An entrepreneur and a progressive village council have Johnstown poised to reap the economic benefits of medical marijuana.
On Aug. 12, 1926, a one-eyed tenant farmer with a dead pig and a shovel put Johnstown on the map. Jim Bailey, “who lost an eye years ago,” according to the Johnstown Independent, was having a bad day, digging a hole in a “quaking bog, which was recently drained” on Friend Butt's land to bury a sow that had drowned in a watering hole the night before. A few feet down in the black muck, “his spade struck something hard and he soon discovered what proved to be the remains of a great discovery.” His one good eye “bulged out enough for a pair.”
An expert called in from Columbus pronounced the great discovery to be the skeleton of a mastodon. It was not just any skeleton: It was one of the most complete such specimens ever found. The expert estimated the creature's age at about 30,000 years, but the Johnstown Independent was skeptical: “How he or anyone else knows that it has been so long since this monster roamed and reigned we leave it for the reader to determine, but in our conservative way we will say this big boy has been dead a long time.”
A historical marker at the village border promotes the mastodon as the town's claim to fame. A few days after the news of the great beast's discovery spread, 10,000 people paid 25 cents a head to trample on Butt's farm and gaze in awe. From the Aug. 19, 1926, Johnstown Independent:
“C.A. Benedict, the photographer, sold on Sunday 2,000 pictures at 10 cents each to the visitors and could have sold more. A dozen people were unable to serve the crowd at a refreshment stand on the grounds, while all four of our restaurants were sold out with nary a bun or bottle of pop remaining.” They came for weeks, in hordes, under fairground lights amid concession stands. The Independent crowed, “Johnstown is being heralded from a thousand miles away as the mastodon town.”
You can coast on that kind of glory for only so long. After 91 years, it might be time for a new claim to fame. Try this on: Johnstown, Marijuana Capital of the Midwest. This is not far-fetched. At least not as far-fetched as a one-eyed farmer burying a pig in a quaking bog on Friend Butt's farm delivering Johnstown everlasting fame, or as the local newspaper called it, “deserved notoriety.”
Marijuana, as medicine, is legal now in Ohio. And while other Ohio cities (including a number of Columbus suburbs with revenue troubles of their own) have gone out of their way to declare marijuana—medical, legal or otherwise—unwelcome, it's this unlikely slice of rural Licking County, where men still gather in Legion halls and Lions clubs, where churches outnumber bars and fossil finds are celebrated for a century, that has embraced the audacity of dope and positioned itself to become one of the big players in a business that's just starting to boom. Credit a young, bright village manager, an open-minded village council and an entrepreneur who recognized opportunity when it knocked.
Pot is all business for Andy Joseph. He doesn't smoke it—“I was in the military”—which is probably just as well because he's got a multimillion-dollar company to run, and a whole lot riding on how Ohio manages its brand-new medical marijuana industry. Joseph, 46, is trim and handsome. He wears jeans and brings his two German shepherds to work, where they have free run of the premises. But his laid-back manner is deceptive. You sense a serious mind at work here. “If you know Andy, he doesn't sugarcoat anything,” says Jim Lenner, Johnstown's village manager.
If and when Johnstown becomes a marijuana hub, Joseph will be the man who started it all. Kind of like Bailey and his shovel. Which is nice because Joseph is a local boy who grew up down the road in New Albany before New Albany became New Albany. He lives in Johnstown now (“After I got out of college, New Albany was no longer affordable”) with his wife, Kristen, five kids and two dogs. After high school he spent six years in the Navy as a machinist working on reactors on nuclear submarines (his father was also a machinist in the Navy). Then he enrolled in Ohio State University's welding and engineering program, earning his bachelor's and master's degrees. While still in school, and later while working at Edison Welding institute, Joseph earned extra cash in the fabrication business. Tinkering away in his barn, he began to attract customers who were looking for botanical oil extraction devices, a market that mainly consisted of natural flavoring, hops extraction for beer, etc.
Still at Edison, Joseph founded his own company, Apeks Supercritical. He was going to call it Apex, but that was taken. To keep the name at the front of the phonebook (and Google searches), Joseph hit on Apeks. As far as the supercritical part? It's a fancy term for a process often used in extraction, as in the decaffeination of coffee or the production of oils and other pharmaceuticals from plants. “It was literally a backyard operation,” he says, with his mills and lathes filling up his barn. But it was successful. “I basically had two full-time jobs.” Then, “Around 2008, 2009, the cannabis industry found us.”
