PA: Philly’s Future – Inside A $25 Million Marijuana Empire


Denver – After spending nearly a decade as a high school biology teacher, Tim Cullen cashed out on his retirement. It was 2009, and he had $80,000 to invest in his newly-formed medical cannabis growing operation in Denver. He hoped one day he’d make a profit.

Seven years later, the Colorado Harvest Company and its partner company Open Vape, which manufactures marijuana e-cigarettes, is worth an estimated $25 million. Cullen is a 44-year-old dad – a clean-cut, well-dressed CEO who drives an $80,000 Lexus that reads “LS 420” instead of “LS 460” on the back.

Welcome to Marijuana, Inc. Cullen’s is a massive operation with 55,000 sq. ft. of growing space, three storefronts with more on the way and enough capital that he and his business partner put a bid in for Open Vape to win the naming rights of the stadium where the Denver Broncos play. (They were denied. It is not called “Open Vape Field at Mile High Stadium.”)

For Cullen, it’s business as usual.

“I wake up every day, have breakfast with my family, come in, commit [federal] felonies all day, go home, have dinner with my family, go to bed,” he said, “and do it all again the next day.”

Welcome to the future of the weed business in Pennsylvania – and, likely, Philadelphia – now that medical marijuana has been legalized. They’re people who, in many cases, started out in the marijuana business because the drug was legalized elsewhere and they saw a legitimate business opening. Others are physicians or medical professionals who feel passionately about the benefits cannabis can have for patients.

In Denver, the stigma surrounding marijuana has weakened, especially since recreational use was legalized via a referendum in 2012, ushering in an industry worth a billion dollars a year. The unmistakable smell wafts through the air in the downtown area. The middle-aged mother driving my Uber in Denver said nothing in her life changed when marijuana was legalized. Dispensaries with green crosses on the front dot the most well-traveled streets in the city.

The same can’t be said for Pennsylvania. The stigma around marijuana persists, even as more than 80 percent of the state was in favor of legalizing medical. And as the state Department of Health is still figuring out how exactly it’s going to regulate the medical marijuana industry in Pennsylvania, concerns have remained about the business infrastructure medical cannabis might require.

Will a dispensary be on every corner? Will massive marijuana growing operations be robbed and fall victim to organized heists? Will children be exposed to cannabis, or will they think using the drug is healthy or otherwise legal? What can we, as Pennsylvanians, reasonably expect?

Philadelphia is not Denver. And it’ll be a long time until it will be Denver. But the infrastructure in the Mile High City offers a glimpse – even a small one – into what might end up here.

Inside a pot farm
The Colorado Harvest Company grew 238 pounds of marijuana in 75 different strains last month at a growing operation tucked away in an unmarked, 10,000 sq. ft. building off a winding road in south Denver. The inside looks like every other warehouse you’ve seen (except federally illegal drugs are being grown there).

The security here is tight. There are 45 cameras and armed security 24 hours a day. But Cullen said while they were worried about “Mission: Impossible,” that’s not the break-in attempts they’ve seen.

“It’s drunk 20-somethings beating the door handle with rocks,” he said. “You know what happens when you knock a door handle off? It’s not like in the movies. The door handle just comes off. And then you just can’t open the door.”

We signed in, put on our visitor badges, and walked through a narrow hallway. Cullen pulled open a heavy door, and we walked into a room with bright white lights that was filled with cannabis plants. It was loud – the ventilation system ensures the entire place doesn’t smell like Seth Rogen’s office. It was temperature controlled. It was so clean you could eat off the floor.

Cullen led us into a second room, where he said the plant’s life begins not with seeds, but with clippings from other marijuana plants. Tiny baby cannabis plants being pumped with a special blend of nutrients – you’ll never learn Cullen’s secret cocktails – sit on shelves in the corner. As they grow into what Cullen calls “toddlers” and “teenagers,” they’re moved throughout this room.

Every plant (save for the babies) is labeled either “recreational” or “medical” from the time they’re small. Each plant has a bar code and a label with the strain, and every plant’s life is meticulously tracked from start to sale. About 80 percent of the plants are recreational, 20 percent medical. What’s the difference?

