How will a planned medical-marijuana facility in McKeesport benefit those who live there?

McKeesport Mayor Mike Cherepko didn’t know much about medicinal cannabis when he was first approached by a company looking to build a growing facility in his community. But after learning about the health-care benefits of the marijuana plant, he now considers himself an advocate for its use as medicine.

“It gave me the opportunity to educate myself about medicinal cannabis,” Cherepko says. “When you hear the success stories [and] the tremendous impact it can have on individuals with certain disabilities and illnesses, it’s unbelievable. 

“It’s heartwarming to see just how some of these people’s lives have changed once they were able to have access to medicinal cannabis.”

Last month, the company that first approached Cherepko, PurePenn LLC, was approved by the Pennsylvania regulators to build the medical-marijuana-growing operation in McKeesport. PurePenn was one of 12 grower/processors selected June 20 to receive a permit from the Pennsylvania Department of Health. Since then, the department has granted 27 permits for medical-marijuana dispensaries.

“We’re really excited here in the city to be on the forefront of this new and upcoming industry,” says Cherepko, “and to be part of the positive impact it’s going to have on health care here in the state of Pennsylvania.” 

Medical marijuana, for use in pain management, nausea, seizures and symptoms related to 17 serious medical conditions, was legalized in Pennsylvania in April 2016 after years of debate in the state legislature. While much of the debate centered around the positive impact the medicinal plant would provide to patients, proponents also emphasized the economic impact such an industry would have on communities across the state.

According to a fiscal-impact report, released last April, state officials estimated application and registration fees would net $10 million within a year. Additionally, the state will collect a 5 percent tax on medical-marijuana purchases. In California, medical marijuana generates about $50 million in tax revenue annually.

“Medical marijuana will help those who suffer from debilitating pain and serious medical conditions,” Pennsylvania Sen. Jim Brewster (D-McKeesport) said in a statement when the permits were announced. “Plus, the new permit will bring jobs and economic development to the region. The new industry in the city will attract other businesses who will want to locate near the facility and create spin-off businesses that will generate additional work for local residents. The entire economy of the region will be improved.  

“This is another large step in the rebuilding of the city and region. It is certainly good news for the city and the area as a whole.”

Located in the Monongahela Valley, McKeesport is one of those towns hit hard by the declining steel industry. The median income there is $28,000 per year, 50 percent less than the county, state and national averages. Additionally, vacant residential and industrial properties litter the community. 

Cherepko says the new facility is just what his city needs. Combined with other companies that are moving into the area, he says there are ample opportunities for economic growth on the horizon. And PurePenn says it’s committed to making it a reality. 

“Time will tell exactly what benefits will come from having medicinal cannabis here in town and the production facility,” says Cherepko. “In other places throughout the country where states have legalized medicinal cannabis, you hear stories of cities that may have been struggling in certain ways, and it really helped them. 

“Many of us throughout the entire Mon Valley have been in very similar situations here since the collapse of the steel industry in the ’80s, and I think it’s a big win for us.” 

McKeesport has a population of nearly 19,000 and its unemployment rate is 7.3 percent, four points above the national average. According to the FBI’s uniform crime reports for 2015, the most recent year available, McKeesport’s crime rate is 114 percent higher than the Pennsylvania average and 59 percent higher than the national average.

But the city’s history of adversity is exactly what attracted PurePenn CEO Gabe Perlow to the city. 

“McKeesport had land that was affordable — open vacant land that was easily developable,” says Perlow, a Pittsburgh attorney whose background is in real-estate development. “It also has some good strong bones from its foundation in the steel industry. It might’ve fallen on hard times, but I could see it being ready for an influx of redevelopment. By bringing this operation there, it’s just the first step of revitalizing the town.”

PurePenn has pledged to begin construction of the facility within 30 days of the June 20 announcement and will also be holding job fairs and a community event. Perlow says the plan is to have a fully functioning facility up and running by January 2018, the state’s deadline. 

PurePenn’s 21,000-square-foot facility will be built on five acres in the RIDC Industrial Center of McKeesport. Perlow says the facility will grow as market demand increases, and this will lead to additional job opportunities. PurePenn estimates that, in addition to temporary construction jobs, it will have an initial workforce of 10 people, which could increase with market growth to upwards of 75 employees.

