Missouri town expects to thrive from medical marijuana
CARROLLTON, Mo. (AP) — An armed guard and a fence trimmed with barbed wire are the only signs of what lies within the plain metal building behind the police department.
Driving around, you're more likely to notice the quaint town square or the 36-acre community park than this windowless, beige building set within a quiet industrial park.
But this facility, marked with not a single sign outside, is at the forefront of the state's newest industry. And folks all around Carrollton, home to about 3,600 people, are banking on a big economic boost from an unlikely source.
Inside this building, workers carefully tend to a green sea of pot plants under a canopy of blinding lights. The smell is unmistakable.
C4, short for Carroll County Cannabis Co., expects its first harvest of medical marijuana this week, putting legal retail pot sales ever closer to patients for the first time in Missouri history. The Kansas City Star reports that founder Ty Klein is a Carrollton native and decided to move back home, bringing the marijuana business with him.
Missouri approved cultivation facilities and dispensaries across the state, in metro areas and small communities alike. But Klein believes Carrollton is poised to become a marijuana mecca. His company won three coveted licenses to grow marijuana across two buildings and another license to manufacture marijuana-infused products like gummies and brownies. And a separate cultivation and manufacturing facility is set to open nearby.
"Per capita, Carrollton is going to be the cannabis capital of Missouri," Klein said. "It truly is."
Klein, who plans to mainly supply dispensaries in the Kansas City area, met with several communities before landing on Carrollton. The city and county supported the venture by investing in infrastructure and providing tax incentives.
"I doubt there's another weed shop next door to a police station anywhere in the country," he said. "And they're excited about it. They really steered me down here."
Of course, there were lots of questions and concerns early on.
"Number one, the word marijuana to a bunch of us old conservative rednecks. … You say, 'Really, we're going to grow marijuana in Carrollton?'" said Stan Falke, Carroll County's presiding commissioner.
But the more people learned about the industry, the more comfortable they grew, he said. Knowing that C4 grows everything indoors in a secure, nondescript facility has eased concerns.
"They've done a great job. They're not hiding, but they're not stuffing it down the throats of people that might be opposed," Falke said.
Not everyone here is enthusiastic about pot. Around town, some people didn't want to be interviewed about the budding industry, knowing it remains a divisive issue.
"There will always be rough edges," Falke said. "We have a conservative base. You're not going to change their minds."
Carrollton is the seat of Carroll County, where President Donald Trump won nearly 80% of the vote in 2016 — statewide, Trump carried 56.4% support.
But many people here acknowledge the rare opportunity provided by the state's burgeoning marijuana business. Rural communities across the Midwest have suffered through decades of population decline and job losses, as people increasingly flocked to cities. Like other small towns, Carrollton has lost major employers and retailers over the years. If C4 grows as anticipated, it could become one of the area's largest employers.
"We just haven't had a lot of opportunity for growth of this type," Falke said. "We've taken some hits, so the opportunity now to overcome those with new industry, we're just really excited."
C4's arrival is the first time a major employer has moved to the area in at least a decade, said Anna Barlow, director of the Carroll County Chamber of Commerce. Much of the local economy revolves around farming, and the local hospital and schools are the area's largest employers.
"These are really good paying jobs with benefits. That's more difficult to find in our community," Barlow said. "The boost to our economy is definitely something we haven't seen for a long time."
Patients have been waiting for the build-out of the state's pot industry since voters approved a constitutional amendment in November 2018 sanctioning medical marijuana.
Those who qualify for the program can currently grow plants at home, but the industry is expected to boom in the coming months as commercial growers and retail dispensaries begin to market products en masse.
The state offered licenses to only a fraction of those who applied to grow, manufacture and sell marijuana products. Since then, the program has been under fire as politicians and spurned applicants accuse state officials of conflicts of interests and irregularities in the scoring process.
Hundreds of administrative appeals and lawsuits have piled up. And earlier this month, Missouri House Democrats accused the state agency responsible for regulating the medical marijuana program of obstructing an oversight committee's examination of the work.
But for all the controversy, the industry continues to mature across the state.
Just outside of St. Louis, Earth City-based BeLeaf Medical, the state's first approved cultivator, is reportedly nearing its first harvest. And Carrolton's C4 company hopes to start cutting its plants in early October.
The state licensed several Kansas City-area cultivators, along with 40 dispensaries. Some of those retail stores plan to open their doors as early as October, but industry experts say supply and variety are likely to be limited as the earliest growers bring in their first harvests.
Across the state, only five cultivation facilities and six dispensaries have received final approval to open, according to the Missouri Department of Health and Senior Services.
After it's harvested, the product must go through state-mandated testing. Then it must be dried, and in some cases, processed into other products like gummies or vape cartridges. Klein hopes to get his product into some Kansas City area dispensaries by the end of October.
But even then, the industry will take months to develop as most dispensaries have yet to open.
"There's no product. So why would they open?" said Kansas City attorney Christopher McHugh. "It's kind of a chicken-or-egg thing."
His company won three separate licenses for marijuana cultivation, manufacturing and a dispensary in St. Joseph. Even as patients grow anxious over waiting, he said the market is a ways off from maturity.
His firm plans to start growing pot sometime in December. He said some dispensaries have waited to open, worried over the possibility of high prices or low quality with the first rounds of harvests.
