JOHNSTOWN – Local marijuana producer Vireo Health is expanding to capitalize on the expected growth in the medical and recreational uses of its products in the state.
“As it stands, New York is the biggest opportunity for Vireo Health,” company CEO Dr. Kyle Kingsley said in an investor video presentation released Tuesday.
The company is exercising its $ 1.3 million option to purchase 97 acres alongside its existing cultivation and production facility at Tryon Industrial Park in Johnstown, where it plans to add up to 200,000 square feet of production space.
Kingsley told the Daily Gazette on Tuesday that state regulations for the production and sale of recreational marijuana were not complete, but the company has enough confidence in the market to move forward now and it will therefore be ready when the rules are over.
This may mean that the structures are being built but not immediately completed and filled with equipment inside, he said. The work will be done in consultation with the regulators.
“We intend to expand our facilities quite significantly,” Kingsley said, hoping that there will be a marked shortage when the legal market opens in New York.
Another big boost for Vireo is that New York has legalized the sale of whole flower cannabis for medical use, Kingsely said. Consumers prefer this form, he said, but until now New York has limited medical marijuana products to extracts, not the whole flower.
“I think it’s going to be the biggest blow to the arm in New York,” he added.
Meanwhile, Vireo is looking for a larger space for their only dispensary in the Capital Region, currently located on Fuller Road in Colony.
And the public can see a name change on the dispensaries at some point: On Tuesday, Vireo Health International announced that it was changing its name to Goodness Growth Holdings. Vireo Health will be the multi-state cannabis subsidiary.
Also on Tuesday, Goodness Growth announced that another affiliate, Resurgent Biosciences, will move into the psychedelic medicine space, with intellectual property development and clinical research, but no actual manufacture or distribution of psychedelics.
Kingsley said he was initially skeptical of psychedelics, but they have shown remarkable success in treating conditions such as depression.
He said regulatory approval for medical psychedelics would likely be decades away, but predicted it would come during his lifetime. “It’s going to be transformative,” he said.
Hurdles remain for Vireo, which last month reported a loss of $ 7 million for the first quarter of 2021:
- Because the federal government classifies marijuana as a Schedule 1 drug like LSD, heroin and ecstasy – no medical use and high risk of abuse – Vireo and other companies cannot operate across state borders and achieve economies of scale, whether for recreational or medical purposes. . Kingsley is hoping the current Washington leadership will remove marijuana from Schedule 1.
- Because there is little research on medical marijuana that provides knowledge and advice on specific dosages and effects, many doctors remain reluctant to prescribe it to patients.
- The regulatory framework New York created for the production and sale of recreational marijuana remains an unknown.
Despite these factors, Kingsley remains optimistic.
Vireo finished 2019 and 2020 in the red but went from $ 30 million in revenue to $ 49 million. With major regulatory changes coming to Minnesota, New Mexico and New York, he expects cash flow to turn positive in the first half of 2022 and expects revenue of $ 140 million to $ 180 million for the whole of 2022.
More from The Daily Gazette:
Categories: Business, News