Old mills get a new lease from cannabis
Massachusetts is home to dozens of old textile and paper mills that once thrived, making the state a manufacturing powerhouse.
By the 1950s, those industry jobs moved south and the mill buildings deteriorated from decades of neglect. Many have been repurposed as apartments or smaller businesses. Some have been torn down.
But one unlikely industry is bringing them back: cannabis.
Since the legalization of medical and recreational cannabis in 2012 and 2016, cannabis companies have been buying and leasing these relics of industrialization. There are a few reasons why: quicker profits, availability, and the negative stigma that surrounds weed.
When it comes to profits, “first to market” is a common goal for any company. According to architect Brian Anderson of Anderson Porter Design, an architectural firm in Cambridge that specializes in cannabis cultivation facilities, the old mills and warehouses are easier and quicker to set up than building from scratch.
“Investors want to see profits as fast as possible, so the quicker they can get the business off the ground the better,” Anderson said.
But the upfront costs of renovating these buildings can be prohibitive. According to Justine Snyder, president of the Realtors Commercial Alliance of Massachusetts, out-of-state syndicates of large cannabis corporations, with deeper pockets, are revitalizing these old buildings. For example, in Holyoke, a former mill space is already operating as a marijuana cultivation center after a $10 million investment by Green Thumb Industries (GTI), a cannabis company based in Chicago betting on a wave of East Coast legalization.
Holyoke is well known for being welcoming to cannabis companies. The city has numerous advantages, such as 1.5 million square feet of vacant building space and, due to running on 80 percent hydropower, one of the cheapest utility rates in the state. Mayor Alex Morse said in an e-mail he welcomes the tax revenue the industry will bring. “We would expect a sizeable impact from real estate tax receipts from companies that invest significantly in industrial properties, particularly those that were in roughest shape.”
Many of these buildings have three major but rectifiable problems: asbestos, mold, and dubious electrical wiring. Cleaning out the asbestos and mold are often the first steps. Architects and builders have had to take extraordinary cost measures to overcome mold in the roof, for example. As for power, often the utility companies will install new wiring for free knowing they’ll reap the benefits later.
In addition, cannabis and hemp are bio-accumulators and literally absorb heavy metals. That’s great if you want to clean up a toxic waste site. Not so great if you’re producing consumables.
“This is a product that crosses the blood-brain barrier; you can’t grow in a contaminated space,” Anderson said. In fact, it’s standard protocol in the industry to grow cannabis in an environment more similar to a biomedical facility than a paper or textile mill.
One way cannabis companies make these old buildings clean and nontoxic for the plants, according to Noni Goldman, chief executive of QIC Cultivation & QIC Consulting, is to retrofit the building with stackable modules or “plug and play” grow boxes, which look like shipping containers. Two companies in Massachusetts, Agdaptive and Stem Cultivation, do this kind of “controlled environment” retrofitting. The climate-controlled grow boxes mitigate the environmental risks that may linger in a warehouse.
Also, companies tend to cover damaged floors with heavy-duty epoxy, which makes them easy to clean. All in all, the “mill girls” of yore would hardly recognize the pharmaceutical grade interiors of these mills today.
The stigma of cannabis is also a factor in the revitalization of these mills. Half of the cities and towns in Massachusetts have placed bans or moratoriums on cannabis businesses, which has shrunk available properties. At the same time, cities and towns welcoming these companies — “Gateway Cities” like Holyoke, Fitchburg, Lowell, and others — have a shortage of modern facilities.
“Because it [cannabis] was in prohibition for so long the industry understands stigma. They’re willing to exist in places other industries aren’t,” Anderson said.
Also because of the stigma, Snyder finds buyers will sometimes make deals with owners. “To get things going they might offer owners a little piece of the business if they let them use their building,” she said.
Snyder has found cannabis companies look at up to 10 places before negotiations get serious. “In this industry there aren’t many places perfectly suited so we need to evaluate pros and cons of each site.”
Also, being a new industry, cannabis regulations are still evolving and, therefore, are being interpreted differently by different parties.
“There has to be collaboration and agreement with many people: landlords, electrical, plumbing, etc.,” Snyder said. “It’s been a learning curve for everyone.”
Many towns have concerns about odor, security, and loitering. However, odor becomes minimal with indoor grows, especially when windows are blocked and carbon filters are installed. For security and loitering, these businesses must follow strict measures enforced and approved by the state’s Cannabis Control Commission and local fire and police departments.
Morse sees the cannabis industry as making a wider impact than jobs and tax revenue. “Having a concentration of those businesses here . . . means Holyoke can develop an expertise in servicing the industry. . . . Other companies dedicated to servicing the industry can also start and grow in Holyoke and our surrounding communities.”
There is hope more local cannabis companies will be able to afford these large cultivation properties when they can get bank loans. Right now banks are nervous about doing business with cannabis ventures because it is still illegal under federal law.
Goldman, whose South Weymouth company QIC Cultivation is looking for property, believes being local helps.
“If you’re scrappy and industrious and use your network, you may find owners who have never thought about the cannabis market but are willing to have a conversation,” she said. “Personal connection is something these big dogs don’t have.”