CannaMed Colorado's largest medical pot evaluation company faces scrutiny for selling patient information
Karen needed a medical marijuana card. She'd smoked enough pot in her fifty years to know that it subdued her recurring headaches, her nausea, the pain that lingered from the knee surgery she'd had a few years earlier. With all the medical marijuana dispensaries proliferating around Denver, it just made sense to get legal with her medication.
To obtain that card, though, she needed a doctor to recommend her for medical marijuana — and since she couldn't afford health insurance, she hadn't seen a regular physician in years. Where to find a doctor? The answer was easy: CannaMed.
When CannaMed opened in Denver in early 2008, it was one of the state's first operations devoted to helping people get medical marijuana cards. Today it bills itself as Colorado's leading medical marijuana evaluation company, with new locations in Boulder and Colorado Springs and a catchy slogan: "Can't med without CannaMed."
One of the main reasons people choose to med with CannaMed is that it can be very cheap. When Karen called, she learned that an evaluation appointment cost $200 — but CannaMed also offered a $50 "financial aid" option, which sounded ideal. So this past October, she went to CannaMed's Denver office and sat down with James Boland, the doctor working there that day. He asked Karen why she wanted medical marijuana and inquired about her knee surgery, and didn't seem to mind that she hadn't brought medical records. "It was like, down to business, boom-boom-boom," she remembers. After meeting with her for five minutes, Boland signed Karen's recommendation for medical marijuana. But he didn't give her the paperwork she'd need if she was going to apply for a medical marijuana card with the state.
Under the terms of the financial aid program, CannaMed would hold on to Karen's paperwork until she'd been assigned a caregiver — the person who, at least on paper, would be in charge of providing her with medical marijuana. Then the company would give the paperwork to the caregiver, who would help Karen fill out her application for the state and pay her $90 registration fee. According to the agreement CannaMed had Karen sign, she'd have to keep that caregiver for a year and couldn't grow any of her own medicine during that time. If she wanted out of the deal, she'd have to pay.
And until CannaMed paired her with a caregiver, Karen could shop at a CannaMed-affiliated dispensary, conveniently located next door to each CannaMed evaluation location.
Karen went home and waited for her caregiver notification. And waited. After about a month, an envelope came from CannaMed containing her medical paperwork. Since she'd been told her caregiver would deal with her application to the state, she figured this envelope contained copies. And then she got a call from a woman who said she was her official caregiver. She told Karen that she worked at a Denver dispensary separate from those associated with CannaMed, and that if Karen stopped by, she'd sell her some medicine.
Karen never did. "I was feeling kind of strange about the whole deal," she says.
A few weeks later, Karen got around to looking at her paperwork — and realized that CannaMed had sent her the originals. That meant no one had sent her application to the state, much less paid her $90 registration fee. Since her application had to be received by the state within sixty days of the doctor's signature, by this point her evaluation was no longer valid.
When she signed the CannaMed agreement, Karen wasn't told how the other half of the financial aid program works — how the company sells its financial aid patients to dispensaries and marijuana grow facilities so that these operations can show they're caring for enough patients to account for the marijuana they have on hand. Such sponsors pay up to $350 per patient, sometimes buying them from CannaMed in packs of fifty. And that's just one of several questionable CannaMed practices that former employees and patients described for Westword.
While CannaMed's owner insists that he's doing nothing wrong, his company could be on a collision course with legislation now going through the State Capitol.
CannaMed recently cut its prices to $150 for a regular visit and $29 for its financial aid option — but Karen hasn't been tempted to return, or to try any of the other operations that now offer medical marijuana evaluations. "I'm not going back," says Karen. "I feel like I've been walked on and cheated. It's just not fair."
There's one thing that David Mazin, owner of CannaMed, wants people to know more than anything else: He's not Russian mafia.
He's heard the rumors going around medical marijuana circles. "We are not Russian mafia," he says, fuming in his office at CannaMed's Denver location. "I've been fucking working thirty years of my life here. I came here in 1980, and because I'm Russian, that means I'm mafia?"
Maybe the rumors are fueled by his lifestyle, the 54-year-old Mazin suggests. The Mercedes-Benz S-class he drives, the one with tinted windows. The suits and wide-brim hat he wears. The fact that he smokes all the time. Or maybe it's because on the wall of his office, he's mounted a very realistic-looking gun below a photo of Tony Montana from Scarface.
Sure, he has money, Mazin says, but he's worked for it. He's been involved with gasoline stations, an upholstery shop, a furniture factory, a real-estate company. He dabbled in all these businesses during the years he's spent in the States, living part of that time in California and the rest in Colorado. In the early 1990s, he took a three-year sabbatical back in Russia to do public relations work for Mikhail Gorbachev, he says, and he has a photo of the former Soviet leader on his office wall to prove it.
