Riviera Creek Readies Expansion Plans After Passage of Issue 2
YOUNGSTOWN, Ohio – Riviera Creek LLC, the city’s sole medical marijuana cultivator and processor, had already planned for expansion to serve the health care community and patients who use the company’s products, its chairman said.
Now that Ohioans have passed Issue 2 – a referendum that legalizes adult use of cannabis – Brian Kessler has plans at the ready for future growth to accommodate what he believes will be stepped-up demand.
“The reality is now that Issue 2 has passed, there is this moment where it becomes law,” he said Tuesday. “As it becomes law, our job is to fill in the supply.”
Kessler said the company is already in the process of adding its eighth grow room. Should the law roll out as planned, he said Riviera Creek could expand to 11 grow rooms by sometime in 2025. The company’s building, he adds, has the capacity for 13 such rooms before any addition would be considered.
Voters approved the ballot issue 57% to 43% during the Nov. 7 election. The measure allows adults age 21 and older the legal right to purchase marijuana.
The next step is to work with the state to determine how the law would be executed. “That’s going to be the challenge over the next weeks and months,” Kessler said.
He said the issue becomes state law Dec. 7, but there still needs to be some clarification on any changes in distribution models, user access, tax rates and other regulations before usage is adopted wholesale.
“We can’t act yet until we know clearly what we’re allowed and not allowed to do,” he said. “The sooner the state has gotten that clarified, the better.”
However, much of the infrastructure is already in place as a result of the existing distribution model for medical marijuana, Kessler said. Testing and regulations have also been established through Ohio’s medical marijuana program.
“We already know how to serve the medical market,” he said. “It makes it easier to transition to adult use. Hopefully, once the regulations are clearly defined, it will move pretty quickly.”
The state has identified a nine-month window to write the rules and issue licenses to cultivators and processors.
Kessler said the sooner adults have access in a regulated marketplace, the safer it will be for the consumer.
Discussions are underway between state officials as to how to implement new policy under the law. This has included raising the 10% surcharge tax on marijuana revenues to capping the amount of THC – the active ingredient in cannabis – that could be sold to adults age 21 and over.
Kessler said additional taxes on the product could force buyers to either purchase marijuana off the street – which could be dangerous – or to consider patronizing nearby states such as Michigan, which has a standard 10% tax rate on the product.
“I get worried if you tax too much, you encourage illegal street product to come in and undercut you, and I get worried that they go to another state, such as Michigan,” he said. “I want to be very competitive.”
There are also questions as to how to advertise the product, Kessler said. He believes that the same advertising parameters placed on alcohol should be extended to adult-use marijuana.
“If we don’t get this law up and running quickly, that allows for a lot more illegal product to show up, or people buying Delta 8,” and over-the-counter product sold legally that contains THC. “That’s the stuff being smoked on the streets,” he said.
Should the law roll out between four and six months, the industry could see annual sales of between $1 billion and $2 billion across Ohio. He said the medical marijuana industry pulls in between $300 million and $400 million in revenue annually.
Kessler spoke with local media Tuesday as Riviera Creek rolled out a limited edition package for its Stambaugh brand medicinal cannabis.
The medical marijuana is packaged in a tin container with a design painted by regional artist Bob Peck, whose work is found in Cleveland and other cities across Ohio.
It’s part of Riviera Creek’s Artisan Ohio Focus Project, which will highlight and support artists’ work across the state. The company selected Peck as the artist for this year’s limited edition release.
Riviera Creek has produced a total of 2,500 tins with two designs – 1,750 apiece – that were created and hand-signed by Peck.
“This way, Bob gets an opportunity to get his products out to people who have never seen his work before, and people get to know more about what artists are doing in Ohio,” Kessler said.
Next year, the company plans to host a contest that would encourage Ohio artists to submit their work. Riviera Creek would then select a new artist for its 2024 edition.
Another painting that Peck was working on as Kessler announced the new initiative would be auctioned. The proceeds would go to various arts groups.
Peck said he’s thrilled to be a part of Riviera Creek’s project. He was paid $3,500 for his two designs.
“I thought it was great,” Peck said. “I was excited to work with the company, and I’ve had a lot of fun doing this.”
Peck said his paintings generally sell for between $600 and $1,000. “I have murals all over Cleveland,” he said.
Kessler said the idea is to support Ohio artists. “It’s not just Banksy getting attention,” he said, referring to the renowned street artist. “It’s now local artisans.”
Pictured at top: Artist Bob Peck and Brian Kessler, chairman of Riviera Creek.
Copyright 2023 The Business Journal, Youngstown, Ohio.