The race is on to be Ohio's first legal pot farmers

Ohio's weed rush has begun

MONROE, Ohio - Glen Meert peers over a thick patch of towering crab grass, pointing to a sprawling field of soybeans.

"This is my land of opportunity,” he said of his dreams for the 21-acre field just off state Route 63 in Monroe. 

The Indian Hill resident is among hundreds of investors risking big bucks for a chance to get in on what they hope will be Ohio's next cash crop: medical marijuana.

"I've been working on this plan for more than three years," said Meert, who wants to turn his field of soybeans into a 100,000-square-foot medical marijuana research and growing facility. "I feel really good about our chances."

Glen Meert, of Real Growth Investments, LLC, stands at the edge of a 21-acre field in Monroe where he wants to build a medical marijuana cultivation campus. | Photo by Lisa Bernard-Kuhn

Earlier this month, Ohio announced the names of the first 11 businesses that have won the right to grow the newly legal drug.

In the coming weeks, up to 12 more business licenses will be awarded to applicants who, like Meert, have proposed large growing operations -- spanning at least 25,000 square feet. 

"This is probably the biggest moment for the program since Ohio passed the bill to legalize medical marijuana back in 2016, because now we're finally getting our fist look at who is going to be running these businesses," said Thomas Rosenberger, executive director of the National Cannabis Association of Ohio, a Columbus-based trade group.

For the budding entrepreneurs who do land a license, the possible payoff is winning a slice of what’s expected to be one of the largest medical marijuana markets in the U.S.

“Ohio is a key part of the future of the medical marijuana industry, just given its massive size, in terms of population and the estimated revenue,” said Chris Walsh of Marijuana Business Daily, a Colorado-based news and research firm. “The companies that win licenses there are going to be able to tap into an incredibly huge market.”  

 Ohio is under a Sept. 8, 2018, deadline to ensure its program is up and running with medical pot products on dispensary shelves and ready for patients. Whether that deadline will be met depends largely on what happens in the coming months, Walsh said.

"In other states we've seen delays by things like a lawsuit that gets filed by someone that wasn't awarded a license or some other piece of the program gets bogged down," Walsh said. "This is a very big step for Ohio, but it doesn't mean that it's going to be smooth sailing from here on out."

From soybeans to field of dreams

As investors like Meert wait for a green light from the state on their business proposals, hundreds of millions of dollars hang in the balance.

To get this far, Meert has already spent nearly $250,000 to cover a variety of costs, including architectural drawings, building permits and fees the state requires to file his application. 

Ohio has set some of the highest fees of any state that has legalized medical marijuana.

The funds will go to cover the costs associated with ensuring the new industry complies with Ohio’s rules – a job that the newly created Ohio Medical Marijuana Control Program will lead.

For large growers with operations of up to at least 25,000 square feet, the initial application fee is $20,000, with a $180,000 annual licensing fee. Smaller growers -- those with operations 3,000 square feet and under -- must pay a $2,000 application fee and an $18,000 license fee annually. Those who apply and don’t make the cut lose their application fee.

Also part of the application process, growers must present documentation detailing their business plans, quality control plans, on-site security and their financial support plans.

Here's a look at the state's scoring guide that's being applied to the more than 100 cultivation applications filed.

Scoring Reference Guide by Lisa Bernard-Kuhn on Scribd

 

Among other state mandates: Large growers must show they have at least $500,000 in liquid assets, and small growers must have at least $50,000 in assets.

Getting the new pot ventures off the ground, however, will take even more cash than that, Meert said.

"Some people already have buildings that they'll need to retrofit," he said. "Others -- like me -- will have brand new facilities to build."

Meert has raised $15 million from other Cincinnati-area investors who will have a stake in his firm Real Growth Investments Inc., should the venture win a license. 

“It’s taken a ton of money to get this far, and I’m still just one of the smaller guys in all this,” Meert said. 

A look at the locals in Ohio's weed rush

Aside from Meert, a handful of other Cincinnati-based ventures are also in the running to be among the first to grow legal pot in Ohio.

Cincinnati-based entrepreneur James Gould has submitted plans for a nearly 20-acre medical marijuana campus in Wilmington, Ohio, that will house indoor growing space, a manufacturing facility and a research center.  

Gould is chairman of Green Light Acquisitions, a holding firm for marijuana-related ventures and the lead group behind the proposed plans in Wilmington.

“In a way, we’re like prospectors out there drilling for oil,” Gould told WCPO earlier this year. “But what we’re looking for is a way to take this plant and use it to alleviate a lot of pain and suffering.” 

In Cincinnati’s Camp Washington neighborhood, Rhinegeist co-founders Bob Bonder and Bryant Goulding are behind a proposal to turn part of the former Kahn's facility on Spring Grove Avenue into   50,000-square-foot medical marijuana growing operation and dispensary.

Former Sara Lee/Kahn’s site on Spring Grove Avenue in Camp Washington. The site is now empty, ready for new development.

The venture, Nature's Apex, would operate separately from the duo’s successful craft beer brewing business they launched together in 2013 in Over-the-Rhine.

Half of the site, about 8 acres, would be used for an expanded refrigeration and storage Rhinegeist needs as it ramps up its distribution of its popular craft beers. The other half would house the medical marijuana operations – which Colorado-based MJardin would operate. 

“They’re among the most experienced in the country,” Bonder told WCPO, adding that the group owns manufacturing and retail operations in Colorado.

Bob Bonder and Bryant Goulding

Meanwhile, Hemma LLC is the first Cincinnati-area company to win a license from the state. The firm is headed by Cincinnati residents Elizabeth Van Dulman and Meghan Arata, who are planning a smaller cultivation operation -- about 3,000 square feet -- inside a former warehouse on Edison Drive in Monroe, which is less than two miles from Meert's proposed operations. 

Whether Ohio's Commerce Department will chose to award two cultivation licenses in Monroe isn't a question that's keeping Meert awake at night. 

"I'm not too concerned at all," Meert said. "This could become a medical marijuana corridor, which would be great. At the end of the day, I'm still Glen, and this is still America. There's plenty of opportunities for me."

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