Economic Development

Officials Call for Suspension of Medical Marijuana Licenses

YOUNGSTOWN, Ohio – Calls for the Ohio Department of Commerce to suspend the awards of Level I medical marijuana cultivation licenses hasn’t deterred a local venture from moving forward with its plans to develop a grow site in the city.

“We’re moving forward full bore,” said Daniel Kessler of Liberty Township, partner and chief operating officer in Riviera Creek LLC, one of the 12 applicants that last week were awarded a provisional Level I license to grow medical marijuana in the state.  

“We have deadlines to meet and milestones to achieve,” he said. “We’re focused on that. Until the state or the Commerce Department says any differently, we’re still moving forward.”

State officials have called on the Ohio Department of Commerce to suspend awarding Level I medical marijuana cultivation licenses after it was discovered that one of the consultants the state hired to score the applications – Trevor C. Bozeman – is a convicted drug felon.

Kessler and his uncle, Brian Kessler of Los Angeles, plan to retrofit a building that Brian Kessler owns at 1275 Crescent St. According to the terms of the license, the Kesslers must meet all of the regulations, audits and certifications and begin growing marijuana at the site within nine months. The seeds cannot be planted until the provisional licenses are certified as final.

A Level I license requires a minimum growth footprint of 25,000 square feet, and could be expanded if demand for medical marijuana increases.

Riviera Creek hasn’t officially confirmed how much it plans to invest in the operation, but each start-up phase would constitute “several million dollars,” Daniel Kessler told The Business Journal last week.  The venture could create as many as 300 jobs.

The Kesslers also plan to apply for a medical marijuana processor’s license that would allow Riviera Creek to manufacture marijuana-based products that physicians could prescribe such as tinctures, oils, and edibles.

The Commerce Department is now accepting applications for processors. The deadline to submit a proposal is Dec. 15.

Riviera Creek has said it is not interested in applying for a dispensary license.

In the wake of published reports about Bozeman, public officials delivered sharp rebukes to Commerce and criticized how the department handled the entire evaluation process.

“This is an epic failure. I am outraged,” said Ohio Auditor of State David Yost in a statement Wednesday.  “The only proper action is to freeze this process, and independently review the evaluation and scoring from the ground up.”

Bozeman, owner of iCann Consulting, pleaded guilty in 2005 to manufacturing, delivering and possessing drugs with intent to manufacture or deliver in Pennsylvania.

The department agreed to pay iCann $150,000 for two contracts – one to help draft rules and regulations for medical marijuana growers and another to provide consultant services in assessing applicants for medical marijuana cultivation licenses.

Commerce announced last week that it had selected 12 companies including Riviera Creek of Youngstown as recipients of Level I cultivation licenses out of 109 applicants.  A drug-related conviction would have disqualified any applicant for the license under the department’s rules.

“The administration needs to explain how this drug dealer ended up telling the government how to run its fledgling medical marijuana program,” said Yost, a Republican running for Ohio Attorney General.  He has directed his staff to seek additional information to determine whether there were errors made during the selection of those hired to review applications and whether any hiring errors affected the evaluation process.

“We can’t wait for a rearview mirror audit,” Yost said.  “The Commerce Department needs to act today before this train leaves the station.”

Lt. Gov. Mary Taylor, a Republican who is seeking her party’s nomination for governor in 2018, also said that Commerce should refrain from officially awarding any licenses until a review is completed on the hiring and scoring process.

“As a mother who has struggled with addiction in my own family, I am outraged that a convicted drug dealer played a major role in determining who was suitable to receive a license,” Taylor said in a statement.  “At a minimum, the integrity of the process has been called into question and it is unconscionable to imagine that this process would be allowed to continue until we have a full reckoning. I demand that we take a step back and freeze the awarding of the licenses until the facts have come to light.”

Other elected officials across Ohio say that freezing the license awards jeopardizes the entire program, and the process should move forward despite the issue with iCann.

“Someone missed a background check, and that concerns me,” said state Sen. Joe Schiavoni, D-Boardman, whose 33rd District includes Youngstown.  “But I don’t think we should suspend the process.”

Schiavoni, who is seeking the Democratic Party’s nomination for governor in 2018, said that he understands the state pursued a blind evaluation system that awarded licenses to the best applicants and nothing more.  From what he understands, Riviera Creek scored among the top five applicants.

While he does concede that the state should terminate its contracts with iCann, Schiavoni noted that holding up licenses would just complicate the initiative’s roll out and delay medical treatments to those who need it the most.

“I don’t think the process has been tainted in any way,” Schiavoni said.  Waiting another six months would just deny medical marijuana to those who suffer from seizures or post-traumatic stress disorder, he added.

“We have to keep moving, and I’ll push back on any legislators who say this somehow spoiled the process,” Schiavoni said.  Most of the outcry has come from high-powered Republicans and those vying for office, and not many in the General Assembly.

Riviera Creek, meantime, plans to invest millions of dollars into an operation that could create hundreds of jobs for the region in the future, Schiavoni said.  “They have deep roots in the Valley, they have the knowledge and technology,” he said.  “I don’t want to see this opportunity for the Mahoning Valley jeopardized.”

Published by The Business Journal, Youngstown, Ohio.