Legal pot in Nevada, one year later: Miles Construction, the contractor behind MedMen projects, capitalizing on a booming industry
As the state of Nevada nears its 1-year anniversary (July 1, 2018) of legal recreational cannabis sales, the Northern Nevada Business View is rolling out a series of stories regarding the state of the industry one year later; what’s changed (or stayed static) over the past 12 months; and what opportunities and solutions exist for the future of this sector of business across Northern Nevada.
This is the third story in that series, published June 18.
Click here to read part one, published June 14, about the evolution of Nevada’s cannabis industry from a cash-only business to one that is slowly being accepted by banks and credit unions.
Click here to read part two, published June 15, covering the many different products cannabis dispensaries offer, as well as the difference (and similarities) with various pot laws in Nevada and California.
Look to www.nnbusinessview.com in the coming days for more coverage.
RENO, Nev. — Cary Richardson breaks into a smile and laughs.
“There’s not any one particular huge hurdle, as much as …” says Richardson, pausing as his smile widens, “… all the hurdles are the first time someone’s running the race.”
Tucked inside the Miles Construction offices just outside of Carson City, Richardson, the company’s vice president and senior project manager, is talking about the challenges contractors face while operating in Northern Nevada’s nascent cannabis industry.
In 2014, Miles Construction moved into the cannabis space thanks to, quite simply, being in the right place at the right time. That year, MedMen, a Los Angeles-based cannabis company, had its contractor fall through on its planned $15 million marijuana factory in Mustang, Nev., east of Reno.
READ MORE: MedMen, which opened Nevada’s biggest pot plant, goes public in Canada
Outside of working in construction, Richardson just so happened to be a Nevada license holder for marijuana cultivation and production with MedMen. Stars aligned.
“They were like, ‘we’ve got to get going right away — Cary, can you help us out?’” recalled Richardson, who initially saw the cannabis project as a one-off. “I thought, ‘OK, it’s a steel building, it’s advanced manufacturing, it’s in our backyard … sure.’ It was logical to step in and fill that role for that one project.”
Four years later, Miles Construction has kept its work boots dug into the budding marijuana industry. The Carson City-based contractor’s blueprints have gone from one to roughly 10 cannabis projects in Nevada and California that are either designed, under construction or completed.
‘We saw other opportunities’
With the legalization of recreational cannabis kicking off in the Silver State a year ago in July 2017, the demand for contractors to build cultivation and production facilities has grown in Northern Nevada and beyond.
“As we were in that (cannabis) space, we saw other opportunities,” Richardson shrugged. “I became familiar with several other groups of people and they came to me and said, ‘hey, would you build our facility, too?’”
Right out of the gate, though, Miles Construction quickly realized that building a marijuana factory was a different beast than, say, constructing a distribution center. The days of simply throwing up a basic shell and handing it off to the owner were gone.
Miles Construction, Richardson found, needed to be coordinating the cannabis facilities’ every nook and cranny — from the water system to the greenhouse — all while navigating ever-changing state regulations and county ordinances.
“It’s not a simple matter of here’s my building plans,” Richardson said. “It’s here’s my building plans; here’s all the chemicals and MSDS (Material Safety Data Sheets); here’s all the equipment; here’s all the engineering reports on the equipment that doesn’t have a UL listing yet; here’s all the operational and procedural processes that we’re going to go through; here’s all the reporting we’re going to be doing on the security side of things.
“So there are a lot of different aspects that don’t exist in other industries.”
Needless to say, Miles Construction encountered a row of obstacles while building the 45,000-square-foot MedMen Mustang facility, which held a ribbon-cutting ceremony April 11.
Chief among them: the state only permits cannabis cultivation in a greenhouse if the marijuana plants are not visible from the outside — not even from the sky.
“So how are you going to build a greenhouse that you can’t see inside of?” Richardson said they asked themselves.
