The business of growing pot, legally

Laura Peters | The News Leader

STAUNTON - Staunton is close to getting its own medical cannabis manufacturing and dispensary.

The Illinois-based medical cannabis company PharmaCann will open a facility at Green Hills Industrial Park off Technology Drive and Commerce Avenue.

Staunton will be home to one of five medical cannabis companies licensed to operate marijuana growing facilities in the state, according to a Virginia Board of Pharmacy decision.

PharmaCann has one year to make it all happen. The company needs to build the facility, start growing and selling.

So what does a medical cannabis company look like? How does that business work?

The production side and medical office will be completely separate, but in the same general facility. Patients coming into the medical office will not see any production — no plants, no grow rooms, nothing.

And the company is starting the site from scratch. They bought raw land in the Green Hills Industrial Park and they'll need to design the building to certain specifications, according to Matt Levine, director of new markets for PharmaCann.

"We'll design it so the patient feels like they are not walking into a industrial facility but a medical facility," he said. "There are codes that require that the patient experiences something separate."

The full facility has been proposed to be approximately 25,000 square feet at this time, according to Kate Walden, communications director for PharmaCann. Currently, about 2,500 to 4,000 square feet is earmarked for retail and the rest for production and administrative work.

PharmaCann is able to create a medical facility and a production facility because of proper zoning.

"All cannabis companies in Virginia must be co-located with retail and production together," Walden said. "We're located in an industrial area, under manufacturing."

A local construction company will likely be hired to build the facility, according to Levine.

To operate as a business, they would need between 10 and 15 employees. As the market increases, that would increase to 20 to 30 people.

How it works

Patients come into the dispensary and purchase finished, packaged products from the PharmaCann line, according to Jeremy Unruh, director of public and regulatory affairs for PharmaCann. Products come in various forms like capsules, tinctures and vape pens with replacement cartridges.

As for a price, that's still up in the air.

"Consumer pricing is unclear at this time, but patients can expect us to work as hard as we can to lower prices over time," Unruh said. "We have found that cost is a significant patient barrier. When cost is lower, more patients come into our dispensaries. Thus, we want cost to be as low as possible, so that we see more patients.

"We expect pricing to be at or near the black market level, because we want to bring people out of the black market into our legitimate market," he added.

Security

The facility is completely monitored: equipped with cameras inside and outside. Entry to any space of the building requires clearance and a keycard.

"Our security has been compared to a bank," Walden said. "Our security is even a level higher. It’s very highly monitored and maintained."

There is an electronic security system with camera and video surveillance, access control and an intrusion detection system, Unruh said.

"We also have people who are trained in security and first-responder duties," he said. "Our facilities are not manned 24/7, but our cameras record and our other electronic security systems monitor the facility 24/7."

All employees must pass a criminal background check as well as any background checks required by the state.

Growing cycle

The growing cycle for the marijuana crop is between 3 to 4 months. PharmaCann uses state-approved safe solutions on the crop to prevent pests and weeds, Walden said.

In cultivation centers they have in Illinois and New York, plants are grown in a combination of indoor and outdoor settings to allow for natural light.

The crop is protected by controlling humidity and temperature — around 70 to 75 degrees, with light-to-moderate humidity, Unruh said.

"We are still determining the type of growing facility," Walden said.

Company growth

The Staunton dispensary and production facility is just one of many PharmaCann is building.

Others include:

Michigan: 1 dispensary (more to come in 2019) and 1 production facility

Ohio: 1 dispensary and 1 production facility

Pennsylvania: 3 dispensaries and 1 production facility

Source: PharmaCann.com

PharmaCann will continue to grow thanks to a recent buy-out by another cannabis company.

California-based cannabis company MedMen recently announced it would acquire PharmaCann for $682 million, making it the largest acquisition transaction in U.S. cannabis history, a release said.

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With the combination, MedMen and PharmaCann would be licensed for 66 retail stores and 13 cultivation and production facilities, including pending acquisitions by MedMen, the release said.

“This is a transformative acquisition that will create the largest U.S. cannabis company in the world’s largest cannabis market,” said Adam Bierman, MedMen’s chief executive officer and co-founder, in a release.

This acquisition means the MedMen portfolio of cannabis licenses grows to 12 states that will permit the combined company to operate 79 cannabis facilities, the release said.

The combined company by 2030 have a total estimated addressable market of approximately $40 billion, the release said.

“PharmaCann has built highly-efficient cultivation centers and dispensaries to promote a better quality of life for medical marijuana patients,” said Teddy Scott, Ph. D., PharmaCann chief executive officer in a release. “This acquisition validates the dedication and level of sophistication we have used to provide consistent patient outcomes.”

MedMen will add licenses in Illinois, New York, Pennsylvania, Maryland, Massachusetts, Ohio, Virginia and Michigan, the release said.

Reporter Monique Calello contributed to this report.

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Follow Laura Peters @peterslaura and @peterpants. You can reach her at lpeters@newsleader.com or 213-9125.