W.Va. medical cannabis industry prioritizes corporate profits over local farmers, jobs and businesses

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Courtesy of Redbud Hill Naturals

Since April 2017 when Gov. Jim Justice signed West Virginia’s initial medical cannabis legislation, concerns surrounding the eventual formation of the industry have grown increasingly prominent. For one local hemp farmer, those very fears have become harsh reality.

“I can’t tell you how many people have called me wanting a job here, hoping that we got that license—Now some out of state corporation got it,” said Mike Weaver, who runs Redbud Hill Naturals hemp farm in Pendleton County.

Weaver said his primary aim when preparing and applying for licensing to produce medical cannabis was to create jobs for the local economy and to help prevent West Virginians being forced to leave their home state to find a decent job.

However, after years of preparation, hundreds of thousands spent on application fees and several months waiting for a response, Weaver learned recently that two of his three license applications were denied, and most—if not all—licenses will be issued to out-of-state corporations.

“Most of the 10 licenses will go to out-of-state companies, and, to my knowledge, I’m the only individual who even applied,” Weaver said. “I had a financial backer, but I had an agreement with them that their maximum investment would be 10 percent, so my business would have been at least 90 percent West Virginia-owned, and all the jobs would have been local jobs.”

Weaver said the state will issue up to 10 growing licenses, 10 processing licenses and 100 dispensary licenses. He said that to his knowledge, the state currently has received about 40 growing applications, 40 processing applications and 200 dispensary applications.

The fees for applying for the required licenses to participate in the state’s forthcoming medical cannabis industry are nearly impossible for local farmers and businesses to meet, Weaver said.

Weaver said the grower and processor applications cost $10,000 individually, and the licensing fees cost $50,000 each. The dispensary application includes a $2,500 fee and a $10,000 licensing fee. In addition to fees, applicants must also have $1.5 million in assets, at least $500,000 of which must be in cash or in the bank. All fees must be paid up front, he said.

In addition to application fees, Weaver said he was forced to pay more than $100,000 more for various other requirements.

“The facility requirements also are tremendous,” Weaver said. “I’ve been preparing for almost two years, trying to get ahold of contractors and get quotes about security systems, and just the required security system alone was going to cost me more than $140,000. I’ve already got over half-a-million dollars into my industrial hemp operation, but I was looking at another 2-or 3-million-dollar investment to set up here for medical cannabis.”

Weaver said he also had to pay a security company and a law firm to help with writing a standard operating procedure and to meet other requirements, which cost an additional $15,000 out-of-pocket.

Weaver said it is frustrating and confusing why the state would choose to make it nearly impossible for local farmers and businesses to apply or be selected for the licenses.

“It’s very disappointing,” he said. “We have an existing West Virginia business here already doing essentially what needs to be done for the medical cannabis operation, and for us not to be selected and for at least four out-of-state companies to be selected over top of us—I’d like to have some answers for that.”

West Virginia Can’t Wait movement leader Stephen Smith, who recently hosted a conversation with Weaver via Facebook, said the unfair nature of the formation of the state’s medical cannabis industry should come as no surprise.

“This was built from the beginning to make it hard for local farmers,” Smith said. “We knew going in that this is what they were trying to do because we’ve got a government that is owned by corporate lobbyists. It’s the oldest story in West Virginia history: We’ve got something of value to West Virginians, and instead of keeping that wealth and value here, we’re selling it to the highest bidder.”

Smith said that, as some other states which recently legalized cannabis have done, West Virginia’s medical cannabis industry is being set up to depend on out-of-state corporations with no connection to most people in West Virginia.

“We are making the medical cannabis industry accountable to out-of-state corporations instead of keeping the wealth local,” Smith said. “This is the last thing we need in West Virginia.”

Douglas Harding can be contacted at [email protected]