By Mike Lewis
Three medical marijuana businesses are looking to grow in Washington County, Md.
Kind Therapeutics is expanding its operating space to its growing and processing plant in Hagerstown. Company President David W. Kloos told a chamber of commerce gathering recently that the company employs about 64 people and will add 15 to 20 more because of the expansion.
Harvest Health and Recreation, which has a growing operation in Hancock, has received a processor license from the state and plans to start that operation in another building in Hancock. Company CEO Steve White said Harvest employs more than 50 people in Hancock and hopes to double that number in the coming months.
Maryland Cultivating and Processing LLC recently filed for a building permit for $2.5 million in renovations to property on Hagerstown’s West End so it can begin growing medical cannabis there.
Of the three, Arizona-based Harvest has made international business news in recent months. During a recent visit to Hancock, White said the company plans to “aggressively grow.”
Late last year, the company made its debut on the Canadian Securities Exchange. According to published reports, it raised $218 million ahead of its listing.
In March, Harvest announced an agreement to acquire Verano Holdings LLC in an all-stock transaction for an estimated price of $850 million.
On April 4, the company announced that it entered into an agreement for a brokered private sale of up to 500,000 convertible debentures at a price of $1,000 per debenture, for gross proceeds of $500 million. At the time, White said the transaction “is fuel for growth to realize our vision of becoming one of the most valuable cannabis companies in the world.”
On April 9, the company entered into an agreement to acquire CannaPharmacy Inc. The deal is subject to customary closing conditions, including regulatory approvals in the relevant states. CannaPharmacy owns or operates (through management companies) cannabis licenses in Pennsylvania, Delaware, New Jersey and Maryland and holds a minority interest in a pending licensee in Colombia.
Upon closing of the Verano and CannaPharmacy transactions, Harvest will hold licenses allowing it to operate up to 213 facilities, including 130 retail dispensaries, in 17 states and territories.
“There’s more to come,” White said.
Like Harvest, Kind is “vertically integrated,” meaning it has facilities to grow, process and sell medical cannabis under Maryland laws and regulations.
Some practical business questions about the ventures came up when two Kind Therapeutics representatives, Kloos and head grower Michael Castleman, spoke at a recent gathering of the Washington County Chamber of Commerce.
Marijuana is still an illegal, Schedule I drug under federal law. And so medical marijuana patients can’t pay with credit cards, Kloos said.
“Right now it’s mostly cash,” he said, although some options are coming online.
Likewise, many financial institutions are wary of running afoul of federal law and shy away from medical cannabis companies, he said.
Still, he said, some financial institutions have dipped their toes into the medical cannabis world. Through those institutions, among other options, companies like Kind Therapeutics have been able to acquire capital for their ventures.
The business people at the chamber gathering also sought advice on dealing with employees who are certified to use marijuana.
“Employers have to look at this,” Kloos answered. He urged companies to develop policies about medical cannabis, as they would for employees taking other medications.
“Are they coming to work dysfunctional?” he asked.
Meanwhile, Maryland Cultivating and Processing LLC is looking to get up and growing on the west side of Hagerstown.
According to city officials, the company plans a two-phase project at the 12-acre site. The first would be renovations to an existing 36,000-square-foot warehouse. The second phase would include construction of a 45,000-square-foot glass-roofed greenhouse on a pad-ready site adjacent to the existing building. A 13,000-square-foot pond to catch rainwater and reuse run-off from the facility’s roof is part of the plan.
Andras Kirschner, who co-owns the venture with business partner Edward Weidenfeld, wrote in an email that they plan to start construction as soon as permits are approved.
“We are striving to have the indoor grow be operational by mid July,” Kirschner wrote. “We are hoping the site plan for the greenhouse is approved in the near future.”
C.J. Lovelace of Herald-Mail Media contributed to this report.