YOUNGSTOWN — “Overall, good,” said Daniel Kessler, CEO of Riviera Creek on the performance of the only medical marijuana cultivation facility in the Mahoning Valley.
“We’ve continued our growth in terms of continuing to add capacity to our facility, really, since we started,” Kessler said. “Our overall strategy has been to start small and continue to grow as demand continues to grow.”
The facility on Crescent Street received its certificate of operation in 2018 and opened in 2019 with two flowering / harvest rooms, and has tripled capacity since. The latest expansion of two grow rooms came online at the end of 2022.
“The market is absorbing those, but we have seen toward the beginning of this year a little bit of a plateau in terms of patient count,” Kessler said.
The plateau was noticeable in December following months of steady growth, Kessler said, and it’s starting to affect market share as every month, more and more of Riviera Creek’s competitors bring additional capacity online.
Also, there’s more competition in the cultivating sector of the industry, he said.
When the medical marijuana program began, there were 12 level one cultivation licenses and 12 level two cultivation licenses, Kessler said. In mid-March, he said, 23 level one licenses have been given out with 19 having a certificate of operation and there are 14 level two licenses, 12 of which have their certificate to operate.
“There is almost double the amount of level ones than there were supposed to be and two more level twos, so the market has quite a bit of competition in it. It’s worth noting that this industry, unfortunately it took a long time for companies to get up and running, that’s just the reality of business … but at this point, with 23 and 14, the total number of cultivation licenses is 37,” Kessler said.
“In no way shape or form should there be a narrative out there that this is a monopoly or oligopoly. It’s a very competitive marketplace.”
POTENTIAL LAW CHANGES
Legislation making its way through committee in the Senate would revise Ohio’s medical marijuana law.
Part of Senate Bill 9 would increase the square footage of allowable cultivation to 4.2 million square feet. Right now, there is about 1.8 million square feet, Kessler said.
Other parts include the creation of the Division of Marijuana Control within the Ohio Department of Commerce and create a 13-person commission to oversee the division. The legislation also would transfer the portions of the medical marijuana program overseen by the Ohio Board of Pharmacy to the division.
With more growing licenses out there and some companies already holding back hundreds, if not thousands, of pounds of product from the market, Kessler said, the bill is flawed.
“The overall point being we’re already at a state of oversupply and to pass a bill like that with that many square feet of canopy, I unfortunately don’t follow the logic,” he said.
Kessler testified before lawmakers in March against the bill, which he said does little to make a big impact on patient count.
He addressed the committee with suggestions he believes would go far to up patient numbers, including extending reciprocity to potential patients in other states that don’t have medical marijuana programs.
He also suggested reducing the required annual doctor’s visit to participate in the program to once every three years and for the state to eliminate its $50 license fee.
Another way to increase patient count and access to the state’s program, he said, would be to allow nurse practitioners to prescribe medical cannabis.
“Just like they’re able to prescribe medicine, behind the counter medicine, they should be able to recommend medical cannabis,” Kessler said.
Riviera Creek at the end of 2021 received a processing license and spent 2022 in the lab developing solvent-less products, or products without chemicals.
“We’ve been working hard on figuring out different products we can make that are new and innovative, or one there’s not much competition in the marketplace for, and really at the beginning of this year we launched a whole line of solvent-less products,” Kessler said.
One is a combination of flower and rosin sprinkled with THCA, one of the active compounds in marijuana that can help relieve pain and inflammation.
Another product launch was for flower infused with solvent-less ice hash.
“As the market plateaus … we’ve had to become more creative with our types of products and even with brands and strains,” Kessler said.
Riviera Creek, which employs about 75 people, sells products to about 55 of the state’s 70 or so dispensaries. It has the No. 1 selling flower in the state, Stambaugh.
“We hear on a regular basis, not only here, but we get detailed sales data that across the board it is the No. 1 selling flower in the state,” Kessler said. “It sells more units than any other flower … there are other products that might sell at higher rates, but in terms of flower, which is 50 percent to 60 percent of the market, it is by far the No. 1 flower in the marketplace.”