And so, MedMen and Systems USA, the manufacturer of the 26,000-square-foot state-of-the-art Dutch greenhouse in the Mustang facility, analyzed the requirements and came up with a relatively simple solution: put an opaque finish on the roof and use insulated wall panels.
“The rules just said you can’t be able to determine whether or not it’s marijuana — you can still tell that there’s something green in there,” Richardson said. “When we changed the plans, there were a lot of people that came up to us and said, ‘you can’t do greenhouses (like that) in Nevada, didn’t you read the rules?’ Oh, we read them with a fine-tooth comb. So we were the first ones really to push through to say, ‘hey, we can do this.’”
Richardson said it was a game-changer for the industry, pointing to the advantages a greenhouse, as opposed to an indoor grow, offers a marijuana factory.
Specifically, he said, using Mother Nature — Nevada has some 300 days of sunshine a year, after all — reduces not only the facility’s energy costs, but also the cost per pound, long-term, for cultivating.
‘Constructing AN INDUSTRY’
With that, Richardson said building the MedMen Mustang project — which Miles Construction is replicating in Desert Hot Springs, Calif., and that same-sized facility is expected to open in early 2019 — had a pioneering quality to it all.
So much so that Adam Bierman, co-founder and CEO of MedMen, said the new facility east of Reno is “undoubtedly the most high-tech marijuana factory in the world” at the grand opening on April 11.
The expansive MedMen Mustang includes: butane and CO2 extraction rooms; bakery and chocolate kitchen rooms; a tissue culture lab to clone the plants and strains; a high-tech test lab; and a flowering room with a 25,000-plant capacity.
The factory, which expects its first harvest this July, is set up to produce 10,000 pounds of high-quality marijuana annually to supply Nevada’s burgeoning industry.
“It wasn’t really just about building that building, it was about constructing an industry,” Richardson said. “There wasn’t that precedent and nobody wanted to be the one to set the precedent of yeah, this is acceptable in the state of Nevada.”
Being a new industry, it adds many unique wrinkles for building officials in Northern Nevada.
‘A PARTNERING APPROACH’
According to the Washoe County building and planning department, marijuana establishments are reviewed under two separate, but connected, components: the permitting and use of the physical building, and the licensing and use as a marijuana establishment.
“There is increased care and scrutiny by all reviewing agencies with any marijuana establishment, not only because of the two components, but also in recognition of potential federal prosecution and litigation if the federal government decides to step in on the state’s ability to regulate marijuana,” county officials said in an email to the NNBV.
The county works with the state during the initial permit and license review before ultimately issuing a building permit and marijuana establishment license. The state issues either a certification for medical marijuana facilities or a license for a recreational marijuana facility.
The county told the NNBV that the Northern Nevada building departments went through a major discussion to understand how best to handle cannabis projects within the existing/adopted building code requirements.
The challenges in the design and structure of a building for marijuana cultivation are many. According to Washoe County, they include: separate growing rooms to minimize the spread of disease and isolate different marijuana strains; unique lighting requirements to provide specific wavelengths of light at different times during the plant growth; temperature controls for each of the growing rooms; provisions for the disposal of marijuana waste products, among others.
Richardson noted that the Nevada Department of Taxation and Washoe County building and planning departments have been “really good to work with” during the building of their cannabis projects.
Miles Construction in February finished refurbishing an old warehouse in Verdi into a marijuana factory for cannabis company SRENE.
“(The departments) are definitely taking a partnering approach, not only with the contractor but the end-user,” Richardson said. “They’re not creating and adversarial relationship within the industry. The want people to do the right thing and succeed.”
Daniel Yi, VP of corporate communications at MedMen, said that played a large role in the company’s decision to plant a marijuana facility in Northern Nevada.
“Washoe County is very welcoming of cannabis businesses,” Yi said. “For our factory there (in Mustang), that was a huge component.”
Per the agreement, Caesars will continue to operate Harrah’s for the first half of 2020 before it’s redeveloped into a non-gaming hotel and mixed-use development.