In 2006, he opened AAA Alliance Group at 6855 Leetsdale Drive in Denver; according to information cached on the company's website, it protects property from lawsuits, expunges criminal records and issues credit to new immigrants, among other things.
Not long after he started that business, Mazin says, he heard about the THC Foundation, a nonprofit that runs medical marijuana evaluation clinics in many pot-friendly states and had just opened a location in Wheat Ridge. The foundation's mission was to fill in for Colorado physicians who were reluctant to recommend marijuana because of concerns that they'd get in hot water with the feds if they did. (After Colorado voters passed Amendment 20, in 2000, then-attorney general Ken Salazar warned physicians that participating in this state's medical marijuana program might result in federal charges.)
Mazin thought a business that provided evaluations might have promise, and in December 2008 he registered CannaMed with the state; it shares an address with AAA Alliance. (He says his company has no connection to another medical marijuana evaluation company called CannaMed that had opened in Thousand Oaks, California, two months earlier.) At the time, CannaMed was only the second medical marijuana evaluation clinic in the state, and the only for-profit one. Today there are more than a dozen, but CannaMed is reportedly the largest.
Mazin also owns two dispensaries, Medical Marijuana Connection and Boulder Kush, that are located at the CannaMed outlets in Colorado Springs and Boulder, respectively. And last fall, his brother, Jacob, opened a dispensary, Very Best Medicine, next door to the Denver CannaMed. It's in the building owned by David Mazin, and past employees say he operates as this dispensary's de facto manager. Flat-screen TVs in his office show live video feeds from all three CannaMeds and their corresponding dispensaries.
The medical marijuana empire he watches over has been suffering since August, Mazin says. That's when FBI agents raided CannaMed's Denver location as well as his personal residence as part of a crackdown on a suspected $80 million fraud scheme. Agents also hit a dozen other metro locations, hot on the trail of a nationwide scam operation in which young people, often on visas from the former Soviet Union republics, allegedly racked up purchases on credit cards obtained by fraudulent businesses, with no intention of paying for them.
"We got hurt for no reason," says Mazin, noting that while none of the four people arrested during the raid was associated with his various enterprises, agents confiscated the pot they found at the dispensary next to CannaMed, as well as medical records for more than a thousand of CannaMed's patients. Mazin's still waiting for the return of those records; he claims their seizure violated medical privacy rules established by the federal Health Insurance Portability and Accountability Act.
The fraud investigation is still ongoing, says FBI spokesman Dave Joly, adding that the medical records will be returned as soon as his agents have made copies, in case the documents prove relevant to the government's case.
Since the raid, CannaMed's revenues have dropped roughly 40 percent, says Mazin, who estimates that the business sees about 250 patients a month. On some days, he adds, no one comes in at all.
But CannaMed records obtained by Westword paint a very different picture. Intake reports suggest that the company has seen several thousand patients since August, and former employees say it's not uncommon for 70 to 120 patients to visit the Denver operation on a single Friday. "It's like you're at the freakin' DMV," reports one. A former employee of Very Best Medicine says that dispensary has boasted $10,000 days since the raid.
Competition from CannaMed "is killing us," says Scott Carr, manager at the THC Foundation. He estimates that his Colorado operation, which is now based in Denver, is doing 30 percent of the business it did last year. Even after dropping its fees from $200 to $160 per visit, it still can't compete with CannaMed's prices.
The two operations' fees used to be pretty similar. But that changed a year ago, when CannaMed launched its financial aid program.
Amendment 20 allows for each medical marijuana caregiver to possess up to two ounces of pot or six live plants for each patient they look after. So anyone who wants to open a dispensary reads that to mean they must be the assigned caregiver for enough patients to cover the amount of weed they plan to have on hand. The same goes for those who start marijuana grow facilities; the operation must have a patient for every six plants.
David Mazin says he came up with the financial aid program as a way to help fledgling medical marijuana businesses get their patients, as well as help indigent patients get their medicine.
"How can you get patients?" he asks. "Are you going to put an ad in Westword and say, 'I am looking for patients'? No. So how are you going to open your door and bring medicine to your facility if you don't have enough patients to cover the medicine?"
CannaMed had the answer: providing patient names to caregivers in exchange for $350 one-year "sponsorships" paid to CannaMed. "People have sponsorships for everything," Mazin explains. "What we're doing is good for the caregiver and good for the patients. We connect people."
Many people couldn't afford a medical marijuana evaluation without CannaMed's financial aid option, he notes: "We have many satisfied patients."
