How A Hudson Valley Town Turned A Defunct Prison Into A Thriving Cannabis Hub

Just over an hour's drive from New York City, Warwick is one of those Hudson Valley towns perfect for perusing boutiques filled with aromatic candles after a hike to take in the fall foliage. The town was built upon farms, small businesses, and until about a decade ago, a medium-security prison.

The grounds of the shuttered Mid-Orange Correctional Facility, which once counted people locked up on drug offenses among its inmates, have now become populated by cannabis companies that are promising to vitalize economic activity in the area. At least one of those companies, Green Thumb Industries, is framing it as a full-circle story, a chance to right some of the wrongs of the drug war by creating new opportunities in a once derided industry. Whether this justice can be achieved by companies representing the mostly white, corporate face of legal weed remains a point of contention for advocates.

Green Thumb, a Chicago-based marijuana firm that already operates in 12 states and brought in more than $550 million in national sales last year, is the latest tenant to move into the prison-turned-industrial park, situated 10 minutes up a winding road from Warwick's Main Street.

Last month, the company broke ground on a $155 million, 450,000-square-foot cultivation and processing facility on the Warwick campus. Green Thumb has a medical marijuana license that allows it to operate its own dispensaries in New York, but investing in this facility will also enable it to supply products to other companies that will enter the new recreational market the state is developing. Green Thumb has pledged to create at least 175 jobs at the Warwick site with salaries starting at $50,000 within the first three years of operation.

Officials who spoke at the groundbreaking on September 9th held up Green Thumb as exactly the type of company they hoped to continue to lure to the area.

New York State Sen. Mike Martucci admitted he was among the lawmakers initially concerned about legalizing recreational marijuana in New York, which happened at the end of March. But Martucci said he had since embraced the industry as "a productive and positive addition to our area." He was won over by the promise of union-led construction work on new facilities and longer-term jobs in biotech and agriculture, as well as Green Thumb's investment in the local community.

Martucci said he was optimistic about attracting more cannabis companies to the Hudson Valley and suggested that the region's "fertile soil, educated workforce and close proximity to New York City sets us up to be the Silicon Valley for the cannabis industry."

Green Thumb is setting up down the road from Citiva Medical, a subsidiary of iAnthus Holdings—another publicly traded, multi-state cannabis operator with an existing medical marijuana license in New York that gives it an edge over new recreational applicants. Their neighbors include Phyto-Farma Labs, which tests cannabis products—a vital component of a regulated industry—and Urban Xtracts, a giant hemp processing facility where companies can isolate CBD, a non-high-inducing cannabis extract used in a range of consumer products.

A New Legacy

The industrial park the companies occupy, which was completed in 2014, wasn't necessarily developed with cannabis in mind. The idea was to create an attractive replacement for the Mid-Orange Correctional Facility, which once provided the area with some 450 jobs and cheap labor from inmates for local public service projects. Mid-Orange was one of seven prisons former Gov. Andrew Cuomo decided to close in 2011 as a money-saving initiative during a tight budget year.

At the groundbreaking, Town Supervisor Michael Sweeton lauded Mid-Orange as a "great community partner here in our town" and talked about the shock of its closure and the negative impact on local businesses. After the event, he told WNYC/Gothamist he began to consider the economic power of cannabis when hemp—a plant distinguished from marijuana by having very low levels of the high-inducing compound THC—became federally legal in 2018 and became a popular crop in the area.

Ben Kovler, Green Thumb's founder and CEO, sought to acknowledge the irony of occupying a site that once housed people incarcerated on drug crimes. The prison saw its census swell from 750 to 1,000 men with harsher enforcement of drug laws in the 1980s. Some of the prison buildings that are still standing are visible from the construction site.

"We understand what happened with the war on drugs," Kovler told the audience. "We're planning to flip that around, to bring credibility, credentialize the industry. Change is really in the air. Change is happening in the country. Change is happening here."

But replacing the local prison with a cannabis industry doesn't address all the historical inequity connected to the site. Most of the people imprisoned on marijuana charges in America and New York are Black and Hispanic, while the C-suites at Green Thumb and iAnthus Holdings are almost entirely white—a demographic reflection of the legal cannabis industry as a whole so far.

Green Thumb would not say how many of its more than 3,200 employees across the country are Black, but touted its commitment to "diversity, equity and inclusion" and said some 30% of employees are "ethnically diverse." The company has taken steps toward corporate responsibility. In July, it pledged $1.3 million in proceeds from its Good Green product line to fund grants for nonprofits that are addressing the harms of the war on drugs through job training and other programs. The company is also participating in 90 to Zero, an initiative that guides companies on how to help close the country's racial wealth gap.

More Green To Give?

Still, some legalization advocates say Green Thumb should promise more in exchange for the generous public support it’s getting from Orange County, or it should be deprioritized for that support altogether in favor of less advantaged players in the cannabis industry. Indeed, local officials have gone a long way toward making Green Thumb feel welcome. The Orange County Industrial Development Agency, which seeks to bring companies to the area, awarded Green Thumb a package of tax breaks to settle in Warwick—worth about $27 million over 15 years. The company also received help sidestepping regulatory hurdles that threatened to delay the move.

Green Thumb entered the New York market by purchasing a medical license from another firm for $60 million in 2019, and the state initially denied its request to relocate its manufacturing headquarters to Warwick from the original location in Schenectady. The Cuomo administration wanted to bar medical marijuana companies from making such moves until the state launched the adult-use market.

But even after legalizing recreational weed, Cuomo didn’t set up the regulatory body for the industry, the Cannabis Control Board. Gov. Kathy Hochul appointed its leaders during her first two weeks on the job, and the board held its first meeting on Tuesday.

Senator Martucci said he intervened to help Green Thumb relocate prior to the board’s establishment, so it could get construction on the new processing facility underway.

“I knew that it was important to work with our [state] Department of Health and the governor's office and the company to make sure that we changed the timeline,” Martucci said at the groundbreaking. “And we did.”

A lot of factors went into choosing a location for Green Thumb’s New York state headquarters, but “chief among them for us is support from the community, going somewhere where we're welcome,” Kovler told WNYC/Gothamist.

Some architects of New York’s Marijuana Regulation and Taxation Act, which was designed with inclusivity in mind, have questioned the wisdom of providing such generous assistance to a company with already vast financial resources.

“These folks have enough money to fund whatever they like to do,” Assembly Majority Leader Crystal Peoples-Stokes, a prime sponsor of the marijuana legislation, told VICE in April.

New York’s law legalizing marijuana for adult use specifies that half of all licenses must go to social equity applicants, including those from communities impacted by the war on drugs and includes provisions to create opportunities for smaller companies. Green Thumb won’t be able to start selling marijuana for recreational use until new business applicants can get licensed, and it’s still unclear how long that will take. In the meantime, the company can get a head start on the 18-month or so process of building out its facility and producing cannabis goods to sell.

Kovler argued that smaller entrepreneurs who want to open cannabis dispensaries or lounges will benefit from well-funded advance entrants like Green Thumb because they won’t have to wait as long for marijuana products to be available to put on their shelves.

And Warwick Town Supervisor Sweeton has defended the tax breaks as a sound investment.

“This is for the town of Warwick for generations to come,” Sweeton told the audience gathered at the construction site. “We may now be able to have a state-of-the-art facility where young people in our community...can stay in Orange County, get good jobs and work here and live and enjoy the quality of life that we've enjoyed growing up in this county.”