WARWICK — Marijuana maker Citiva Medical is seeking tax relief for the Orange County production facility it began building in 2018 and now plans to complete after a long lull in construction.
The company this month petitioned the Orange County Industrial Development Agency to waive sales tax on remaining building materials and reduce future property taxes it would otherwise pay. The agency has not yet calculated the potential tax savings for Citiva or acted on the request.
The demand comes as cannabis companies race to prepare for a huge new market with New York’s legalization of recreational marijuana use for adults last year. Although the state has yet to begin issuing commercial licenses for adult use, four of New York’s 10 companies licensed to manufacture and sell medical pot are currently building or seeking approval for new production space. in Orange and Ulster counties.
One is Citiva Medical, which sells medical marijuana at three dispensaries, including one in Wappingers Falls in Dutchess County, but still does not have a manufacturing site.
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The 128,000 square foot facility she started in 2018 is located in a Warwick business park formed on the sprawling grounds of a state prison that closed in 2011. According to her application for tax benefits, the company has so far constructed the outer shell of a 30,000 square foot building for processing cannabis products and laid the foundation for an adjoining greenhouse where marijuana will be grown.
The completed facility will employ about 100 workers, 81 of whom will earn between $33,000 and $65,000 for production work and another 19 with salaries of $65,000 to $120,000 for management and sales positions, Citiva predicted in his request.
The company is asking the Orange County IDA for tax relief for the remaining construction, not for the materials it has already purchased or what it has built. This means that property taxes would only be reduced for the value of work done on the envelope and foundation of the existing building today.
The company has so far spent more than $11.5 million on construction and expects to spend just under $40 million to complete the project, Citiva consultant Colleen Hughes told the board. from IDA last week when the company’s claim for benefits was filed.
She and a Citiva official argued that the tax breaks would help the company complete its comprehensive construction plans and compete with other cannabis companies, some of which received similar tax incentives. Citiva’s application says it initially plans to build 38,000 square feet of greenhouse, then build the remaining 60,000 square feet if “external factors” permit.
“Not receiving financial assistance would likely reduce project size, facility output, total employment, and our ability to lead and support meaningful community programs,” the company wrote.
The factory is being built on 8.6 acres that Citiva’s parent company, iAnthus Capital Holdings, bought for $526,000 in 2018 from the Warwick Valley Local Development Corporation, an entity set up to sell pieces of the former Mid Orange Correctional Facility.
Opposite the Citiva site is another marijuana business that is under construction after receiving tax incentives last year. The county’s IDA awarded this company, Green Thumb Industries, an estimated total savings of $28 million in sales and property taxes for a production site that could total 450,000 square feet.
Warwick supervisor Michael Sweeton told the Times Herald-Record on Monday that he supports a tax abatement for the Citiva project as long as it only applies to future construction. The abatement would reduce property taxes paid for 10 or 15 years to the city, county and school district of Warwick Valley.
The IDA board will hold a public hearing in Warwick on the proposed tax benefits, but has not yet chosen a venue or scheduled a location.
Citiva sells medical marijuana products in three dispensaries named “Be”. in Wappingers Falls, Brooklyn and Staten Island, and plans to open a fourth store in Ithaca. Products include whole marijuana flowers, gummy-like edibles, and vape cartridges.
Because it does not have a production site, Citiva purchases these products from one or more other New York licensed marijuana companies. Jeremy Unruh, senior vice president of public and regulatory affairs at PharmaCann, confirmed that Citiva is one of the wholesale customers purchasing products from the company’s facilities in Orange County.
iAnthus, a publicly traded company based in New York and Toronto that bought Citiva in 2018, operates 35 cannabis dispensaries and at least 10 production sites in nine states, including New York, according to its website and 2021 annual report. filed with the Securities and Exchange Commission.
This article originally appeared on Times Herald-Record: Pot maker Citiva Medical seeks tax breaks to complete construction of Warwick