Greene County pot farm resolves licensing issues as Pennsylvania market roars
Sales of legal pot are booming in the U.S. with the Pennsylvania market projected to reach $1 billion in 2021, as a patch of rural Greene County turns into a crossroads for medical cannabis companies on opposite sides of the country.
Just in time for the industry’s growth spurt was settlement of licensing issues at a Cumberland Township cultivation and processing facility near Carmichaels, which could create jobs in a region where idled coal mines threw the local economy into a tailspin years ago.
Seed-to-sale medical marijuana company Harvest Health & Recreation Inc., of Tempe, Ariz., reached a settlement with the state health department over violations at AgriMed Industries of PA LLC’s cultivation and processing operation, opening the door to expanded operations. The settlement allows for the conditional renewal of AgriMed’s permit and increased production of medical marijuana, Harvest Health announced in May.
Harvest Health acquired AgriMed in May 2019 for $12.5 million, plus $5 million for its 61-acre tract, just south of Carmichaels.
But the settlement with the health department is just the start. In the go-go merger-and-acquisitions world of medical marijuana, Trulieve Cannabis Corp., of Tallahassee, Fla., is preparing to acquire Harvest Health for an all-stock deal valued at $2.1 billion, which would bring the Greene County operations under the same umbrella as three others in and around Pittsburgh.
Settlement agreement
For a while, things were not looking so bright for the Greene County facility.
During an unannounced inspection by the health department in June 2019, plant operators were unable to produce required records showing how and when the Carmichaels facility destroyed mature marijuana plants or to provide security camera footage showing destruction of the plants.
In what the state health department called “troubling circumstances,” inspectors learned from plant officials that more than 4,000 marijuana plants had been destroyed and discarded with municipal waste.
“However, visual inspection revealed that the dumpster, which was in an area seemingly inaccessible by trucks, showed no evidence of garbage, dirt or debris,” according to health department findings contained in a July 29, 2019, letter to the company that denied renewal of the company’s permit to operate. Other violations included incomplete visitor logs and inadequate security.
The violations resulted in a cease-and-desist order by the health department. The order allowed continued cultivation of marijuana but prohibited the extraction of anything from the plants without the presence of a state inspector.
“Lapses in security cannot and will not be tolerated,” then-Secretary of Health Rachel Levine said in a statement.
Without proper record-keeping, the health department worried marijuana had been diverted from the facility. That concern was not substantiated by a “lengthy investigation” by the state police, according to a settlement agreement AgriMed signed with the health department in August 2019.
To avoid litigating the violations, AgriMed paid the state $100,000 and received its operating permit.
The Greene County facility is among 34 cultivation/processor centers that have been issued since marijuana was legalized in 2016 in Pennsylvania for an assortment of medical problems, including cancer, anxiety and autism. Recreational use of pot is not legal, despite Gov. Tom Wolf’s support of the idea.
Local officials welcomed the news — and the jobs that were promised — when AgriMed broke ground for its facility in 2017. Resolution of its licensing issues in May came as the MJBizFactbook projected Pennsylvania medical marijuana sales will reach $775 million to $925 million in 2021, up from $475 million to $600 million in 2020.
Seattle-based Headset, a cannabis analytics firm, was even more bullish, estimating sales in Pennsylvania would exceed $1 billion.
In June 2017, AgriMed received a permit to cultivate and process medical marijuana at a 16,000-square-foot facility on land once owned by Buckeye Coal Co., which operated the nearby Nemacolin deep coal mine until 1988 when it was sealed. Groundbreaking for the pot farm was held in October 2017.
AgriMed co-founder Sterling Crockett said Thursday an 80,000-square-foot facility had been planned at the Cumberland Township site, which would’ve created more than 50 jobs in an economically depressed part of the state. Licensing issues stalled the project.
Neither Carmichaels nor Cumberland Township officials were available for comment.
Harvesting companies
In the latest twist, Trulieve Cannabis Corp. announced in May it was acquiring Harvest Health for about $2.1 billion in an all-stock deal. Combined, the companies will have operations in 11 states, including 22 cultivation and processing facilities with a total capacity of 3.1 million square feet and 126 dispensaries serving both the medical and adult-use recreational cannabis markets.
The tie-up will “create the largest U.S. cannabis operator on a combined retail and cultivation basis and the most profitable multi-state operator on an adjusted EBITA basis,” according to Cowen Research.
Officials at Trulieve and Harvest Health did not respond to inquiries.
Trulieve is the biggest cannabis cultivator and retailer in Florida, and Harvest Health is the biggest cannabis operator in Arizona. The company, which calls its customers “Trulievers,” operates three dispensaries in the Pittsburgh area under the Solevo Wellness banner in Squirrel Hill, Washington and Zelienople.
Trulieve has been active elsewhere in a rapidly consolidating industry, in April acquiring Anna Holdings LLC, a dispensary license operating under Keystone Shops, with stores in Philadelphia, Devon and King of Prussia, and Solevo Wellness West Virginia and its three dispensary permits.
