POT DISPENSARY OUTFIT TO FILE WITH STATE TODAY

AUGUSTA -- An attorney for Maine's largest medical marijuana nonprofit
group says it has secured $1.6 million in financing in a deal that
will be formally delivered to the state today.

If approved, the deal will enable Northeast Patients Group to open its
first dispensary within a month, according to Daniel Walker, a
Portland lawyer who represents the struggling dispensary group.

Walker filed documents Aug. 4 with the Maine Department of Health and
Human Services naming The Farmacy Institute for Wellness and retired
NBA basketball player Cuttino Mobley as partners in The Wellness and
Pain Management Connection LLC.

The Wellness and Pain Management Connection LLC -- which formed Aug. 3
in Delaware -- is the entity that will lend Northeast $1.6 million
during eight years at 8.5 annual interest.

Walker said The Wellness and Pain Management Connection LLC was not
formed at the last minute, but had been in the works for "months and
months."

"It wasn't this mashed-together, last-minute thing," he
said.

The Farmacy Institute for Wellness is an offshoot of The Farmacy,
which operates three dispensaries in California, Walker said.

Joanna LaForce, director of clinical operations for those
dispensaries, will "oversee and support delivery of certain consulting
and related services" for Northeast, according to the term sheet
detailing the loan.

Walker said Northeast's first dispensary, in Thomaston, will be open
in the first half of September, thanks in part to the new capital.
State officials have said they inspected a Northeast cultivation
operation there, where two people now work, in June.

Northeast's deal with The Wellness and Pain Management Connection LLC
has been questioned by several interests, including Berkeley Patients
Group, Northeast's former backer, which sued Northeast in Cumberland
County Superior Court in July for repayment of more than $632,000 in
loans.

Berkeley also alleges Northeast Patients Group CEO Becky DeKeuster
used proprietary information to negotiate the deal with Mobley while
still employed as Berkeley's New England expansion director.

She quit that job days after signing the deal with The Farmacy
Institute for Wellness.

Berkeley is also asking the court to remove DeKeuster from her job
with Northeast.

An attorney for The Farmacy also questioned whether a deal had been
reached. William Kroger, a Beverly Hills, Calif., attorney who said he
represented The Farmacy, said Aug. 5 there was no deal between
Northeast and The Farmacy.

"Your facts are incorrect," Kroger wrote in an email. "I am the
attorney for The Farmacy and there has not been any such agreement or
business arrangement."

"I think it was a misstatement," Walker said of Kroger's statement.
"(He thought LaForce) had given the money, or that it was a
collective. No one's denying there was an agreement."

Walker -- who had not returned several calls over the past several
weeks seeking clarifications on Northeast's operating status, said
Friday that published reports have erroneously overstated his role
with Northeast.

He has never been chairman of the Northeast Patients Group board of
directors, Walker said Friday.

"I'm just counsel, not chairman of the board," he said.

DeKeuster did not return calls seeking comment last
week.

DHHs spokesman John Martins said Friday the department's licensing
staff will receive signed copies of the agreement this week; Walker
said those documents will be delivered to the state today.

Martins wrote that department representatives have "seen signed
documentation regarding the agreement."

"We have full confidence that the agreement is in place," Martins
wrote.

Northeast Patients Group owns the exclusive right to run half the
state's licensed marijuana dispensaries, including the state's largest
potential markets: Portland, Bangor and Augusta.

But the organization has struggled to open a single dispensary, and it
has dialed back the financial expectations it envisioned in its
initial applications.

In its 2010 application, Northeast projected a net gain of more than
$426,000 while serving 691 patients in its first full year.

On July 20, Northeast projected a net loss of more than $1.75 million
while serving 540 patients in its first full year.

Meanwhile, growth in the state's medical marijuana program has
skyrocketed.

In March, the state said there were 773 patients. By mid-June, 1,800
patients were approved, according to John Thiele, medical marijuana
program manager for the DHHS Division of Licensing and Regulatory Services.