Over the past year, other medical marijuana evaluation companies such as Canna Health, Denver Longevity Clinic and Green Door Wellness Centers have adopted Mazin's concept of sponsorships. And some dispensaries have cut out the middleman altogether, hosting doctors on site and offering incentives for patients who see those doctors to make the dispensary their caregiver.
Such arrangements have helped fuel the ferocious growth of the state's medical marijuana industry. "If I am a marijuana grower and I just moved into the state and I want to make big bucks, I can just go and buy patients," says one Denver dispensary owner who says Mazin offered to sell him patients in blocks of fifty. "I can get legal today, without having to meet any of the patients."
Mazin insists that the financial aid program is only a small part of CannaMed's business, involving only 20 percent of those who come in for a doctor's appointment. Former employees, though, estimate that close to half of all CannaMed patients take the financial aid route. "You probably can't even fathom how much money was made, a lot of which came from financial aid," says one, who claims that caregivers had to buy a minimum of five patients and that some shelled out for more than a hundred. Some CannaMed employees were reportedly given a $100 bonus for every ten patients they sold.
The selling of patients doesn't sit well with Warren Edson, a prominent marijuana attorney who was one of the key people behind Amendment 20. "I know that patients need financial assistance and that these doctor visits cost a lot of money, but this feels wrong," he says. Edson likens it to Pfizer, the pharmaceutical giant, offering to pay for people's doctor visits as long as they agree to buy their pharmaceuticals from the company.
"This, to me, is not an isolated thing," says Jerry Peters, commander of the North Metro Task Force, a police narcotics team, as well as vice president of the Colorado Drug Investigators Association. "It might be an isolated business decision, but there's widespread abuse across the industry. Whether it's selling patients to dispensaries out the back door or large-scale grow operations near schools and in neighborhoods, there are so many issues that surround this industry. Part of Amendment 20 was that people could pick their caregiver, who would have significant responsibility for them. If you couldn't grow it yourself, there should be a caregiver who should provide it for you. Now they are taking that apart and telling people, 'I am going to sell your name to a caregiver that you have never met.'"
Paul Stanford, founder of the THC Foundation, believes that doctors involved in such financial aid programs may be at risk of violating federal stipulations that physicians cannot help patients obtain medical marijuana. But so far, no doctors have been charged.
"Amendment 20 did not contemplate these sorts of commercial arrangements," says Mike Saccone, a spokesman for the Colorado Attorney General's Office. Still, his office will only consider whether the practice of buying and selling patients violates state law if one of those patients makes a complaint — and so far, he says, none has.
The Colorado Department of Public Health and Environment, which maintains the state's medical marijuana registry, tries not to get involved with interpretations of Amendment 20, says spokesman Mark Salley. In August, statistics released by the department showed that fifteen doctors in the state were responsible for 75 percent of the 10,000 patients then on Colorado's medical marijuana registry. Paul Bregman, a doctor who's been working three days a week at CannaMed for the past year and a half, estimates he's seen in the vicinity of 1,750 patients and figures he might be one of those fifteen doctors. (James Boland, another doctor who works at CannaMed and saw Karen there, did not return repeated phone calls.) Because of confidentiality rules, the department cannot release the names of those doctors or confirm where they work, says Salley.
According to Chris Lines, spokesman for the Colorado Board of Medical Examiners, which oversees this state's physicians, the board hasn't received any complaints regarding doctors involved with CannaMed or other medical marijuana evaluation companies.
But former employees say that in some cases, a physician's assistant visited with patients and wrote their medical marijuana recommendations, which a CannaMed doctor later signed off on — without ever seeing the patients.
Dr. Bregman says he's never signed off on a PA's recommendation without first visiting with the patient, though he adds that he was aware that such practices were being discussed at CannaMed. "That's okay," Mazin says of having a PA write patient recommendations. "If that happened, there's nothing illegal about that."
But attorney Brian Vicente, executive director of the non-profit drug-reform organization Sensible Colorado, isn't so sure. "If the doctor does not see a patient," he says, "I think it's pretty difficult to argue that they are in compliance with the law and that they have a bona fide doctor-patient relationship."
CannaMed's financial aid program may be suffering from its own success. Although Mazin insists he has fifteen to twenty marijuana businesses waiting for patients to sponsor, several former CannaMed workers say the company now has more patients signing up for financial aid than it has dispensaries or growers willing to pay for them.
"There were patients coming in who didn't get their caregivers for months," says one of these former employees. "Now that there are so many other choices out there, CannaMed is scrambling to find caregivers." Another employee claims that if CannaMed hasn't found a sponsor for a financial aid patient by the end of the sixty-day period within which the paperwork has to be sent to the state, the patient's form is changed to reflect a more recent date.
