STORE IN PROVIDENCE WOULD GROW, PACKAGE AND SELL MEDICAL MARIJUANA

PROVIDENCE, R.I. -- The old warehouse complex in the Valley
neighborhood has been many things to many people over the past 150
years. It was once home to the James Hanley Brewing Co., and Harry
Houdini, the renowned escape artist, paid a visit and successfully
broke free from a locked beer cask.

In recent years, the fortress-like site has served as the Capitol
Records Center, a storage facility for reams of archived state documents.

Now, the two vacant buildings at 431 Harris Ave. may soon take on a
new historic significance: A group of investors is contending to turn
it into the state's first medical marijuana store. They would name it
the Thomas C. Slater Compassion Center, after the late Providence
state representative who championed the legalization of medical
marijuana, to grow and applicants interested in operating a
compassion center in Rhode Island under rules developed by the
Department of Health. There are applications for other centers in
Providence as well as for marijuana retail sites in Pawtucket,
Portsmouth, the Warwick/Cranston area and northern Rhode Island.
Several applicants have yet to secure an exact location while one did
not respond to a request seeking a tour of its proposed facility.
Another declined the offer, while Slater officials agreed to meet
with a Journal reporter and photographer.

On Tuesday, the Health Department, which solicited the compassion
center proposals, has scheduled a hearing in the Cannon Building, 3
Capitol Hill, Room 104, for the public to air its concerns or support
for the various proposals.

The hearing begins at 10 a.m. Key issues are expected to be the
location and the proposed security measures for the centers.

The Health Department plans to select up to three applicants by Aug. 1.

If the Slater Compassion Center is chosen, Gerald J. McGraw Jr., the
investor group's president, and Chris Reilly, the group's spokesman,
said that, by November, they can transform the 75,000-square-foot
center into a thriving all-service marijuana outlet.

"We will be a good corporate citizen, and we will contribute jobs to
the economy," Reilly said.

McGraw said that the center would train and hire up to 75 employees
for security, cultivation, storage, sales and a variety of other
services that the center would offer such as yoga, Reiki and hypnotherapy.

Only licensed medical marijuana users, who must be at least 18 years
old, would be allowed on the grounds, and they would be the only ones
who could take advantage of the other programs.

A business plan filed with the Health Department, part of the
application process for all prospective operators, projects that the
Slater Center's revenues will top $510,000 this year, and that those
numbers are expected to grow nearly sixfold to $2.9 million by 2012.

Plans for the Slater Center are modeled after the Harborside Health
Center, a well-established medical marijuana business in northern
California with 46,000 registered patients and offices in Oakland and
San Jose. McGraw has hired Harborside's parent company, CannBe, and
several of its top officials to help his team launch the marijuana
center in Rhode Island.

Medical marijuana has become a big business in the West. There are
more than 200,000 licensed medical marijuana users in California and
more than 80,000 in Colorado. Since last fall, the number of
dispensaries selling marijuana in Colorado has surged from 70 to more
than 1,100.

Both states also have imposed a sales tax on the drug. Rhode Island,
one of only six states that have approved medical marijuana
dispensaries, along with the District of Columbia, has yet to
consider such a proposal for the 1,800 patients registered under the
burgeoning program.

About 25 new patients a month are getting medical marijuana licenses
from the Health Department to deal with medical conditions that have
been reviewed by physicians. Rhode Island has had a medical marijuana
program since 2006.

Thomas M. Underhill, a retired state police lieutenant and a vice
president at APG Security in Cranston, would be in charge of a
sophisticated security system at the Slater Center.

Licensed patients would enter the grounds of the center by passing
through a security gate on Harris Avenue. Once inside, valet service
would be available for the infirm, and the patients would go to a
4,000-square-foot. satellite building that would serve as the
compassion center. There, customers would be able to buy various
strains of marijuana at prices ranging from $25 to $51 for an eighth
of an ounce.

An ounce would cost anywhere from $450 to $550.

Under state law, a patient cannot be sold more than 2.5 ounces of
marijuana during a 15-day period.

Among the possible strains that would be grown and sold at the Slater
Center are Strawberry Cough, New York City Diesel, Chem Dawg and Mr.
Nice. The various strains are designed to provide relief for a
variety of maladies including chronic pain, muscle spasms, nausea,
mood disorders and anxiety.

The center may sell up to 25 different strains in the on-site store
that would feature glass and wood cases similar to those a customer
might find at a jewelry store. Slater officials said that state law
prohibits customers from smoking the marijuana on the grounds of a
compassion center.

The larger, adjacent warehouse is where the marijuana would be grown,
packaged and stored. McGraw, the center's president, said the product
in the store would be moved to the warehouse each night.

The compassion center would be open for business 7 days a week from
10 a.m. to 7 p.m.

The warehouse would be the primary hub of activity. On the second
floor, there are two expansive rooms that would be used to grow the
marijuana. It is unclear how many customers the Slater Center would
serve, but McGraw is hoping for about 600 to start.

The more customers that choose to buy marijuana from a center, the
more marijuana its operators would be allowed to grow. As of last
week, there were 1,790 licensed patients in the state's medical
marijuana program. They may now get their marijuana only from among
the state's more than 1,300 licensed individual growers.

Once the first compassion center opens, licensed patients would have
the option of going there or continuing to deal with individual growers.

McGraw, who runs J&J Electric, in Warwick, said that he has a
purchase and sale agreement in hand to buy the warehouse complex,
provided that the state grants his group a license to open.

[sidebar]

KEY POINTS

Marijuana Across the U.S.

States with operating medical marijuana dispensaries: California,
Colorado, New Mexico.

States that have approved the opening of dispensaries: Rhode Island,
Maine and New Jersey, and the District of Columbia.