CARMICHAELS – There appears to be new life for the embattled medical marijuana growing and processing operation in Greene County two years after the facility was shut down by the state Department of Health.
After a new owner was able to get the operating permit renewed this spring, a blockbuster merger is now in the works to acquire that company in a mega-deal that will likely get the facility growing again.
Arizona-based Harvest Enterprises announced in early May that it had reached a settlement with the state for a conditional agreement to restart growing at the Cumberland Township facility after the original operator, AGRiMED Industries of PA LLC, lost its permit in July 2019.
Four days after reaching the settlement for the renewed permit, Harvest and Trulieve Cannabis Corp., of Tallahassee, Fla., held a joint news conference May 10 announcing Trulieve had acquired Harvest and its assets – including the Greene County facility – for $2.1 billion in stock shares. The acquisition was first reported by the Pittsburgh Post-Gazette.
Representatives for both Harvest and Trulieve could not be reached for comment Tuesday. It was not known when the acquisition will be completed or when the facility at 280 Thomas Road between Carmichaels and Nemacolin could begin producing medical marijuana again, but it appeared to be good news for an operation that has run into a string of issues over the past four years.
AGRiMED won the permit to grow and process medical marijuana in June 2017 – one of 12 across Pennsylvania to be approved at the time – and broke ground in October of that year at the 61-acre parcel where a coal-waste power plant had previously been proposed. AGRiMED initially said it would invest $25 million to develop the growing operation and would employ about 60 people after constructing the 16,000-square-foot building, with plans to expand to an 80,000-square-foot facility.
But the company ran into immediate issues when it was revealed a month after the ground-breaking that the company’s chief executive officer, Sterling Crockett, failed to include in background information in the permit application about his conviction in New York in the late 1990s on a misdemeanor charge connected to an alleged scheme to use minority-owned companies to gain government asbestos-removal contracts. Crockett called the omission a mistake and amended the license application.
Over the next few months, multiple contractors who helped to build the facility filed mechanic’s liens against the company, all of which were settled by August 2018.
Less than a year later, however, a surprise inspection by state health officials “found numerous violations” at the facility, prompting the health department to issue a cease and desist order. The inspection revealed that the company did not have records showing how or when it destroyed mature marijuana plants that were never processed. Security cameras often were also not functioning, the inspection showed.
The health department declined to renew the operation’s permit in July 2019.
By that time, Harvest Enterprises had already acquired AGRiMED for $12.5 million and its Cumberland Township property for an additional $5 million in May 2019, according to the company’s 2020 report to the federal Securities and Exchange Commission.
State Rep. Pam Snyder said she was “extremely excited that this project can finally get back underway to provide an economic boost” to Greene County. But she also criticized the health department for its decision to deny the permit renewal two years ago, along with an investigation that showed no criminal activity with the manner in which the plants were disposed.
“The Department of Health has made a debacle of this situation, which includes falsely accusing the facility of missing marijuana,” said Snyder, D-Jefferson. “After a full investigation by the Pennsylvania State Police it was determined the regulatory accusations were unfounded, no marijuana was diverted, and no criminal activity occurred.”
Officials with the Department of Health did not respond to a phone message seeking comment Tuesday afternoon. The terms of the settlement in May to renew the permit were not immediately available.
Harvest is a multi-state company with 51 dispensaries in seven states, including 11 in Pennsylvania. It also operates 17 cultivation or manufacturing plants, although the 2020 SEC report does not list the Greene County facility as one of them. The impending sale to Trulieve is expected to set up a massive growing and distribution operation, with 22 cultivation and processing facilities and 126 dispensaries nationwide, according to a joint press release from the companies.
“I’m hopeful under new ownership that this facility will bring the jobs and economic boost promised several years ago,” Snyder said.