Marijuana Business Magazine - May-June 2018

on becoming operational in California, Ohio and Puerto Rico. The company also is looking to enter Arizona, Florida or New York. Company executives started eye- ing Pennsylvania in 2016, around the time Gov. Tom Wolf signed legislation that established a full-fledged medi- cal marijuana industry. Lawmakers decided the Keystone State initially would issue permits to 25 or fewer growers and processors. Dispensary locations were capped at 150. In addition, only five grower/pro- cessors would be issued dispensary permits. “A regulated program is of the utmost importance to us, and Pennsylvania definitely designed its program that way, to the point where they don’t have flower and they don’t have edibles as available forms,” Bachtell said. Cresco started its work in Penn- sylvania before the state released permit applications for the medical cannabis program in January 2017. Early on, staff met with the Pennsyl- vania Department of Health, which was tasked with implementing the program. Cresco provided feedback and input on proposed rules, when possible, Bachtell said. The understanding helped Cresco know what the state wanted. For instance, the company knew early on that edible and flower sales initially would not be allowed, and dispensa- ries would be limited to operating in one of six regions in the state. The company used these insights when submitting its application to state regulators during the Feb. 20-March 20, 2017, filing window. Cresco Yeltrah’s application for a grower/processor license ended up receiving the second-highest score out of the 12 companies permitted. Its application for a dispensary received the 18th-highest score out of 27 applications. Teaming with Local Partners While Cresco Labs was exploring its options in Pennsylvania, a mutual friend connected the team with Michael Hartley and his sons, Trent and Kent. The family was interested in pursuing its own cannabis operations, Bachtell said, and was integral in help- ing Cresco win approval and get the grow and dispensary facilities ready. The Hartleys are experienced in running manufacturing businesses, including their Butler-based com- pany, Standard Bent Glass. Kent Hart- ley previously started a CBD company that produces medicated oils, topicals and suppositories. Ultimately, the two groups formed Cresco Yeltrah and submitted joint applications. Michael Hartley is now Cresco Yeltrah’s chief financial officer and co-founder. Trent Hartley serves as chief operating officer and co-founder, and Kent Hartley is co- founder and CEO. Bachtell estimates that entering a new market costs between $5 million and $12 million. Finding the Hartleys meant Cresco could share the costs of entering Pennsylvania. The family also played a key role in securing the sites in Pennsylvania where Cresco Yeltrah would build and oversee construction of the cultivation center and dispensary. In addition, the Hart- leys garnered support from neighbors and officials; some of that support showed up as letters included in the applications to state regulators. “One of the reasons why the community was even open to the idea of medical cannabis coming in is because the Hartleys would be involved,” Bachtell said. Building Quickly From the start, Cresco focused on being project-ready. “We wanted to show the state, ‘You hand me a piece of paper, I have a shovel in the ground the next day,’” Bachtell said. “We don’t have to go out and raise capital, we don’t have to find property, and we don’t have to do drawing for the interior. We do all of that pre-application.” Part of being shovel-ready meant meeting with government planning officials in the counties where Cresco Yeltrah planned to build its dispen- sary and cultivation facility before its permit applications were approved. Speaking with authorities early about renovating its 46,000-square- foot cultivation center in Brookville and building its dispensary in Butler Cresco Yeltrah’s CY+ dispensary in Butler, Pennsylvania, was the first storefront to start cannabis sales under the state’s medical marijuana program. Photo courtesy of Cresco Yeltrah 112 • Marijuana Business Magazine • May-June 2018