For having just expanded his dispensary business to sell cannabis product for adult use in December 2020, Casey Kornoelje brings a lot of plant-touching experience to the industry. He’s wielding that knowledge as he and his team work to vertically integrate Pharmhouse Wellness, the first adult-use dispensary in Grand Rapids, Mich., that is owned by a resident of the city.
Kornoelje opened Pharmhouse Wellness as a medical provisioning center in March 2020. But prior to that, he had spent 10 years running a 30-acre cut flower farm north of Grand Rapids, where he also grew cannabis in pole barns.
“In 2008, the state of Michigan rolled out the Michigan Medical Marijuana Program,” Kornoelje told Cannabis Business Times and Cannabis Dispensary. “I immediately enrolled as a caregiver and patient, so I was a patient myself, plus a caregiver of five. That allowed me to grow 72 plants total—72 all in—and I rocked that out from 2008 to this day.” (While the state has ended caregiver sourcing to dispensaries, Kornoelje notes that he is still legally growing for himself.)
Going further back in time, Kornoelje was charged with felony cannabis manufacturing in 2001 and a misdemeanor cannabis possession in 2004.
“As soon as I could discover how to grow the shit, I started growing it,” Kornoelje reflects. “I just wasn't quite as good at concealing it as I was at growing it. That led to a big disruption in my life. The felony charge has always been on my record and stuck with me. It’s stifled many different opportunities for me throughout the years, both career-, professional-wise and trying to go into the military services.”
But things came around, as Kornoelje moved to the “cottage industry” of caregiver cultivation, then medical dispensing. His prior convictions, caregiver experience and residency in Grand Rapids scored Pharmhouse Wellness points through the state and city's social equity programs and allowed him to receive zoning priority and fee reductions for its adult-use operations.
“We’re going to reinvest that money back into the local neighborhood,” Kornoelje said. “That could include projects like home ownership training, expungement clinics, business and home façade block grants, public safety and transit enhancements in front of the dispensary. Those are all just things that are on the peripheral, but that's definitely not the end of it. [Those are] just some things that are hot on our agenda.”
Pharmhouse Wellness opened as a medical-only dispensary in March 2020—in a standalone 750-square-foot structure that was originally constructed in 1890 as a home, later zoned for light industrial, and which architects and engineers helped Kornoelje facelift.
Within several days, Michigan government officials recognized the COVID-19 threat and prioritized social distancing over confined in-store customer experiences. Pharmhouse Wellness has only offered curbside and delivery for nearly the past 10 months.
A lack of historical data on Michigan cannabis sales made COVID’s impact difficult to examine, Kornoelje said, adding, “My take of it is that people are home more. … You can't go into the mall as much, you can't go to the movie theaters, to the gyms. People are home more, and I do believe that that has driven some increased consumption on cannabis.
“But we have noticed a definite slowdown in the fall, as the federal stimulus that was passed back in the summertime—the effects of that eventually ran out. So, we have seen demand be stable, but stable to declining in the fall time.”
Setting Sights on Vertical Integration
Pharmhouse Wellness is in the process of expanding, both through increasing its customer base and vertically integrating.
In 2020, Grand Rapids began accepting and approving medical storefronts to expand into adult use. “The city, after [expressing] concern seeing very little local participation in the marijuana market, rolled out their social equity program in summer 2020 to increase participation by local and disproportionately affected individuals,” Kornoelje said.
Recreational sales began in Grand Rapids in October. Pharmhouse held a celebration for its first adult-use sales on Dec. 19, where it hosted a coffee truck, “did swag bag giveaways” and offered specials, Kornoelje said. In addition, Redemption Cannabis owner and former cannabis prisoner Ryan Basore and Grand Rapids city commissioners attended.
The company received a processor license and a Class 3 cultivation license (for 2,000 plants or fewer) in the summer and fall of 2020. It will cultivate and process cannabis in a 4,000-square-foot warehouse on a property located two parcels east of the dispensary. “We are trying to figure out how best to make all those licenses mesh in the relatively confined space,” Kornoelje said. “But the goal is to get the grow going first, and then once we have marijuana to process, then we’ll roll out the processor license last.”
At Pharmhouse, 23 employees are responsible for getting a variety of products into customers’ hands, from flower to concentrates to edibles, topicals and vape cartridges.
Mentioning his caregiver background and experience growing cannabis, Kornoelje said, “We love flower. We try to pride ourselves on having high-quality flower in the store. And knowing that people love flower, too, we've tried to link up with the best possible cultivators and people that we align ourselves with—not only from a quality standpoint but from a business-philosophy standpoint and a corporate culture standpoint.”
As it plans to reinvest into the local community, Pharmhouse has engaged in other philanthropic efforts. In October 2020, the dispensary donated a portion of proceeds from Fresh Coast Extracts product to Migrant Legal Aid. And in December 2020, Pharmhouse donated proceeds from Fresh Coast to the West Michigan Cannabis Guild.
Regarding demand for the team’s beloved flower, Kornoelje said, “People seem to want the highest-testing stuff, man, unfortunately, and that seems to be the recurring theme. Unfortunately, the terpenes and the flavonoids seem to fall to the back seat with most of our consumers. I would say some are heady enough to understand that THC is not the whole picture.” Some customer favorites include classics such as Wedding Cake, GMO, GG, Super Lemon Haze and various kush varieties.
In speaking with CBT and CD, Kornoelje offered one dose of civic pride and one of thankfulness to those with whom he’s worked. “Like they say, ‘it takes a village,’ and it truly does,” he said. “There was a huge team of people, from [Pharmhouse’s communications contact] to my planner, who helped me with working on the land-use process, to the architect and the engineers—all the people that I had to work with to make the applications a reality—and then of course the city of Grand Rapids—the city commissioners, the planning commissioners, the mayor—all of them have been super supportive of what is the only locally owned cannabis shop in town."