“The work ethic of the citizens of the Mon Valley, those who used to work in the mills, that never went away,” says Perlow. “So, we wanted to be in an area we could pull a diverse and strong workforce from. There are highly skilled workers who never left the Mon Valley area, and they just need the jobs to get back to work. We have a commitment to hiring in McKeesport for that reason.”

So, what exactly will those jobs look like? Rosie Yagielo is the president of HempStaff, a national professional training and staffing company working in the medical-marijuana industry. Her company recently conducted a training seminar in Pittsburgh, and she says Pennsylvania should expect to see job growth across the state. 

“Just think about the amount of jobs that come on board every time a new state opens up a [medical-marijuana] program,” Yagielo says. “If you’ve got 150 dispensaries and an average of five to six folks working in them — not to mention there’s going to be 25 cultivation/processing centers with another 40 to 50 people each — that’s a lot of people that get jobs, and it’s bringing down the state’s unemployment a notch at a time.” 

According to HempStaff, each manufacturing facility has an average of 32 employees, a cultivation center has an average of 26, and testing facilities employ an additional 12 people. Jobs include a master grower, security, a cultivation supervisor or assistant grower, extractors, trimmers and other cultivation site workers. 

While positions at the top of the organization, like master growers and cultivation supervisors, might require at least four to five years of experience, Yagielo says other positions like trimmers and general cultivation site workers are entry level. She also says these organizations tend to promote from within. According to Cannabis Training University, a company similar to HempStaff, trimmers start at about $12 per hour and can work up to jobs that pay $25-30 per hour.

“The site workers are generally the people who start off doing everything. One day their job might be working as a trimmer; the next day it could be something else,” says Yagielo. “They learn a little about everything, and usually the master cultivator is watching everyone to see who shines and who doesn’t. The ones that shine are obviously the ones they usually groom to go further into a supervisory position.”

Perlow’s plans for the McKeesport facility are on par with these national trends. He says employees just have to be age 18 and over. 

“We have a wide range of positions available,” Perlow says. “For packagers, there’s minimal to no experience required. But there are some other jobs that require some kind of advance degree from agricultural specialists, to our lead laboratory technicians. It’s a wide range, and it won’t be unheard of for someone who starts as a packager to move up, whether it’s through the agricultural side, laboratory side or even sales and marketing.”

One additional restriction mandated by the state is that employees cannot have a drug charge on their record for any kind of controlled substance. 

PurePenn’s economic-development plan was approved unanimously by McKeesport’s Planning Commission and City Council. It includes “extensive safety measures; a community outreach component with financial support for McKeesport; and a commitment to hire local workers and provide them with good pay, health-care benefits and educational opportunities.” 

“When I initially heard about the facility coming to the area, I was apprehensive,” says Fawn Walker-Montgomery, a McKeesport city councilor and lifelong resident. “But I did some research and saw the benefits the treatment can give to families. It will also benefit us to be at the forefront of this medical research, in addition to the jobs it can bring to our area.”  

As part of the McKeesport community fund, PurePenn plans to create a community-benefit organization with members from both PurePenn and the McKeesport community on the board. PurePenn will commit a percentage of its revenue to the fund, as well as an initial investment to get the fund started early on before making revenue.  

“It’s going to be there for different opportunities in the city of McKeesport, to help support some of the other groups, organizations and events that go on in the city,” says Mayor Cherepko. “There will be a fund set up to really have PurePenn play a part in our community. PurePenn has made it very clear they want to be a good partner with the city of McKeesport, and I truly believe they will be.”

All these commitments PurePenn has made are why Cherepko has been singing its praises. He says concerns that the new facility won’t benefit McKeesport residents are unfounded, and he’s looking forward to building a stronger city for his residents. 

“They’re trying to make sure their employees are going to have careers here. They’re going to be able to raise a family, support a family,” Cherepko says. “Here in the city of McKeesport, we’re hoping to give people the opportunity to be a part of the foundation we really need … to take the city forward into the future. Without a question, it helps with that no matter what the numbers are. Your naysayers are really quick to say it’s only 60 to 100 jobs, but you have to start somewhere.”

This article appears in Jul 5-11, 2017.