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Medical marijuana biz attracts entrepreneurs

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Nine Springfield entrepreneurs hopeful to get into the medical marijuana game are one step closer to applying for a state license after receiving zoning certification from the city.

For now, they’re making business plans on the chance the state Department of Health and Human Services grants them a dispensary, manufacturing or cultivation license.

“It’s amazing that we’ve had this much interest,” said Bob Hosmer, the city’s planning manager, noting most of the applications are for dispensaries.

Seventeen applications were still pending at press time.

Springfield City Council in May approved location requirements for medical marijuana dispensaries and Type 2 manufacturing facilities at 1,000 feet from schools and 200 feet from day care centers and churches. More stringent language for cultivation centers and Type 1 manufacturing facilities puts the requirement at 1,000 feet from schools, day care centers and churches.

Hosmer said once the state issues a permit, the business owner would need to obtain a building permit and business license from the city before opening shop.

“The state is going to require a lot of security and special arrangements for the structures,” Hosmer said. “I would anticipate a lot of these structures will have to be modified and brought up to code.”

The state Department of Health and Senior Services has received 48 prefiled dispensary applications from Congressional District 7. Statewide, the department has received 554 prefiled applications and collected fees totaling $3.9 million, according to its website.

The department will take applications Aug. 3-17, and the approval process is slated to last until the end of the year.

Dmitriy Chernioglo, owner of Evolve Wellness LLC, is planning a medical marijuana dispensary at 1825 E. Cherry St., which has received zoning approval from the city. He said he signed a six-month lease with landlord Darien Teeter in January for $2,500. By the end of the lease, Chernioglo will have invested $25,000 into securing a building for his potential company.

Chernioglo said he’s planning infill work for a 3,000-square-foot store if he’s granted a state license. He said finding the building has been one of the hardest parts of the process.

“When I first found this location, it didn’t qualify because of the church nearby,” Chernioglo said, noting the recent change in zoning requirements by City Council.

If granted a state license, he doesn’t expect to have a product to sell for a few months after. Pricing structures have not been set.

“The cultivators need three to four months to produce, harvest, cure, test and make a product available. So, technically, we are not looking to have product on the shelf until the end of February and beginning of March,” Chernioglo said.

Desmond Morris, founder and CEO of The Wholesome Bud Co., said he’s planning to open a dispensary at 1824 S. Glenstone Ave. and a 12,000-square-foot cultivation and manufacturing center at 1514 S. Enterprise Ave. Both have been approved by the city.

He expects the cultivation center would open four to six months after Wholesome Bud officials receive a state license, which means the dispensary likely would not open for another six months in order for the company to plant and grow its product.

Morris said he’s invested $63,000 into his plans so far, with application fees making up about $22,000, and floor plans and construction documents requiring $20,000. Other costs are attorney and consultant charges.

The cultivation is the most expensive part of the business, he said. It’ll cost him about $70 per square foot of the cultivation building to create the laboratory setting required by the state – including lights, tables and HVAC. He’ll also need video cameras throughout the laboratory with two views on every plant. He’s thinking he’ll purchase 80 security cameras, which run at least $100 a piece. In the dispensary, he’ll need to buy software to check driver’s licenses and patient identification cards. Then there’s payroll for the planned 30 employees by the end of year two and the monthly lease payments for the two buildings. He’s expecting to invest $3 million-$5 million by the end of 2020 with help from angel investors.

Product costs likely will mirror prices found on the black market, with a gram ranging from $5 to $20, he said.

Morris said having both centers will give Wholesome Bud a leg up.

“Things are going to change almost weekly,” Morris said of the burgeoning industry. “Being able to have it all gives you the flexibility to adjust your business on the market factors.”

The city’s first application approved was for The Outland Bar at 326 South Ave, according to past Springfield Business Journal reporting.

An official with the bar said via Facebook Messenger the operators are preparing to file an application with the state to operate a medical marijuana facility in one of three spaces in what’s collectively known as the Outland Complex. The Outland Bar is slated to become the medical marijuana facility, should its operators gain state approval.

Adam Dunlap, who has owned a vacant lot at 1815 N. Nixon Ave. for the last 12 years, said he’s not sure what his next move is now that he’s received zoning approval.

“Springfield has very few areas that meet the qualifications,” Dunlap said. “I thought that land would make a good spot – and I figured it would increase the value.”

Dunlap said there’s been groups looking at the land for a possible manufacturing center. He doesn’t know if he’ll act as a landlord or partner in the business just yet.

Web Editor Geoff Pickle contributed.

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