"It’s going to be fiercely competitive," said Enriquez.
Two years ago, 43 applicants applied to legally grow marijuana for medical purposes in Texas, but only three were granted a license. Now, the state will open up the application process again.
"You know, an influx of work and labor and potential jobs for a lot of people," said Enriquez.
“If we were trying to run this business to be profitable (indefinitely under the existing constraints of the Compassionate Use Act), we probably would not start with a facility of this size,” Denton said of the Manchaca operation.
“It is safe to say that it is a challenging market,” said Morris Denton, chief executive of Compassionate Cultivation.
To emulate California, however, Texas would have to make cannabis-derived products accessible by many more patients suffering a much greater variety of ailments, and it would have to lift constraints on the amount of tetrahydrocannabinols, or THC, they are allowed to contain. THC induces a high, but advocates say it also has therapeutic effects for patients with chronic pain, autism, post-traumatic stress disorder and other medical conditions.
The Epilepsy Foundation Texas has pegged the number of Texans with intractable epilepsy at about 150,000.
Still, he said he thinks his company could turn “a narrow profit” under the current law, provided the business is “managed very efficiently.” Denton, an Austin native, began Compassionate Cultivation with five partners.
As things stand, each of the three companies selected for licenses is required to pay a $488,520 fee upon final approval, followed by a license renewal fee of $318,511 in two years if they want to stay in business. The fees are designed to cover the cost of regulating the new industry, state officials have said.
“These first few years are not going to be very profitable, and it is going to be more about being first and establishing your brand” in advance of a hoped-for expansion of the law, Fazio said.
Observers of the burgeoning legal marijuana industry in the U.S. say the new Texas law is significantly more restrictive than medical marijuana laws in the 29 other states that have enacted them.
Cansortium Texas, a division of Florida-based Cansortium Holdings, which sells medical cannabis under the Knox Medical brand, was awarded the license Friday and will operate a facility on West U.S. 90 in Schulenburg.