. After losing to Oliver Koppell in the Democratic primary for City Council in 2005, he served as a managing director at Bear Stearns, the brokerage firm that failed in 2008 and was later sold to JPMorgan Chase. More recently, he was deputy comptroller for budget and public affairs under Comptroller John Liu, where he helped develop a report called "Medical Marijuana in the Big Apple." The report found that 100,000 New York City residents would benefit under a medical-marijuana program.

Winning a state license is also a personal quest for Mr. Hoffnung: His younger brother, who lives in Israel, suffers from lymphoma and had to go through chemotherapy.

"Somebody who has an M.B.A. in finance like myself, when it comes to helping someone deal with nausea, pain and appetite issues, that's not my skill set," he said. "I can do fancy PowerPoint presentations and advanced Excel modeling, but when it comes to really helping somebody, aside from offering compassion and support, I'm quite limited. And I felt somewhat handicapped."

"That led me to become a passionate advocate for medical marijuana," he added.



Hawaii medical marijuana bill raises concern for police

By Kenny Choi | 8:10 PM HST May 25, 2015

HONOLULU —For the first time, the Honolulu Police Department is talking about a program that was established 20 years ago to keep drug-impaired drivers off the streets.

Lawmakers recently passed a bill that would allow medical marijuana dispensaries in Hawaii. It’s something that police believe will lead to more “drugged driving”.

So what happens when a police officer observes what looks like an impaired driver, but there's no detection of alcohol?

“More and more operators driving while being impaired by other things medicinal marijuana or prescriptions or illicit drugs they're using," said Sgt. Benjamin Moszkowicz, HPD.

Police across the islands arrest on average 7,000 drivers under the influence of alcohol, but only 300 to 400 drug impaired drivers.

It’s a small number compared to the 11 percent of weekend nighttime drivers across the country who tested positive for illegal drugs.

However, police on the islands believe that’s because there aren’t enough trained Drug Recognition Experts (DREs) on the streets.

“Officers without that training don't feel comfy with making DUI-drug arrests without knowing what drug could be or how it's impairing the subject,” said Moszkowicz.

Upon graduating, 25 DREs will be hitting the streets after going through more than 130 hours of training. No cameras were allowed inside the training room, but Honolulu Police took us through some of the 12 steps in making a DUI-drug arrest.

“This training does help and make it easier for us to identify the drug categories,” said Nicholas Krau, Maui Police Department. “People who go to DRE program make lot more arrests than standard officer.”

DREs make up less than 1 percent of all law enforcement officers nationwide, and they can recognize certain characteristics of various drug impaired drivers.

“As we get more impaired drivers, need more officers on road to be able to detect and get off the road so we reduce serious injuries and fatalities,” said Karen Kahikina, the Dept. of Transportation DRE state coordinator.”

Currently, there are 64 DREs across six agencies statewide. The DOT coordinates the program and receives federal funding to train the officers.

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