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Companies from Israel, Maryland pitch Jeannette medical marijuana grower

July 21, 2018

A vacant warehouse on Thomas Avenue in Jeannette could house a medical marijuana grower/processor if the state approves an application from Maryland company Hippocratic Growth.

Israeli investors and Maryland marijuana mavens have Jeannette in their sights.

Hippocratic Growth, a company that operates a dispensary in Maryland, has applied to open a medical marijuana grower/processor facility on the site of a vacant warehouse in Jeannette owned by Israeli-American company Herzl Capital.

Herzl bought the Thomas Ave. warehouse for almost $1.5 million at auction last year.

The grower/processor could employ as many as 100 people, developers said.

Ben Bakhshi, partner in Herzl Capital, said he’s looking at several potential uses for the site, but using it to grow marijuana is his primary ambition.

“It did make it easier to pull the trigger, because of this cannabis motivation,” he said.

Bakhshi, a native of California now living in Israel, said he first realized the medical marijuana’s potential when he was undergoing chemotherapy for male breast cancer.

He got a prescription for marijuana, and said the change was almost instantaneous.

“The cramp went away, my appetite came back,” he said.

The Jeannette warehouse is Herzl’s first foray into American real estate, though Bakhshi manages residential properties in several states, he said.

Ashley Colen, CEO of Hippocratic Growth, founded the Ash and Ember marijuana dispensary in Maryland with her sister, Paige Colen, after working in the California marijuana industry for a while.

“We’ve been trying to bring it east,” she said.

“There are a lot of people in Jeannette who need jobs, and we’re excited to make an impact on the community,” Colen said.

Bakhshi said he’s met with Jeannette city officials about the company’s plans.

City Clerk Michelle Langdon said the city has no comment about the proposed facility.

It’s far from a sure thing. Hippocratic Growth is one of 91 companies in the state, and four in Westmoreland County, that have applied to build a grower/processor. The state plans to award permits to 13 growers later this year.

This is Hippocratic Growth’s second attempt at operating a grower/processor in Pennsylvania. The company proposed a facility near Philadelphia, but was not chosen when the state selected permitees last year.

Bakhshi said Herzl Capital and its partner investors in Israel were looking for an American cannabis company to partner with for a medical marijuana endeavor.

He interviewed several companies that applied for Pennsylvania’s first round of permits, and decided Hippocratic Growth had the best shot of approval.

“Our odds now have so much to do with the partners we brought in.”

One other partner is Nextage Innovation, an Israeli cannabis research company.

Israel is one of three countries with government-funded cannabis research, and scientists there are eager to expand their work into the United States, said Abraham Draeazen, CEO of NextAge.

“With Hippocratic Growth, we are looking to have a strategic partner within the American market that is viewing the cannabis industry in the same way we do, as a medical arena where you should strive for the most safe and most consistent products,”

He hopes to conduct clinical research in America through the Jeannette facility, with the goal of developing new marijuana-based medicines that might someday be approved by the Food and Drug Administration.

The FDA has approved only one cannabis-based drug, used to treat seizures, according to the agency.

“This is the beginning of more and more products,” Draezen said.

Herzl Capital and Hippocratic Growth are also hoping their chosen location will serve them well.

The state has not designated Jeannette as an official financially-distressed municipality -- only a few communities are, including Duquesne. These municipalities are given bonus points on the rubric by which the state measures application.

Though it does not qualify for that metric, doing business there is cheap, and the city’s economic struggles will likely be taken into account when the state evaluates Hippocratic Growth’s application, Bakhshi said.

A facility’s “community impact” counts for about 10 percent of its score, based on job creation and site selection, according to the Department of Health

“Who thought that Jeannette Pennsylvania could be a relevant city in terms of cannabis production and research? And that just happened because of the economic forces coming together,” Bakhshi said.

If the state does not approve the application, Bakhshi said he will find another profitable use for the warehouse.

“It’s kind of a longshot, the path we took, but I’m pretty conservative person, so businesswise it’s not that big of a risk,” he said.

Gov. Tom Wolf signed a medical marijuana bill into law in April 2016. Dispensaries opened in February.

Under state law, patients can apply for a state-issued medical marijuana card if a doctor certifies they have one of 21 qualifying medical conditions, including epilepsy, cancer, Crohn’s disease, multiple sclerosis and seizure disorders.

Qualified patients with a doctor’s recommendation will receive a Pennsylvania medical marijuana ID card, allowing purchases from an author­ized state-licensed medical marijuana dispensary.

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