TX: Austin Medical Marijuana Firm Has To Relocate Due To School Proximity

Photo Credit: Ricardo Arduengo

The type of marijuana grown under the state’s medical cannabis law can’t get anybody high, but Texas regulators still don’t want it near school children — a policy one of the new medical cannabis companies has learned the hard way.

Surterra Texas is months behind the other two medical cannabis companies licensed in Texas — Compassionate Cultivation and Cansortium Texas — in terms of harvesting its first crop and bringing initial medicines to market, after it was found to be too close to a Northeast Austin preschool last August and was forced to relocate.

The company moved its operations to 6912 Hergotz Lane, an industrial area east of Interstate 35, and it didn’t receive its final state license to begin planting seeds until Dec. 15, compared to Sept. 1 for Cansortium Texas and Oct. 31 for Compassionate Cultivation. Both Cansortium and Compassionate Cultivation have been selling their cannabis-based medicine since early February, while Surterra says on its website that it “will soon be proudly supporting Texas patients” but is still growing its initial crop.

Surterra Texas, a division of Atlanta-based Surterra Wellness, didn’t respond to multiple requests for comment.

The issue involving the company’s initial Austin location — which was on Wells Branch Parkway, slightly closer to Stepping Stone School than a requirement of 1,000 feet of distance from schools or day cares — surfaced in documents recently obtained by the American-Statesman through an open records request to the Texas Department of Public Safety. The open records request was originally filed more than five months ago.

The company has resisted releasing details of its operations, including its physical address. Among other contentions, a lawyer for Surterra argued to the Texas attorney general’s office in January that disclosing either its previous or its new address would undermine the company’s trade secrets regarding delivery routes and logistics.

“Surterra has spent years and invested substantial funds into researching the optimal geographical locations in Texas and other states for its operations,” the lawyer wrote. “Disclosure of Surterra’s facility location information would severely undermine its competitive advantage in this unique industry.”

The attorney general’s office apparently agreed with Surterra that the addresses could be kept from the public, and they were redacted from the documents recently received by the American-Statesman, although the reason for the company’s move to a new location was made clear. The newspaper previously learned the addresses from the Department of Public Safety, which is overseeing the state’s new medical cannabis industry.

Compassionate Cultivation is located in the Austin metro area at 12701 Lowden Lane in Manchaca, while Cansortium Texas — which operates under the Knox Medical brand and is a division of Florida-based Cansortium Holdings — is on West U.S. 90 in Schulenburg. Neither company has maintained that their addresses are secret information.

Texas has one of the most restrictive medical cannabis laws among states that have legalized various forms of marijuana for medical uses.

The Texas Department of Public Safety has said it initially will license only three companies, and those companies face high state fees, a rigid regulatory environment and a limited customer base. Under the law, called the Compassionate Use Act, only non-psychoactive strains of marijuana can be grown in Texas, and only patients suffering from a rare form of epilepsy and under a doctor’s direction can purchase the products.

Proponents of medical marijuana are widely expected to push during next year’s legislative session for greater access for more patients and fewer constraints.

But the regulation that tripped up Surterra Texas — the mandate that the facilities can’t be within 1,000 feet of a school or day care — appears unlikely to change.

“For schools and day cares, that probably is reasonable,” said state Rep. Stephanie Klick, R-Fort Worth, who helped sponsor the Compassionate Use Act.

The 1,000-foot requirement is among the rules devised by the DPS to regulate the new industry, and it wasn’t in the original text of the Compassionate Use Act legislation. However, Klick called the rule sensible, saying other businesses — such as alcohol retailers — face distance restrictions, and the new cannabis dispensaries also house expensive high-tech equipment that could make them targets for criminals.

Regardless, Surterra Texas offered an unsuccessful defense of its Well Branch Parkway location last summer, before it was forced to move. The company’s own measurements found its property line to be about 960 feet “from the closest boundary of the property that (is) partially used by the school for outdoor functions,” it told DPS officials in an e-mail last July.

“We feel that the (1,000-foot rule) is extreme, especially considering that no regulated activities in the facility can be harmful to humans, regardless of age,” a company representative said in the e-mail.

The company also defended itself based on state regulations for alcohol retailers. State law allows local governments to stipulate that alcohol retailers not be within 300 feet of a school, although the requirement also can be increased to 1,000 feet under certain circumstances.