When it comes down to the plant, there is no difference, Cullen explains. But in Colorado, growers pay a $300 per pound excise tax on recreational – not on medical. So, every plant is tracked. Colorado Harvest Company grows strains that come from both major types of marijuana. There’s sativa, which gives the user a body high, a creative feel.There’s indica, which is associated with a calming, relaxing feeling.

Plants are later moved into the “vegetative growth” stage. They’re a little larger now, and they’re still under the white lights, or what Cullen explains as “spring” season. They’re treated like people, with meal times and temperature preferences. Light is on for 18 hours a day, off for six.

After about two months in springtime, the plants are moved into one of eight “flowering rooms.” Here, they’re situated so that growth happens atop a bed of fencing and golf-ball sized flowers begin to grow on the plants. The high-pressure sodium lamps in this room emit heat at 450 degrees, so cold air is pumped into the room to control the temperature and mimic the feel of the wind.

Carbon dioxide is controlled. Mold and mildew is monitored. Water and nutrient delivery is automated. Pests are controlled with organic mixes like concentrated mint or cayenne. More than a dozen workers come in and out each day to check for pests, trim the plants and ensure the nutrients are being delivered efficiently.

Two months later, this bud’s ready for harvesting.

The flowers are cut and the cannabis dries in a cold room of shelves for a week. No human hands have touched the marijuana at this point, at least not without gloves on. Then, the marijuana that’s still separated by strain is cured for a week. Finally, it’s hand-weighed and packaged in labeled mylar containers – ready to be shipped off to another location for sale or further processing.

In all, this process takes about six months. That means tiny marijuana plants starting out now won’t be up for sale until March 2017.

Show us the green
Traditionally, it’s been harder to pass marijuana reform legislation in red states, or places like Pennsylvania where Republicans control the legislature. The argument was always something like: “Marijuana is a gateway drug” or “medical legalization is a slippery slope.” But the science has changed. The attitudes have, too. There’s massive economic growth potential in marijuana.

In Colorado, it’s become a billion-dollar industry. Marijuana is taxed at a hefty 22 percent at the point of sale, and growers are responsible for that $300 per pound excise tax on recreational weed. The cash infusion has been used for popular programs like improving schools.

Colorado Harvest Company has its own impact. It employs about 80 people. Massive and intricate lighting structures – some of which burn at a huge 1,000 watts – means one growing operation costs $13,000 a month in electricity costs. Independent testing labs in the state are needed for quality control.

And while the black market remains Colorado Harvest Company’s largest competitor, Cullen said he’s found over the years that people are willing to pay a 22 percent tax for a premium service: Quality marijuana, bought legally from people who know what they’re talking about.

Of course, the concern among even the largest growers in Colorado is that one day Big Tobacco is going to want to get in on the marijuana game – at least once they feel comfortable the feds aren’t going to shut them down. (Cannabis remains a federal schedule 1 drug, right up there with cocaine and heroin.)

Cullen says if Big Tobacco wants to get in the game, let ’em. Like craft beer or eating local, people will still want to pay a bit more for something they know is, as Cullen says, “more organic than organic.”

“If Marlboro wants to make mass-produced product,” he said, “let them have it. We have zero desire to be Marlboro.”

The economic impact in Colorado skyrocketed when recreational was legalized. On Jan. 1, 2014, thousands of people lined up at Colorado Harvest Company’s dispensaries. The top brass at the company had to buy theater ropes and heaters to keep people in what had become three-hour lines. Transactions happened in less than a minute, and a purchase cap was put on at an eighth of an ounce while more product was being grown.

That won’t happen in Pennsylvania with medical marijuana. Sales will be tightly regulated and will only be made to card-carrying patients with a specific 17 conditions who had a doctor’s recommendation and were supplied a card by the state Dept. of Health.

Still, there will be serious cash involved.

