Jan. 14—CUMBERLAND — Medical cannabis producer Grow West MD is seeking to raise $20 million in capital to solidify future expansion plans for the company's operations in Cumberland.

Although part of the process for raising capital includes listing its assets for sale, CEO William Valois says that Grow West is not being sold or requesting relocation.

"We are locals and you got us for the long haul," Valois said. "This means we are locking ourselves in to be able to finish our build out of our entire Kelly (Road) facility."

Grow West, which employs 150 people, is one of Allegany County's largest employers. The company began operations in the former Kelly-Springfield Tire Co. complex in March 2018 followed by construction of a dispensary on Industrial Boulevard in South Cumberland the next year.

Entrepreneurs in the cannabis industry have faced challenges from state and federal laws that are not in sync. While a state such as Maryland has legalized marijuana, federal law does not. The discrepancies have made banking a challenge.

Part of the process of raising capital in an industry that does not qualify for standard banking methods is listing the business for sale on online platforms such as LoopNet or the Commercial Cafe. Grow West listed its assets with a price tag of $36 million.

However, Valois said the process is not to be taken literally.

"By no means is Grow West for sale," Valois said. "We are fortunate enough to have a great project here and a great location which we are looking to take advantage to further grow out our capacity in preparation for recreational (cannabis) use."

Maryland voters approved a constitutional amendment in November to legalize recreational marijuana, and the General Assembly will be ironing out the details for awarding licenses and taxation during its session that started Wednesday.

Valois said the addition of recreational marijuana will strengthen the industry and economy.

"If we take advantage of this, it can help Maryland in a lot of ways — whether it's safety, providing medicine to end users and further bolstering a strong industry in Maryland," he said. "The sooner we can get it done, the better. It is important we can get this done for the people who are waiting for this."

Ongoing efforts have been made, including the introduction of the SAFE Banking Act, to ease restriction on banking methods for cannabis producers. However, the Act has yet to be ratified.

"The SAFE Banking Act has stalled in Congress multiple times now," said Brandon Butler, a consultant with Pinnacle Strategies, which works with Grow West. "Grow West has been very creative in the way that they've been able to invest in our community and they have to continue to be creative. So the company is not for sale. It's about accelerating their efforts for continued investment."

Valois said the process of leveraging includes listing the business.

"This is a practice that most retail operations utilize whether it is a shopping center, mall or any sort of fast food restaurant," said Valois. "They use this ... they acquire land and build and then through a sale lease-back somebody else owns the property that it lives on and the company makes payments and they are tied into a long-term contract.

"It's a standard business practice that can help a company capitalize and further invest," he said. "It's often used for a company to expand its footprint."

Butler said Grow West is an "incredibly innovative company."

"What they are doing is accessing the equity they have in the investment made in the Allegany County community and then build upon itself," he said. "They invested over $13 million initially to begin operations. They added nearly 12 acres and began a $20 million expansion in 2021 and now they are in the middle of a $20 million capital raise that is going to lead to more investments.

"They have to do business in a unique way and we are very fortunate that they are one of the top employers in the region and they plan to continue to do so for a very long time."

Greg Larry is a reporter at the Cumberland Times-News. To reach him, call 304-639-4951, email glarry@times-news.com and follow him on Twitter @GregLarryCTN.