Kris B. Mamula: kmamula@post-gazette.com or 412-263-1699
First Published July 13, 2021, 5:47am
Very interesting stuff I would think we fit in this some where
TOODLES
Sales of legal pot are booming in the U.S. with the Pennsylvania market projected to reach $1 billion in 2021, as a patch of rural Greene County turns into a crossroads for medical cannabis companies on opposite sides of the country.
Just in time for the industry’s growth spurt was settlement of licensing issues at a Cumberland Township cultivation and processing facility near Carmichaels, which could create jobs in a region where idled coal mines threw the local economy into a tailspin years ago.
Seed-to-sale medical marijuana company Harvest Health & Recreation Inc., of Tempe, Ariz., reached a settlement with the state health department over violations at AgriMed Industries of PA LLC’s cultivation and processing operation, opening the door to expanded operations. The settlement allows for the conditional renewal of AgriMed’s permit and increased production of medical marijuana, Harvest Health announced in May.
Harvest Health acquired AgriMed in May 2019 for $12.5 million, plus $5 million for its 61-acre tract, just south of Carmichaels.
But the settlement with the health department is just the start. In the go-go merger-and-acquisitions world of medical marijuana, Trulieve Cannabis Corp., of Tallahassee, Fla., is preparing to acquire Harvest Health for an all-stock deal valued at $2.1 billion, which would bring the Greene County operations under the same umbrella as three others in and around Pittsburgh.
Settlement agreement
For a while, things were not looking so bright for the Greene County facility.
During an unannounced inspection by the health department in June 2019, plant operators were unable to produce required records showing how and when the Carmichaels facility destroyed mature marijuana plants or to provide security camera footage showing destruction of the plants.
In what the state health department called “troubling circumstances,” inspectors learned from plant officials that more than 4,000 marijuana plants had been destroyed and discarded with municipal waste.
“However, visual inspection revealed that the dumpster, which was in an area seemingly inaccessible by trucks, showed no evidence of garbage, dirt or debris,” according to health department findings contained in a July 29, 2019, letter to the company that denied renewal of the company’s permit to operate. Other violations included incomplete visitor logs and inadequate security.
The violations resulted in a cease-and-desist order by the health department. The order allowed continued cultivation of marijuana but prohibited the extraction of anything from the plants without the presence of a state inspector.
“Lapses in security cannot and will not be tolerated,” then-Secretary of Health Rachel Levine said in a statement.
Without proper record-keeping, the health department worried marijuana had been diverted from the facility. That concern was not substantiated by a “lengthy investigation” by the state police, according to a settlement agreement AgriMed signed with the health department in August 2019.
To avoid litigating the violations, AgriMed paid the state $100,000 and received its operating permit.
The Greene County facility is among 34 cultivation/processor centers that have been issued since marijuana was legalized in 2016 in Pennsylvania for an assortment of medical problems, including cancer, anxiety and autism. Recreational use of pot is not legal, despite Gov. Tom Wolf’s support of the idea.
Local officials welcomed the news — and the jobs that were promised — when AgriMed broke ground for its facility in 2017. Resolution of its licensing issues in May came as the MJBizFactbook projected Pennsylvania medical marijuana sales will reach $775 million to $925 million in 2021, up from $475 million to $600 million in 2020.
Seattle-based Headset, a cannabis analytics firm, was even more bullish, estimating sales in Pennsylvania would exceed $1 billion.
In June 2017, AgriMed received a permit to cultivate and process medical marijuana at a 16,000-square-foot facility on land once owned by Buckeye Coal Co., which operated the nearby Nemacolin deep coal mine until 1988 when it was sealed. Groundbreaking for the pot farm was held in October 2017.
AgriMed co-founder Sterling Crockett said Thursday an 80,000-square-foot facility had been planned at the Cumberland Township site, which would’ve created more than 50 jobs in an economically depressed part of the state. Licensing issues stalled the project.
Neither Carmichaels nor Cumberland Township officials were available for comment.
Harvesting companies
In the latest twist, Trulieve Cannabis Corp. announced in May it was acquiring Harvest Health for about $2.1 billion in an all-stock deal. Combined, the companies will have operations in 11 states, including 22 cultivation and processing facilities with a total capacity of 3.1 million square feet and 126 dispensaries serving both the medical and adult-use recreational cannabis markets.
The tie-up will “create the largest U.S. cannabis operator on a combined retail and cultivation basis and the most profitable multi-state operator on an adjusted EBITA basis,” according to Cowen Research.
Officials at Trulieve and Harvest Health did not respond to inquiries.
Trulieve is the biggest cannabis cultivator and retailer in Florida, and Harvest Health is the biggest cannabis operator in Arizona. The company, which calls its customers “Trulievers,” operates three dispensaries in the Pittsburgh area under the Solevo Wellness banner in Squirrel Hill, Washington and Zelienople.
Trulieve has been active elsewhere in a rapidly consolidating industry, in April acquiring Anna Holdings LLC, a dispensary license operating under Keystone Shops, with stores in Philadelphia, Devon and King of Prussia, and Solevo Wellness West Virginia and its three dispensary permits.
Kris B. Mamula: kmamula@post-gazette.com or 412-263-1699
First Published July 13, 2021, 5:47am
Very interesting stuff I would think we fit in this some where
TOODLES
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