SOUTH BUFFALO — Construction of a new $200 million marijuana production and growing facility is scheduled to resume. The long-awaited project is finally moving forward, with construction likely starting in a few weeks and the first phase potentially opening for business next summer.
Plans for the cannabis complex were in flux as recently as last September due to the delayed rollout of New York State’s legal cannabis industry. In light of the looming uncertainty surrounding this, the organization that owns the land granted Zephyr Investors, the project’s developer, a two-year extension to close on its purchase last October.
Even though the final laws have yet to be enacted, NY’s legal cannabis market has begun to take shape. By the end of the year, cannabis sales are anticipated to begin, and the state has already granted licenses to more than 200 cannabis growers. Zephyr is therefore resuming its preparations to build the massive marijuana production and processing facility in the Buffalo Lakeside Commerce Park, located just south of the city near the lake Erie waterfront.
The project has already been given city planning approval. It is now asking the Erie County Industrial Development Agency for $1.3 million in sales and mortgage tax benefits as well as an extended, significantly more beneficial 14-year property tax discount.
The proposal still has obstacles to overcome. Zephyr also needs state approval, which is not a guarantee, in order to begin operations. Therefore, in an effort to hasten that process, it has joined forces with a Canadian real estate company backed by a significant corporation and one of the top holders of a medical cannabis license in the state, which will manage the local plant. Supporters anticipate that collaborating with an established brand will improve the project itself and make it simpler to win the state’s approval.
According to an application Zephyr sent to the ECIDA, the Encinitas, California-based company will construct and equip the cannabis growing and manufacturing project but will then sublease the entire area to Toronto-based RIV Capital and its subsidiary, Etain LLC. Scotts Miracle-Gro owns almost 50% of RIV Capital. According to the proposal, Etain will oversee the production, packaging, and distribution of the cannabis products, with an emphasis on both legal recreational and medical cannabis.
Etain is NY’s only woman-owned medical cannabis business. It is one of the state’s original five medical cannabis license holders and one of the 10 companies currently licensed by the state. Eventually, these companies will also be authorized to operate in the new adult-use program. According to Zephyr, Etain submitted an application to the Office of Cannabis Management in June to add Buffalo to its current license. Once medical license holders are allowed to enter the adult-use market, Etain anticipates being able to open four more dispensaries.
The arrangement supports Zephyr CEO Brad Termini’s aspirations to develop a “high-tech cannabis campus” on 72.4 acres of undeveloped brownfield land in the Buffalo Urban Development Corp. business park. Zephyr has a contract to buy that land, which consists of eight parcels, totalling $1.9 million. The first part of the deal is scheduled to close soon, subject to ECIDA and other clearances.
Ultimately, plans call for the site to be remedied through the state’s Brownfield Cleanup Program, then converted into more than 1.375 million square feet of growing and production space. The land was close to a former steel mill and is polluted with slag fill materials, hydrocarbons, and metals.
The initial phase of the proposal would include spending $425,000 to buy 10.8 acres of unimproved land at 310 Ship Canal Parkway, only 5.3 acres of which can be utilized. Then, a 75,040-square-foot cultivation and manufacturing plant with two one-story steel-framed structures and 72 surface parking spaces would be built.
Zephyr stated in its application that “the long-term aim is to continue expansion at the site as the New York State market matures over time,” stating a target of 211,000 square feet with three buildings. Products will comprise of unprocessed cannabis flower as well as extracts, oils, and edibles derived from cannabis for adult use.
Within two years, it is estimated that 20 new full-time positions and 34 new part-time jobs will be generated, paying salaries ranging from $30,000 to $150,000. The total cost is $27.8 million for the first phase. There will be positions in skilled manufacturing, product development, maintenance, packing, management, and marketing.
This story was first reported by the Buffalo News.
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