Millions to be invested in new Michigan operations
Medical marijuana has been a recent hot topic in many southwest Michigan communities. And it’s about to become big business here, too.
Two proposed ventures for Buchanan could bring investments of $500,000 to $1 million to the small town.
And even larger, multimillion-dollar commercial cannabis operations in this blossoming industry recently decriminalized by the state of Michigan are being proposed for Galien Township.
For this rural community, it could amount to an economic shot in the arm — in property tax payments and jobs alone — if MedFarm of Michigan opens its midsized grow operation and processing plant here.
MedFarm’s land broker Stephen Ratcliff of West Lafayette, Ind., said MedFarm considered three other Michigan communities before setting its sights on Galien Township.
If its business plan proceeds, it’ll initially invest about $2 million here and create several jobs with base pay rates ranging from $15 to $20 per hour, in addition to a $60,000-per-year position for a grow master.
While such an investment could be a boon for Galien Township — which has only $256 left in surplus after balancing its budget for this fiscal year — some who live here don’t think it’s worth the risks.
“As far as I’m concerned, it’s like selling yourself for prostitution,” longtime resident Paul Palmer told the Galien Township board of trustees at a recent meeting. Other opponents have said they’re concerned about potential pollution and security at sites that grow, process or sell marijuana.
However, others think the opportunity is too good to pass up.
“Are we going to miss the next boat, when it comes, for an opportunity for this community to make money?” Steve Rochman asked the township board recently. “All I’m saying is, in the 15 years I’ve been in Galien, that everything is going away. There’s nothing here. What would you possibly have against this town making money, I don’t understand.”
The issue has come to the forefront since the state passed a trio of new laws last year that allow commercialized cannabis operations like dispensaries that sell medical marijuana, along with marijuana grow and processing operations.
In addition to property taxes, communities that opt into the new state legislation also stand to gain a share of the 3 percent tax levied by the state on the receipts of the dispensaries. Of the money collected from the tax, 25 percent would be split among all municipalities with at least one of the five types of allowed medical marijuana facilities.
Even if opposition from segments of the communities doesn’t stop or slow down medical marijuana industry entrepreneurs, plans for commercial cannabis businesses could be thwarted if the communities’ government leaders later decide to opt out of the 2016 legislation.
But so far, the southwest Michigan communities, which opted into the 2016 legislation — such as Buchanan and Niles — appear to be moving forward with crafting local ordinances to allow medical marijuana businesses.
“We need them to be classy and we want to keep it real,” Buchanan Mayor Brenda Hess said about any medical marijuana business coming to the city. “We need to ensure that this is done well. We owe it to the citizens.”
Commercially produced and sold medical marijuana is new to Michigan. But the state already has a law in place allowing for small-scale, noncommercial growth and cultivation of medical marijuana.
Per the 2008 Michigan Medical Marijuana Law, card-carrying medical marijuana patients can grow up to 12 plants for personal use. Registered caregivers can grow for up to five people (including himself or herself), no more than 12 plants per person.
The 2016 legislation does not affect the 2008 law.
“The new laws call for mandatory testing of the marijuana to check for safety compliance with safety rules,” said Carie O’Donnell, a New Buffalo real estate agent who is interested in becoming a medical marijuana entrepreneur. “When someone is growing it in their homes or pole barns for others, you don’t know what kind of nutrients or pesticides they are putting on their plants.”
But even with state regulations, medical marijuana businesses are strongly opposed by some.
“If a major pharmaceutical company would build a $10 million facility to produce painkillers,” Ratcliff said, “that company would be welcomed with open arms. What’s the difference between that and what the people I represent want to do?”
A look at the potential suitors
MedFarm of Michigan — also the proposed name of the business — is an investment group of 11 farmers from northern Indiana and southwest Michigan. Ratcliff, the land broker for the would-be business, said the investors do not want to publicly disclose their names.
Customers for grow operations are typically processing plants, which sell their product to dispensaries. Customers for dispensaries (retail centers) are typically the end-users: medical marijuana card carriers and registered caregivers.
MedFarm is hoping to create a niche as a business-to-business supplier to dispensaries in large metro areas such as Detroit, Grand Rapids and Kalamazoo, places where local ordinances might prohibit grow operations, Ratcliff said.
O’Donnell is also eyeing Galien Township as a home for her medical marijuana business. Great Lakes Healing LLC is planned as a grow operation and processing plant on the same site. O’Donnell even has future plans for a second operation. She declined to disclose where in the township those businesses would be located.
Getting her company going is likely to require an investment of about $5 million initially, O’Donnell said.
Between both locations, there would be 35 to 50 workers with a pay rate ranging from $15 to $25 per hour. Upper-level staffers, such as grow masters, would be able to earn as much as $150,000 per year at Great Lakes Healing, she said.
“There’s a need for jobs there,” O’Donnell said about Galien Township, adding that she would like to look first to community for workers. “I’ve already had about 10 people from the Galien area approach me for jobs.”
Ratcliff said MedFarm would also like to look to the Galien area when staffing its business.
Despite the willingness to invest millions of dollars into their proposed medical marijuana businesses, the MedFarm investors and O’Donnell are not banking on instantly raking in the profits and reaping high sales totals.
“We’re expecting to be at a loss for the first two years,” O’Donnell said of Great Lakes, adding that she expects her clients to come from all over southwest Michigan. “It won’t be profitable until we build our clientele. After that, we hope to eventually clear $500,000 a year.”
As far as MedFarm’s sales expectations, “the market will tell,” Ratcliff said. “There’ll be some times when the market (supply) is short and prices will go up, and those times when there’s a glut and prices will go down. This is an agricultural commodity.”
Article Originally Posted on South Bend Tribune. Article by Landa Bagley – Original Article