by GEOFF FOX
When the Town of Hancock and medical cannabis grower and producer Harvest, Inc. entered into an agreement for the company to use the Stanley E. Fulton Complex to grow their crops in 2015, the company promised the town would benefit financially from the arrangement.
Now, five years later, questions about the equity from the town’s 5% non-voting stake in the company have arisen by both a former mayor and also the current mayor.
When former mayor Dan Murphy left office, he said there were to be “serious dollars” coming from Harvest once they became successful and to his understanding, they have been successful.
Murphy was unsure if the company had gone public and was curious as to what type of money the town was seeing from that venture.
Mayor Ralph Salvagno agreed with Murphy, saying town officials have anticipated there would be some money coming from Harvest in the future.
The deal had several purposes — using an empty building, bringing jobs to town, and offering the town a 5% equity share in ownership of Harvest of Maryland, DCP.
The equity ownership includes all the Harvest operations within the state of Maryland.
Salvagno said when Harvest went public as a company on the stock exchange, there was discussion about converting the town’s stake in the company to shares of the company.
This posed two problems, the mayor said.
The first was offered the stock at close to zero. Since the town was not obligated to participate, Salvagno said the town opted not to do so at the time.
The second, he said, was with the conversion to stock.
If the council exists and has stock in a publicly traded company, then the town puts themselves in a position to buy or sell stock when, as a body, that’s not something they do.
Over a month ago, Salvagno said he asked for, and was promised, the financial records for Harvest of Maryland, DCP.
“I have every week asked for that information,” Salvagno said, adding he had asked two days prior to the meeting.
The mayor said it’s gotten to the point where the town could seek legal council if he didn’t get those records.
The money rightfully belongs to the town, the mayor said.
The amount could be a windfall and something that could be really good for the citizens of the town. The town needs to find a way to monetize the process, the mayor said.
He also added the town has a moral obligation to pay back money to the state the town used to purchase the building where Harvest operates.
There have been discussions about selling the building directly to Harvest. Salvagno said the best way to pay back the money is from the sale of the building.
Salvagno said the town has tried to find investors who are willing to buy the building but Harvest has first refusal on the real estate.
As long as Harvest uses that refusal, the town can’t sell the building from underneath Harvest.
“It is getting to the point where it’s just getting very frustrating,” Salvagno said. “If we have to take the next step, we will.”
Harvest continues to pay rent to the town for use of town-owned buildings and land.