Before they're selected, patients say they want to know if prospective growers have any experience and if they're committed to providing low-cost supplies in clinics that also offer medical counseling services.
Mostly, the patients SFR talked to say they're worried about applicants' money motivations.
Their concerns appear to be warranted. Audio recordings provided to SFR by two registered patients shed light on one applicant's dreams of cashing in with medical cannabis. And instead of answering questions about it, the dreamers say through a lawyer that their application is now off the table.
Greg Avioli's name might not ring a bell on the pop culture or political scene in New Mexico, but in the high-stakes world of horse racing, it means something. He helmed the prestigious Breeders' Cup between 2006 and 2011.
While neither Avioli nor his wife, Cheryl Buley Avioli, would grant an interview about the application for a nonprofit called Greenstem Wellness, a New Mexico couple who worked with them early in the process was willing to talk.
Lauren and Jerrod Burnelle, who are licensed by the health department to grow cannabis at home for their personal use, are not listed on any application.
Yet their story and recording they say they made of a conversation with the Aviolis show the potential breadth and depth of interest in New Mexico's recent "green rush," with a tale of big money opportunities and political connections in the cannabis industry.
Claiming to be "semi-retired" at 50, Avioli tells the Burnelles he likes his chances of getting a license because of connections the family has with "the current governor."
If all goes according to plan, Avioli claims he wants a Fortune 500 company to acquire Greenstem's for-profit management firm once weed is legalized for recreational use.
According to the Burnelles, Avioli and his wife had a good pitch: They have years of business and government regulation experience but little horticulture know-how. They needed help to write the cannabis cultivation plan required in the application process.
At first, the Burnelles were ecstatic. They believed they were getting a real shot to get in on the ground floor of the state's expanding cannabis business.
Lauren Burnelle remembers the out-of-state duo making a good first impression.
Before his stint at the Breeders’ Cup, Greg Avioli’s record of accomplishment with the National Thoroughbred Racing Association in Lexington, Kentucky, according to his own LinkedIn page, includes lobbying Congress to amend the Interstate Horseracing Act “to allow the US horse racing industry the exclusive right to conduct interstate online account wagering and commingling of wagering pools.”
Cheryl also has a good resume. She was appointed by former New York Gov. George Pataki to the New York State Public Service Commission to regulate utilities and telecommunications firms. Before that, Pataki named her to be the state's first Horse Racing and Pari-Mutuel Wagering Board chairwoman.
Despite impressive business credentials, the Aviolis still needed experienced growers for their operation, and Jerrod Burnelle needed a good job. It looked like a match made in heaven. Millions of dollars could be made if things went perfectly—or so the Burnelles thought.
The "perfect" match didn't last long.
When Greg Avioli visited the Burnelles at their home in Albuquerque in January, Lauren turned on her phone's recording app.
On the recordings, Avioli talks about the couple's chances of getting a license and their political connections. He even shares his strategy to move money from Greenstem's nonprofit business accounts to a for-profit management firm, so he can sell it later.
Lauren tells SFR she began making "audio notes" during a period when she was unable to walk and used a wheelchair. The recordings, she claims, helped her recall doctors' orders after they were unable to diagnose her condition. As it turns out, the digital audio files provided to SFR also helped document the Burnelles' short relationship with the Aviolis.
As the Burnelles tell it, after Avioli got settled in their living room, he said that he and his wife wanted to leave Kentucky and "do something different."
Last May, when the health secretary announced she'd consider up to a dozen new licenses, the couple, he says in the recording, started thinking, "Why don't we go get one?"
"You have to have your head in the sand not to understand the potential growth of the medical marijuana," Avioli says. "There isn't anything else like it. I mean, if you look at the big numbers, they project that within 20 years it's going to be twice the size of coffee and tea and 20 percent of [inaudible], so you're talking a $40 billion industry."
He suggests he liked Greenstem's chances of being awarded a license, noting that the application effort had been "expensive."
Avioli also boasts about a trump card in his pocket.