Just to apply, dispensaries must pay a $5,000 fee while growers/processors pay $10,000. Then, if selected for a license, dispensary locations will pay a $30,000 registration fee and growers/processors will pay a $200,000 registration fee on top of an annual $10,000 renewal fee.

Growers and processors will then pay a 5 percent tax, and the medical cannabis bill stipulates that cost can’t be passed onto patients. There’s also a $50 charge for patients seeking an ID card, but that fee can be waived by the state in the case of financial hardship.

In Pennsylvania, the funds raised will go toward the Department of Health’s regulation efforts, medical treatment research and drug abuse prevention programming.

Dispensaries on every corner?
I had a preconceived notion about what a marijuana dispensary might look like. We probably all have. Sorry, but I kind of expected a seedy, dingy garage where you pick up cannabis from a … very mellow… dude with dreadlocks.

That’s not what it’s like.

In Denver, most dispensaries have medical and recreational separated from each other, but even the recreational areas didn’t feel like a drug-infested dive bar. I checked out Native Roots, a dispensary in downtown which offers both recreational and medical cannabis products.

I walked in, showed my ID to a person sitting behind a glass partition (you absolutely must be 21 to enter) and sat down in the doctor’s-office-like waiting room. After a few minutes, I was called to come into the recreational room where a bar-like structure was around the perimeter of the room. “Budtenders” were standing behind it, pointing to cannabis products in glass cases that customers were picking out, paying for and leaving with. It felt a bit like a jewelry store.

One woman showing me their products – smokeable marijuana, edibles, concentrates, oils, lotions, pretty much anything you can imagine – told me she starts her day with weed-infused granola mixed with yogurt.

The medical area was decidedly less exciting. This is what dispensaries in Pennsylvania will be like. Card-holding patients were ushered into a room where they met with a trained medical cannabis employee – something like a special pharmacist – who dispensed cannabis to the patient based on a doctor’s recommendation.

So when it comes to Pennsylvania, don’t picture that seedy garage. Think of a doctor’s office mixed with a pharmacy, a place where patients who have medical needs diagnosed by a physician go to purchase cannabis. There won’t even be actual smokeable marijuana in these places, as Pennsylvania’s law stipulates only cannabis oil can be dispensed.

And no, there will not be taco trucks dispensaries on every corner. Pennsylvania’s medical marijuana law stipulates that no more than 50 dispensaries each with three locations (so 150 in total) will have licenses approved by the state.

What’s next for Philly?
The state’s still in the process of working out its regulatory structure, and where growing operations and dispensaries will be located will ultimately come down to where the state issues licenses.

But it’s safe to say regulators and city officials closely watching the medical marijuana program will at least want dispensaries located within city limits that are easily accessible to patients in Philadelphia. Paula Brumbelow Burns, a city planner with the planning commission, testified before a City Council committee earlier this month that the city’s looking at commercial corridors as the best locations for medical marijuana storefronts. She added the city could designate them as locations with higher regulations, similar to sex shops or gun stores.

Grow houses and processing plants – of which there could be up to 50 in Pennsylvania – are different. These are massive, industrial structures with security requirements and regulations that they be far from schools or parks. And they’re often unmarked, Burns said: “I don’t think they want to have a giant sign outside that says ‘pot grown here.’”

In her testimony, Burns said these growing operations are more likely to be zoned as industrial, meaning if any growing operations are approved for Philadelphia, they’d be concentrated in other industrial areas like in southwest Philly, Gray’s Ferry or along some parts of Washington Avenue or Delaware Avenue.

Concerns in Pennsylvania remain around access and costs and security and crime and diversity and education. The city wonders what it can do to assist the state in community outreach and education efforts.

For Cullen, it’s the community outreach that he says is key to reducing the stigma of marijuana use, even in a state where recreational use is already legal.

“I used to be a teacher,” he said. “Now? My full-time job is educating the public.”

News Moderator: Katelyn Baker
Full Article: Philly’s Future – Inside A $25 Million Marijuana Empire
Author: Anna Orso
Contact: (215) 821-8477
Photo Credit: Andy Colwell
Website: Billy Penn