Marijuana Illinois

Southern University has issued an ultimatum to its medical marijuana growing partner, warning it could pick another vendor if the company doesn't show its progress and make payments called for in a contract with the university.

Southern University has given Advanced Biomedics until next Thursday to pay $2.15 million to the university and make progress on its medical marijuana growing operations, warning the company in a letter that otherwise the university would be “forced” to pick someone else to run its program.

Southern imposed the deadline on the Lafayette company in a letter dated Oct. 17, obtained Wednesday through a public records request. The letter represents at least the second time this year the university has issued an ultimatum to Advanced Biomedics. Southern warned the company in May it would pick another vendor unless the two main owners of the firm stopped battling in court over ownership and other issues.

“… We expect Advanced Biomedics to have commenced with performance under the contract and payment of the required compensation by November 15, 2018,” Southern attorney Winston Decuir Jr. wrote in the Oct. 17 letter. “Otherwise, the University will be forced to consider alternative vendors who desire to fulfill the terms of the contract.”

Southern University also is expected to hold a special board meeting next week regarding the university’s medical marijuana program, which would be the first public update on the operation since May when Advanced Biomedics was selected. University spokeswoman Janene Tate declined to comment Wednesday on the letter or the meeting.

In his letter, Decuir told Advanced Biomedics lawyer Randy Angelle that state agriculture regulators had given both LSU and Southern permission to begin growing a “research” marijuana crop in temporary pods a month earlier, on Sept. 17.

That meant, according to Decuir, that the “effective date” of Advanced Biomedics' contract with Southern had occurred, and Southern said it would give the firm until Nov. 15 to “commence and complete those obligations required upon the effective date of the contract.”

Tate, the Southern spokeswoman, previously had said Advanced Biomedics would owe the school $2.15 million “on the effective date of the contract.” That includes a $1 million signing bonus, a $1 million annual service fee and a $150,000 contribution for medicinal plant research.

According to the contract, $2 million was due “on the effective date” and the $150,000 payment “within 72 hours of the effective date.”

Veronica Mosgrove, press secretary for the state's Department of Agriculture and Forestry, said in an email that Southern will have the same opportunity as LSU to operate out of a temporary pod "if they meet certain requirements."

Advanced Biomedics appears to have made little, if any, progress toward building a marijuana facility or growing plants. In response to a public records request last month, the agriculture department said Advanced Biomedics had not filed information required under state regulations to obtain a license.

The company initially planned to build a facility on a 176-acre tract of land on La. 964 in Baker, but the owner of that property, Sidney Bowden, told The Advocate late last month that those talks never progressed and happened over a year ago.

As recently as mid-October, Lafayette businessman Hunter Perret was in negotiations to buy out Carrol Castille’s majority ownership interest in Advanced Biomedics, but those talks fell apart, a spokeswoman for Perret confirmed last month. 

Angelle and Advanced Biomedics representatives Chuck Huebner and Chad Bodin, the minority owner who feuded with Castille previously, all did not return messages seeking comment Wednesday.

In Southern's Oct. 17 letter, Decuir acknowledged “significant hurdles that have caused delays” in beginning the marijuana program at the school.

Regulatory issues with the Louisiana Department of Agriculture and Forestry have been the source of delays for the state's only other licensed marijuana grower, GB Sciences, which is partnered with LSU. That firm said it will likely have product available early next year. The agriculture department, which regulates the marijuana growers, made clear it does not want to be the reason for any future delays, according to Decuir's letter demanding payment and progress from Advanced Biomedics.

Southern was attracted to Advanced Biomedics in part because of the firm's promise of more than $6 million in total payments over the life of its contract with the university — exceeding any other applicant. Seven companies applied to be Southern's marijuana growing partner.

Advanced Biomedics beat out two other finalists for the marijuana contract last fall, despite a review committee recommending the board pick a different vendor.

Earlier this spring, at a Southern board meeting where members were deciding whether to sign a deal with Advanced Biomedics, Southern University President and Chancellor Ray Belton touted the “positive cash flow” that would come from the deal.

“If we move away from Advanced Biomedics, where do we go? Who do we go to? Another vendor whom this board has already found does not provide the kind of subsidies which we are seeking right now?” Belton said at the meeting.

In the weeks leading up to that vote, owners Castille and Bodin, a Lafayette-based pharmacist, had filed lawsuits against each other in Lafayette court over ownership interests and contract negotiations, though lawyers filed motions dismissing those suits. In those suits, Castille had accused Bodin of “fraudulently” negotiating a contract with Southern. Bodin also sued Castille, alleging he never put up the $12 million in capital contributions he promised, and was therefore never even an owner of the company.

Advanced Biomedics also faced another lawsuit around the same time, when a Baton Rouge investor claimed Bodin broke his word on a $20 million deal that would have given an investment group a 14 percent stake in the firm. That dispute was being worked on out of court.

Documents filed with Southern in September show Castille, with 68 percent interest, and Bodin, with 24.5 percent interest, were still the two main owners. The other owners were listed as Eugene Monroe, a former NFL offensive tackle turned marijuana activist, who owns 4 percent; Jill Lamoureaux, 1 percent; Gerald McGee, 1 percent; Tim Hardy, 1 percent; and Alanna Williams, 0.5 percent.

Follow Sam Karlin on Twitter, @samkarlin.