"I can't tell you we're going to get a license. I think we have a very good chance," he says in the recording. "As it would happen, we have a very good relationship with the current governor."
The governor's deputy press secretary, Micheal Lonegran, however, refutes that claim.
"That's a foolish assertion he's making," Lonegran writes. "The governor isn't, and has never been, a part of the selection process. The secretary and her staff review the applications and select the best based upon various criteria. That company didn't even make the first cut."
With the recorder still turned on, Avioli rambles on about Greenstem's strategies to the Burnelles; he also brags about the "insane board" they've recruited, which includes a nurse with 37 years of holistic healing experience and a patient who is also a hypnotherapist.
"It's almost all women and minorities," says Avioli, adding they also have a male pharmacist.
For a few brief moments, Avioli shares Greenstem's goal to offer compassionate care and delivery service to unserved patients, but he seems to spend much of conversation dwelling on how to specifically structure a profitable management company.
"You figure out how to get most of the revenue from the nonprofit to the for-profit," says Avioli. "Down the road, I want to sell the whole business. When Proctor and Gamble starts buying these things up, right, that's where you cash out your money."
That view on how to profit from a public health program license upsets Larry Love, a patient and outspoken industry analyst.
Love says when lawmakers and administrators set up the program, they wanted the focus to be on patients, not profits. Eight years later, he doesn't believe everyone who wants a new license is thinking about patient care.
"These people are greedy and only care about themselves, their vacations, cars, and buying second and third homes from profits they make from sick people. They are opportunists and phonies," says Love. "Every state has these type of people, and they need to be called out and boycotted."
If large dispensaries in California can operate as successful nonprofits, Love says, "it can be done here."
"It's all about taking reasonable salaries, taking care of your employees and most of all giving back to the patients," he claims.
Lauren Burnelle says Greg Avioli called them from California a day after leaving their house to tell them that he was meeting with investors and wanted something to show them. She provided SFR with emails from Avioli about the cultivation plan. Yet, she says, the request came so fast that the Burnelles never signed an agreement to be paid for their work.
Without public access to the application, it's not clear if the Aviolis actually used any of the Burnelles' ideas. But when a criminal background check showed Jerrod's felony conviction in North Dakota related to growing marijuana, Lauren claims they were cut off and never received any compensation from the Aviolis or Greenstem.
"We were exploited," she says. "They already knew Jerrod had a record. They had even suggested they use my name as their master grower."
Confronted with his recorded statements in a phone call, Greg Avioli referred SFR back to his wife, saying, "It's really her business."
Cheryl replied to an emailed invitation to clarify Avioli's statements, noting that she suspected SFR's source was an "illegal recording" but never committing to an interview.
"I will say we aren't friendly with the governor! I can contradict your comments and talk about how it was always my goal to have a woman board etc. and that you're not really a part of my business," she writes.
Chip Tuttle, a public relations account executive with CTP, an East Coast agency that claims to help brands that want to "Live Out Loud," contacted SFR on Cheryl's behalf. Tuttle, who says he's a longtime friend of the Aviolis, wanted to determine if they should respond to questions.
Two days later, Ross Perkal, an Albuquerque lawyer claiming to represent the Aviolis, informed SFR in an email that his clients were no longer seeking a license to grow cannabis in New Mexico and threatened to hold SFR "strictly liable to the fullest extent of the law" before we published one word of this investigation.
Perkal asserted that the Burnelles are trying to extort the Aviolis, because they hold a personal vendetta against the couple for not offering Jerrod a position with Greenstem.
The attorney also suggested the audio SFR received was illegally recorded, despite laws in New Mexico that only require one party's consent.
The timeline in play isn't clear. After Perkal wrote that the Aviolis had withdrawn their application for a nonprofit license, we checked with the New Mexico Department of Health about the claim. They wouldn't confirm or deny whether the application was still in the running, but late Monday said those who had not made the first cut would be notified.
Read about other applicants here.
Santa Fe Reporter