It's nothing short of amazing what Ohio's legislators, properly motivated, can accomplish. School funding, redistricting—they've failed tragically to resolve stuff like that for years, decades even. But the Ohio General Assembly and its Republican political leadership assigned a task force, held hearings and passed a bill for Gov. John Kasich's signature in six short months in the first half of 2016 to expeditiously legalize medical marijuana.
While legalizing medical marijuana is hardly a right-wing priority, Ohio's Republican leadership likely saw the writing on the wall and decided to fight the fight on its own terms.
Republican lawmakers had barely breathed a sigh of relief over the lopsided defeat of Issue 3, which would have legalized recreational pot in Ohio, in November 2015 when they realized that more—and certainly better-crafted—marijuana legislation was coming their way. The notions that Issue 3 would create a monopoly and that its language was confusing were blamed for its failure. But nobody doubted the polls that showed increased voter tolerance of marijuana, making some kind of legalization inevitable.
The Marijuana Policy Project, a Washington, D.C.-based group that's been working on marijuana ballot issues around the country, was ready to step in with a medical marijuana ballot proposal of its own. Issue 3 “was a not-great idea, badly executed,” says Chris Lindsey, senior legislative counsel for MPP. But suddenly Ohio legislators were ready to talk about medical marijuana. Cynics might speculate that the presence of a marijuana issue on a fall ballot in a presidential election year might spark a large liberal youth turnout, perhaps motivating our Republican lawmakers to act first. Lindsey says that might have been a factor, but if so it was nebulous: “Pot on the ballot doesn't necessarily drive young voters.”
But don't discount the effect of polls on politicians. In explaining the willingness of his colleagues to legalize prescription weed, Republican state Sen. Jay Hottinger, whose district includes Johnstown, says, “Medical marijuana polls incredibly strong. We knew it was going to resurface again.” Even some marijuana advocates preferred a legislative approach; after all, they had only gone the ballot route because of Statehouse opposition. “We had lobbied for years and couldn't get hearing one,” Lindsey says.
A constitutional amendment ties lawmakers' hands by locking language into law. If state leaders had managed to handle the gambling issue with the same efficiency as the pot issue, Ohio would not have been saddled with the four-casino duopoly voters approved in 2009. “It was better for us to do it on our own,” Hottinger says. “We wanted to make sure we had safeguards.” The House passed the bill easily, but it squeaked in the Senate by an 18-15 margin. Kasich's signature made Ohio the 25th state to legalize medical marijuana.
So, what's that legislation look like in Ohio? Basically, you can't smoke it, you can't grow your own, and you've got to be in pretty bad shape before you can get anywhere near it. The proposed ballot issues would have been less restrictive, but their sponsors withdrew them, reluctantly, when it appeared the General Assembly was on board. United Ohio, a pot advocacy group not involved in either proposal, summed it up best in a statement to the Dispatch. “We may not have home grow. We may be missing important delivery forms. We may not have a robust enough list of qualifying conditions. But we no longer have a state without a medical marijuana program. And that's more than we had last week.”
Since pot is still outlawed by the federal government, doctors can't prescribe it. They can, however, “recommend” its use after the doctor and patient are registered with the State Medical Board of Ohio. Recommendations are limited to 21 specific diseases and conditions, including AIDS, Alzheimer's, cancer, epilepsy, fibromyalgia, glaucoma, pain that is either chronic and severe or intractable, Parkinson's disease, post-traumatic stress disorder, Tourette's syndrome and traumatic brain injury. Patients can receive a 90-day supply of pot in various forms: capsules, creams, edibles, patches, solids or oil and plant material for vaporizing.
“Considering they didn't want to move on this at all, these guys actually did a pretty good job,” Lindsey says. “The reason they were able to do it so fast was they deferred to the agencies, and the agencies actually wanted the system to work. They have a system calibrated to what would work in Ohio.”
The agencies in question are the state's pharmacy board, medical board and Department of Commerce, which together run the Ohio Medical Marijuana Control Program (medicalmarijuana.ohio.gov is a fine resource). The law mandates that the program start by Sept. 8, 2018, which means all the OMMCP needs to do is review hundreds of applications from people who want to grow the pot, process the pot, test the pot and supply the pot to doctors and patients, award the licenses and inspect the facilities in time for the growers to get their first crops in, get them processed, tested and issued to dispensaries. In the next 10 months.
