The Johnstown company demonstrated at an administrative hearing that its application should have received additional points for its pesticide plan.
Confusion over Ohio Grown Therapies’ pesticide plan in its initial application for a Level 1 medical marijuana cultivation license nearly lost the Johnstown company entry into Ohio’s nascent market, until the Department of Commerce reevaluated the business’s score and issued it a provisional license late last month.
After initially ranking 15th in the race for 12 licenses to cultivate up to 25,000 square feet of medical cannabis, the company requested a Revised Code 119 Administrative hearing, where it successfully demonstrated that its application should have received additional points.
“Out of 12 allocated licenses, our scoring placed us 13th, and then we were actually bumped two places down to 15th by the diversity allotment,” Ohio Grown Therapies CEO Andy Joseph told Cannabis Business Times.
Ohio’s medical marijuana law required state regulators to issue at least 15 percent of the licenses to businesses that are minority owned by “economically disadvantaged” groups, although the racial quota was ruled unconstitutional last month.
“So, our original score actually placed us 15th out of 12,” Joseph said. “We evaluated the scoring part of the application and felt that there were some errors where we felt we had all of the information that was required and didn’t really understand the scoring.”
In particular, Ohio Grown Therapies disagreed with the state’s evaluation of its pesticide plan.
“To be fair to the Department of Commerce, our plan basically included not using pesticides,” Joseph said. “In other words, we had biosecurity and biosafety protocols that don’t require the use of pesticides unless there’s an outbreak that we can’t control, and then we would use them. So, when we proposed this concept of ‘We’re not going to use pesticides,’ the scorers interpreted that as we don’t have a pesticide plan.”
The scorer of Ohio Grown Therapies’ initial application testified during the appeal process and admitted that he was unsure whether the company planned to use pesticides or not, based on the information included in the original application.
“As we walked through the layers of the application, I think it became clear to both the scorer as well as the appeal officer that we did indeed have a plan for pesticides, but that plan was not to use pesticides, unless there was a requirement to use them, and then in the event that we are going to use them, this is how we use them,” Joseph said. “I think that was a fundamental problem there, that they were expecting to see what everybody else had put up, which is ‘We’re going to use pesticides like this,’ whereas our application was a bit unique and didn’t specify that we were going to use pesticides as a first order defense, but rather use biosafety zones.”
Ohio Grown Therapies is not the only company to be subsequently awarded a license after the state’s initial allotment was distributed; PharmaCann was also awarded a provisional Level 1 cultivation licensein May after a scoring error was corrected.
Now that is has secured a provisional cultivation license, Ohio Grown Therapies has nine months to obtain a final operational permit.
“We’re in the process of evaluating whether we want to attempt to start construction through the winter, or whether we want to wait until spring to start the buildout on this thing,” Joseph said. “We haven’t made a decision on that yet.”
Ohio Grown Therapies was the top-scoring processing applicant in Ohio, and has started construction on the processing entity, which will be adjacent to Apex Supercritical, an Ohio-based manufacturer of CO2 botanical oil extraction systems, which is also headed by Joseph.
“Now that we have a cultivation license, the cultivation license is going to be co-located with the processing license in some way, shape or another—we’re not sure exactly how yet,” Joseph said. “But all three entities—Apex Supercritical, processing and cultivation—will all be on the same site.”
The company also earned a dispensary license in Ohio, making it vertically integrated in the state.
Ohio Grown Therapies is co-owned by Maui Grown Therapies, a vertically integrated medical cannabis operation in Hawaii, which will allow the company to bring unique strains such as Kona Gold and Maui Wowie to Ohio’s market.
“Those are common strains that are found throughout the country, but these strains originated in Maui, so we’re able to go back to the original cultivars and original chemovars and utilize those chemovars that have been further developed and further defined by our partners in Maui and bring them to the Ohio patients,” Joseph said.
Overall, Ohio Grown Therapies is excited to launch as one of the two vertically integrated medical cannabis operators in Ohio.
“We are unique on multiple fronts, and we certainly look forward to the opportunity to serve Ohio’s patients,” Joseph said. “[And] while we are a new license holder, we’ve had 18 years of experience in the cannabis space through Apex Supercritical, and we bring cultivation, processing and dispensing experience for the past two or three years from our Hawaii partners. So, even though we’re the new kids on the block now, we’re actually bringing a tremendous amount of experience.”