Southern University picked Advanced Biomedics of Lafayette and its guaranteed $6 million in payments to operate the school's medical marijuana business.
The other finalists to run Southern Ag Center's medical marijuana operations were Med Louisiana of Lafayette and Southern Roots Therapeutics of Baton Rouge. Each of the finalists made a five-minute presentation Friday to Southern's board of supervisors. The finalists were also allowed brief responses to board members' questions.
Advanced Biomedics guaranteed the most money to the Ag Center over the five-year contract. The company promised a $1 million contract signing bonus and then $1 million on the first of each year, which means Southern will collect $3 million within the next 15 months or so.
"We come here with a ton of experience, and we look to make a lasting impact on this community and really become a part of the Southern community," said Eugene Monroe, who will head community outreach and lay out Advanced Biomedics' products.
Monroe said the company's members hold 20 medical marijuana licenses in eight states. Advanced Biomedics plans to draw on its members' financial skills to help incubate local businesses and teach Southern students entrepreneurial skills.
Monroe, a retired tackle for the NFL's Baltimore Ravens and a medical marijuana advocate, admitted that most of Advanced Biomedics' expertise will come from out of state.
However, Advanced Biomedics co-founder Chad Bodin, a Lafayette pharmacist, said the company plans to train Southern grads to take over those jobs. The former holders of those positions will move forward with other work.
Bodin said the company plans to build a cultivation and processing center in Baker and will hire locals where possible.
Southern's Ag Center holds one of two state licenses to produce medical marijuana. The LSU AgCenter holds the other and picked Las Vegas-based GB Sciences as its operator. GB Sciences will pay the AgCenter $3.4 million or 10 percent of revenue, whichever is more, over five years.
The LSU AgCenter is betting the future of its medical marijuana business on a small Las Vega…
Two weeks ago, Southern's review committee recommended that Med Louisiana be awarded the school's medical marijuana business. Janana Snowden, director of the Southern Institute for Medicinal Plants and head of the review committee, said Med Louisiana's financial strength, expertise in cultivation and proprietary patents made it the top choice.
However, Southern's board members questioned the wisdom of accepting less than $2 million in guaranteed payments and the promise of a bigger share of profits down the road. Members also didn't like Med Louisiana's plan to put the grow facility in St. Landry Parish rather than a location that could stimulate north Baton Rouge's economy.
The board asked the three finalists to address those concerns, as well as minority ownership, and return with their best-and-final offers. Med Louisiana did not change the location of its proposed facility.
Board member Domoine Rutledge offered the motion to award the contract to Advanced Biomedics. He based his recommendation on the finalists' financial health, guaranteed return to the university, ability to make the best medicine, diverse ownership and economic impact in north Baton Rouge.
The board approved Advanced Biomedics 13-0, with two abstentions.
Board member Tony Clayton had offered a substitute motion backing Baton Rouge-based Southern Roots Therapeutics. Southern Roots originally offered $3.5 million in guaranteed payments and upped that to $5 million or 10 percent of revenue, whichever was greater.
Clayton said he liked the local flavor of Southern Roots. All of the company's medical marijuana cultivation and processing expertise would have come from Louisiana expats. CEO Allen Square, a graduate of the Wharton School of Business, is from New Orleans.
Southern Roots is made up of people married to the community and can better reach the people who suffer from the diseases treatable with medical marijuana, especially those too poor to get early access to care, Clayton said. In addition, local banks would work with Southern Roots and should get the opportunity, he said. Clayton's motion failed.
Two years have passed since Louisiana legalized the use of marijuana for medicinal purposes …
State law requires the medicine to be in a liquid, such as an oil or spray; capsules or pills; edible dosages; topical applications; trans-dermal patches; or suppositories. The law limits the number of illnesses that can be treated with medical marijuana, including cancer, HIV and AIDS, cachexia or wasting syndrome, seizure disorders, epilepsy, spasticity, Crohn's disease, muscular dystrophy and multiple sclerosis.