And in the meantime, while people wait weeks or months to be assigned a caregiver, the only places they can buy pot are CannaMed stores. A CannaMed letter given to financial aid patients notes that until they're assigned a caregiver, they'll receive a CannaMed statement that "is not a legal document and can not be used to prove patient status." However, the letter goes on to note that "this document may gain you access into any CannaMed USA affiliated dispensary."
Although Westword has a copy, Mazin denies that such a letter exists.
Several patients who've gone through CannaMed's financial-aid program describe other frustrating experiences. While Mazin says patients get to pick from a selection of caregivers, some patients say they had no choice in the matter; others had trouble getting their assigned caregiver to call them back or provide them with medicine. And while Mazin insists that these patients are free to designate a new caregiver with the state any time they like, he also insists that they first repay their assigned caregiver's investment in them. "They cannot take advantage of somebody who paid $350 for them and say, 'You know what, screw you, I am going out on my own,'" he says.
Some patients may wind up shelling out even more. A contract between an assigned caregiver and a CannaMed financial aid patient obtained by Westword notes that if the patient wants to end the year-long sponsorship early, the caregiver is owed $150 plus 21 percent interest compounded daily from the day the agreement goes into effect.
Such contracts are not legal, according to Sensible Colorado's Vicente. "CannaMed can create whatever straw-man contractual agreements they want," he says. "None of it is binding in any way. What it comes down to is a patient can switch caregivers without giving notice to anyone except the state."
Vicente is also skeptical of another CannaMed practice. Patients who pay the full amount for their evaluation rather than take the financial aid option can, for an additional $50, get a "Physician's Statement Regarding Medical Cannabis." Mazin says the document, which notes that the patient has met with a CannaMed doctor, gives patients more options while they're waiting for their card from the state. "There are several dispensaries that will honor the doctor's statement instead of state paperwork," he says.
But the statement itself includes a notice warning patients that it is not a legal document and cannot be used to purchase medical marijuana without a state license. And several dispensary owners say they've refused to honor the certificates when CannaMed patients have tried to use them in their stores. "It has the exact same power as the doctor's recommendation form would have — or actually less," says Vicente. "If it really is just a statement, it's really worthless. What has the power is the recommendation form that has the doctor's recommendation."
Before Very Best Medicine and CannaMed's two affiliated dispensaries opened for business, former employees say that the company created relationships with nearby pot shops. One former CannaMed employee says the company would charge dispensaries $200 a month to advertise their services at CannaMed locations.
Westword spoke with five of Mazin's former employees, all of whom asked that their names not be used. Several describe employment arrangements that they fear could land them in legal hot water, such as being given unlimited access to the company car, the CannaVan, which is emblazoned with the company's logo, and having the option of getting paid in weed. Others say they worry that Mazin will retaliate against them. Still, at least one former employee recently reported his concerns about CannaMed to the Denver Police Department. "The department does not have an active ongoing investigation into CannaMed at this time, nor can I address whether any other state or federal agency does," says DPD spokesman Sonny Jackson.
Mazin dismisses his accusers. "Shit doesn't stay under snow," he says. "Snow always melts. Shit always surfaces."
If CannaMed's selling of patients isn't illegal now, it soon could be, if Senate Bill 109 is signed into law. That proposal, which has passed both the Senate and the House and should eventually reach the governor's desk, would place new restrictions on medical marijuana doctor evaluations and prohibit doctors from receiving financial compensation from dispensaries. "Senate Bill 109, once it's in effect, will end the practice of people being able to buy patients," says state senator Chris Romer, who authored the bill. "We wrote the bill to level the playing field and get rid of incentives."
Mazin says he's not worried. "It says nothing about sponsorships in 109," he notes. And so he plans to continue CannaMed's financial aid program.
After all, he insists, the program is designed to help its customers. "My slogan is 'One patient at a time,'" he explains. "I can't sleep at night. Why? Because I'm thinking about every little detail when a patient comes over to our facility."
To do anything else would be bad business. "There is an old saying in sales, the rule of 250," Mazin says. "What it consists of is, if you walk into a sales organization and you go to a salesperson and you tell them you need to buy a pen and they sell you a lighter." For emphasis, he picks up a pen from his desk with one hand, while with the other he grabs one of the lighters he uses to ignite his many cigarettes. "After you leave the store, you say, 'What the fuck happened? How stupid am I? I don't need a lighter, I have hundreds of them at home.' How many people will you tell of that situation? Maybe one. Why? You don't want to tell anybody he made a fool of you and sold you a lighter."
On the other hand, he says, "If you walk into a sales organization and get treated like a king and instead of paying a dollar for a pen, you pay 25 cents for a pen, how many people will you tell? At least 250.
"That's what our goal is," he concludes, gesturing with the pen to drive home his point. But his other hand is still holding fast to the lighter.
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