Lume Cannabis looks to expand grow facility

Annexation of Evart Township property requested

EVART TOWNSHIP - Representatives from Lume Cannabis Company spoke with Evart Township officials regarding plans to expand their grow facility in Evart at a recent township board meeting.

Lume officials approached the City of Evart recently to request an annexation of property they purchased that resides in Evart Township for the purpose of their expansion.

Evart city officials and Evart Township officials have since been in discussion regarding the annexation of the property.

Kevin Kuethe, director of cultivation at the Evart facility, told the board of trustees that they are looking to expand their 60,000 square foot facility to around 200,000 square feet.

"We hope to expand to 200,000 square feet in phases, with the first expansion adding around 80,000 square feet," Kuethe said. "That is the future of our agenda."

Kuethe said the current facility has been operational for one year and employees over 100 people, and with the expansion an additional 150 employees will be added.

"Business has been great so far, and we have been able to give back to the community in the form of a $150,000 donation to Evart Promise and an additional donation to the Champions of Evart," he said. "Whatever we can do to be a part of the community, we try to do."

"We are sensitive to the idea that cannabis is a controversial issue," he continued. "We are trying to be good stewards of the community by doing what we can to give back."

In addressing some of the concerns about the facility, Kuethe said the company is continually working to mitigate any odor that emits from the facility.

"In the expansion, there will be lot of time, money and effort that will go into mitigating odor," Kuethe said. "We will be implementing new technology that is available similar to what wastewater treatment plants use to control odor."

"Another big issue is security," he continued. "We currently have three separate monitoring services for security at our plant. In addition, we have over 200 cameras inside and outside of the facility and we are guarded by a 12 foot gated fence with armed guards. All of this will roll over to the new expansion, as well."

Inside security is equally important, Kuethe added, saying they take the operations and biosecurity of the plant very seriously.

"The inside is basically like a hospital," he said. "It is extremely clean, everything from the air filtration system to employees in full PPE is standard inside the building. Employees are in full scrubs with facemasks, gloves, the whole nine yards."

Attorney Eric Williams, who has been advising the township on the annexation proposal, informed those in attendance at the meeting that the city of Evart approached the township with a request to transfer property in Evart Township to the city to accommodate the expansion of the facility.

Williams asked Kuethe if the property in Evart Township was critical to the expansion of the facility, and what the net result would be if the property is not transferred.

"The property is absolutely critical to the expansion plan," Kuethe replied. "Without it that completely changes the ability for us to expand in the capacity that we want and in the most appropriate and most efficient way."

Because the property they currently occupy narrows at one end, it would be difficult to expand without squaring it off, he explained.

"The plan we have now is built around being able to expand onto that piece of property," he said. "Without it, we will have to change the entire design. We looked at getting around using that property several times, and it just doesn't work because the current property is such an awkward shape. To angle a building on there just won't work."

Kuethe explained that the annexation of the property is necessary because the expansion would be a continuation of the current building, and because they are connected it couldn't be in the city and the township at the same time.

"We are trying to be good stewards of the community," Keuthe said. "I know a lot of people are against cannabis, but what this facility can bring to the community - the prosperity it can bring - is important. I believe expanding a facility that is already successful and bringing more dollars into the community will help the city and Evart Township, as well. That is what we are trying to do."

The Evart Township Board of trustees is considering different options regarding the annexation, one being adopting mutual resolutions by the city and the township adjusting the boundary and giving jurisdiction of the property to the city.

Another option is an Act 425 agreement, which is a contractual agreement between the city and the township transferring jurisdiction of the property to the city for economic development purposes.

"My recommendation to the township board would be that you consider the 425 agreement and open negotiations with the city," Williams said. "I don't think it would be wise to turn down the opportunity to negotiate and see what you get from the proposal.

"I would say the 425 agreement is your primary option because it offers more protections and negotiations for the township to achieve some financial return," he continued. "In a 425 agreement, any tax revenue losses would be a negotiating point. The tax revenue should be earmarked to go back to the township so that they are held harmless to the loss of revenue. In addition, you could negotiate for a portion of any increased tax revenue that may result from the expansion."

Kuethe said they are hoping for a decision soon, because they would like to get the expansion up and running by May of 2021.

"We would have moved on this months ago if it had been possible," Kuethe said. "COVID-19 threw a monkey wrench into the plans. Now that construction and engineering are getting back on line, we are looking to move as quickly as possible."

The township board did not take any action on the annexation proposal.

"There will probably be contacts made with city officials to further discuss our options in the next month or so, and then at some point in the future the township board will make a decision," Township Supervisor Doug Derscheid said.