"The market has not developed to the point where you would be able to meet the expectations of the typical patient, which would be like walking into the typical supermarket where you have lots of variety and product," he said. "The machine just isn't running at full power yet."
The Missouri Medical Cannabis Trade Association predicted the industry would create 4,000 jobs and pump half a billion dollars into Missouri's economy each year.
"Our members alone are out there as we speak spending tens of millions of dollars locally in communities," said Jack Cardetti, spokesman for the trade association.
That investment has come as many go jobless because of the coronavirus pandemic. But Cardetti said it's been particularly helpful in rural communities where cultivators and manufacturers are building new facilities or upgrading abandoned ones.
"The loss of manufacturing jobs over the last two decades has hit rural Missouri particularly hard," he said. "And that's one of the reasons you've seen some of these rural communities really embrace this industry as a new potential for economic activity."
Some of Missouri's more conservative and rural areas have opposed the industry. But many communities cheered on local applicants, appreciating the economic potential. Places like Chillicothe and Kirksville relaxed zoning standards to encourage marijuana businesses. And in some communities, mayors and police chiefs wrote letters of support as applicants competed for licenses.
Cardetti noted that 2018's Amendment 2 won more than 65% percent of the vote, winning in nearly all of Missouri's counties.
"That didn't just happen with urban and suburban voters," said Cardetti, who helped lead the drive for the amendment. "In Carroll County, medical marijuana passed by almost double digits."
Some 70 miles east of Kansas City, Carrollton is the quintessential small town.
Main Street Restaurant sells the classic omelets, pork tenderloins and homemade pies. Across the street, the Romanesque county courthouse towers over the tidy green lawn of the town square.
Over by the high school, pickup trucks fill the gravel lot of Ol' Boys Barbecue at lunch hour. And images of the local mascot, the Trojans, hang on ruby red signs all over town.
But Carrollton houses a mix of vibrancy and decline.
Even on the square, some buildings are boarded up. Little fingers created drawings, like finger paint, on the thick layer of dust covering one storefront.
More than three decades after its closure, people still mourn the loss of the Banquet Foods factory, once the town's largest employer.
"You don't replace 500 jobs," said Mayor Scott Bartlett. "The identity of Carrollton for a long time was with Banquet."
In more recent years, another major employer, Fuller Marketing closed its doors. The name of that company, which made retail displays, is still painted on an old brick building downtown. And just last year, Shopko, the town's big box retailer, closed as that Wisconsin-based chain went out of business.
The mayor has lived those losses personally: Now a loan officer at a local bank, he was previously the manager of the Shopko store. And both his parents worked at the Banquet Foods plant back in its heyday.
Yet he remains bullish on the future. Not just because of the marijuana facilities, but other developments as well. A local bank is expanding. The school system is adding new real estate. The Orscheln Farm & Home store is expanding to move into the old Shopko space. And smaller boutiques and retailers are expanding on the square.
"The town has struggled to get past that," he said of the Banquet facility. "But we have a lot of things now that we didn't have then. We may not have a Starbucks but we've got our own coffee shop. We've got our own brewpub uptown. We've got a lot of things homegrown."
In 2018, the Census reported Carroll County had a median household income of $42,149 — more than $10,000 below the state average of $53,560.
In recent years, doctors, lawyers and pharmacists have come back home to Carrollton after leaving to chase education and careers. And the housing market is heating up with a limited inventory and rising home prices.
"I don't want to say it's a sleepy little town because it's very busy," the mayor said.
With a more diverse economy, Carrollton is no longer a company town. But the mayor said it's just too early to tell whether it might carve out a new identity based on the marijuana business.
Could it be "the cannabis capital of Missouri?"
"I don't know if that moniker would stick or not," he said. But we've all got to be the first at something or good at something."
Inside C4, most employees work with dirt under their fingernails. Soil covers hands, arms and T-shirts as they move pots of pot around the facility.
The work is a mix of hard labor and science. They plant everything by hand, but the temperature, lighting and humidity of each grow room are closely monitored.
The company started growing with seeds but plans to reproduce all plants from clones in the future. In one room, a narrow aisle separates the racks of towering pot plants, almost ready for harvest.
"There's a lot of challenges, because it's brand new," Klein said during a recent tour. "We've never done this before."
A good portion of the structure remains under construction. That's where staff will manufacture marijuana-infused products like gummies and vape cartridges. Outside, crews are preparing a pad for an expansion of the grow operation.
Klein said he's already spent more than $5 million on the business, a mix of personal debt and investment. But he takes pride in making that investment here. He previously ran a construction business that built clean rooms and pharmaceutical labs.
He considered building a marijuana businesses in various locations across Missouri, but felt it would have the most impact — and receive the warmest welcome — in his hometown. Adding a few jobs in, say, Kansas City would be a blip on the radar. But with 20 people already on board in Carrollton, he said it's already making a difference in the community. And he hopes his company alone may soon employ more than 100 people.
At full capacity, the power needed to run the operation will rival the collective electricity demand for the entire community. That's partly why the city-owned utility agreed to build a new substation nearby to ensure reliable power.
Klein runs the operation with his childhood friend Brandon Green, who just moved back to town to work as C4's vice president of sales. The two are hoping to be among the first in the state to harvest product on Oct. 1.
"Then, every 12 days after that we're going to harvest for eternity," Klein said.