NY: Cresco wants $38M in tax breaks for new Wawarsing facility

The Daily Freeman reports

KINGSTON, N.Y. – Industrial pot grower Cresco Labs will ask for $37.99 million in tax breaks from the Industrial Development Agency on Wednesday, April 20.

The symbolism of the date was not lost on Agency Chief Financial Officer Rose Woodworth.  “They are coming to the IDA on 4/20,” she said. “This has been in the works for a year, what are the odds?”

The popular cultural association of “420” with marijuana has been widely used since the 1970s. The term is a reference for the time of day that four California high school students would meet in their search to find an abandoned marijuana field using a “treasure” map.

For Cresco U.S. Corp., the search for tax reductions comes after securing 90 acres in Wawarsing on a site that since 1958 has seen Channel Master, Imperial Schrade, and Hydro Aluminum open and close.

The session is scheduled for 9 a.m. Wednesday as a video conference at bit.ly/3L1DVfG.

Tax breaks being sought by Cresco are set to include a 15-year payment-in-lieu-of-taxes agreement that would reduce property taxes from a total of $124.09 million to $96.11 million and sales tax exemptions amounting to $10 million for purchases needed when constructing the $209 million facility.

The application promises there will be 375 full-time equivalent employees by the third year of operations with 21% of the workforce expected to be paid hourly rates of $25.71 or more, 32% to be paid between $19.29-$25.70, and 47% to be paid $12.86-$19.28. The application says that construction is anticipated to take about 21 months and that there would be an additional 100 construction jobs created as a result.

“This is one of the biggest economic opportunities we have had in Ellenville in decades and the project has continued to gain momentum throughout the process,” Ulster County Executive Pat Ryan’s office said in an announcement about the project’s expansion on Sunday.

Cresco officials expect that earnings will be $76 million in 2024, $116 million in 2025, and $156 million in 2026.

Under the application, Cresco U.S. Corp is using the holding company Gloucester Street Capital, LLC, as its financial subsidiary and JDRC Ellenville as its real estate subsidiary. Those three entities all have an address of 400 W. Erie St., Chicago, IL, but would then lease the property to Valley Agriceuticals, LLC.

In the application, Cresco describes Valley Agriceuticals as its growing subsidiary that “operates four medical cannabis dispensaries across the state of New York in addition to a manufacturing facility.”

Overall, Cresco operates 21 cultivation and production facilities with 51 retail licenses in Arizona, California, Illinois, Florida, Maryland, Massachusetts, Michigan, New York, Ohio, and Pennsylvania. The company notes its New York retail sites are in Bardonia, Brooklyn, New Hartford, and Huntington Station, with a manufacturing facility in Walkill.

Marijuana firm to seek $38M in tax breaks for Wawarsing facility

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