Commerce director Jacqueline Williams told the Dispatch in September that the program will “absolutely” meet that deadline. From the 185 applications, the OMMCP was to select 24 cultivators—12 large and 12 small, as spelled out in the legislation. OMMCP spokeswoman Stephanie Gostomski insisted in late October that those license recipients were to be notified by Dec. 1. But hold off on planting those seeds. “They will still have to get a certificate of operation,” Gostomski says.
When Andy Joseph came to Johnstown's leaders last year with his idea to create a medical marijuana hub, part of the pitch was that Johnstown would be the first Ohio municipality to embrace the marijuana industry. “He pitched it at a council meeting, and all but one or two people were intrigued,” says Lenner. “We're a small community, like many others, that struggles with funding. All these other Columbus suburbs are banning it—of course it's OK if you don't need to take a risk. We're willing to take a risk.”
The second part of Joseph's pitch was that he's already in the game, selling (or leasing) his extraction machinery to companies in other states for the purpose of producing medicinal marijuana products. By 2012, Joseph's little backyard operation was generating annual revenue of about $750,000—enough to allow him to quit his corporate job to keep up with the growth. And grow it did. By 2015, Apeks's revenue had climbed to around $13 million, and the Inc. 5000 list named it the fastest-growing private company in Ohio and among the top 25 nationally.
Joseph is fond of saying he's like a pickax manufacturer during the Gold Rush. But these are no pickaxs. The factory floor at Apeks, located in an otherwise drab building in the Johnstown Business Park, positively gleams with sleek silver cylinders, elaborate control boards, dials, gauges and hoses. The cheapest machine here, Joseph says, goes for $80,000, and the top of the line is $475,000.
It didn't take a particularly hard sell for Johnstown's village leaders to realize they were poised to benefit from the state's legalization legislation. They were, in fact, ahead of the game with Apeks already doing a multimillion-dollar business servicing the industry inside their 20-year-old business park. If they could put planning and zoning into place to meet the state's regulations, and do it while other cities were busy with moral indignation, Joseph explained, the economic benefits to not just Apeks but to Johnstown could be substantial. Marijuana was a
$5 billion-a-year industry in 2015. By 2020, it's expected to be around $20 billion. To bolster his pitch, Joseph brought in experts from the medical community, and from where medical marijuana was already available, to talk to Johnstown's village council.
Justin Breidenbach teaches accounting at Ohio Wesleyan University and has made himself an expert on the marijuana industry. He's consulted with clients who want to get into the business of pot on the accounting and banking side of things.
“There's a little town in Colorado, their tax revenue from marijuana sales exceeded their rainy-day fund,” Breidenbach says. “They created a capital improvement program where anybody—a homeowner, a business—if they spent money on a new roof, say, or improved their property, the city would reimburse them. They'd pay for it.”
“When cities see the dollars this can bring in … and being first to enter—people are very loyal in this industry, someone who's ready to take a risk, they appreciate it,” adds Breidenbach.
Johnstown's council heard enough to be convinced. It passed a resolution in August 2016 welcoming businesses related to the pot industry. This year it approved rezoning the business park to make it legal for pot cultivators and decided to tax marijuana companies at the same rate as other businesses. Public reaction has been almost all positive, Lenner says, with even the police department on board. Among those not pleased was Lewis Main, the lone “no” vote on the council's resolution. He's been involved in Johnstown politics for more than 30 years as a councilman, mayor, planner then councilman again.
“My opposition was religious, number one. I'm a Christian,” Main says. “Number two, my daughter has a doctorate in pharmacy and she has educated me that marijuana is not a necessity for pain management. I'm concerned about the reputation of our small village. I'm not rooting against it, but I don't think it's right for us.”
Hottinger says he was surprised at Johnstown's move: “Obviously, Johnstown is a pretty conservative community. But the law gives local government the freedom to do that. It's their prerogative. I'm certainly not going to interfere.”
The response to Johnstown's initiative astounded Lenner. Calls started pouring in for the village's five cultivation lots, which were quickly snatched up. Five cultivators, including Joseph, stood ready to become Johnstown's budding ganjapreneurial class. But until the state weeds through those 185 applications for 24 licenses, all Johnstown and its anxious cultivators can do is wait. “I'd like [Johnstown] to get two [licenses],” Lenner says. “If we don't get at least one, that will be very disappointing.”
On the other hand, “I was interviewed in Marijuana Times. That was a high point for me,” he says.
Oh, and the mastodon? Jim Bailey sold out his share to Friend Butt, who sold it to some Newark businessmen who then sucked whatever profit was left out of it and sold it to the Cleveland Museum of Natural History. You can still see it if you go up there. But after 91 years, Johnstown is digging for something new.