City signs agreement with marijuana grower

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The city has signed an agreement for a company to grow marijuana in a building on Sam Fonzo Drive.

Baked Beans Farm, a new company formed by a husband-and-wife team, plans to grow about 2,000 pounds of marijuana per year at the site, according to David Essig, the company’s founder and CEO.

“I’m really excited to be in Beverly,” he said.

Under the 2016 state law that legalized recreational marijuana, Beverly is required to allow at least four marijuana businesses to operate in the city. It has signed agreements for two marijuana retail shops, to be located at 13 Enon St. and 350 Rantoul St., although neither has opened yet.

 

The business on Sam Fonzo Drive is only for growing marijuana and manufacturing products like edibles and drinks. It is not a retail store. In fact, Essig said the public will not be allowed on site due to strict security rules surrounding pot growing. It can only sell to marijuana dispensaries, not to the general public.

The business will be located in a manufacturing building at 150 Sam Fonzo Drive, near Beverly Airport. The growing space for the marijuana will be about 10,000 square feet, Essig said.

The host community agreement between the city and Baked Beans Farm requires the company to pay the city 3% of its gross revenue for five years as an “impact fee,” to offset administrative, compliance and other costs to the city of hosting a marijuana business. The 3% is the same amount the city agreed to with the two retail marijuana businesses.

According to the proposal the company filed with the city, Baked Beans Farm will spend $6 million to get the operation up and running. It will make $4.2 million in revenue in its second year of business and $15.3 million in years three, four and five, according to the proposal. Three percent of $15.2 million is $456,000.

Essig said Baked Beans Farm will use “100%” green energy, which he said the city emphasized as part of the negotiations. There will be more than 100 security cameras on site, with live video feeds to the Massachusetts Cannabis Control Commission.

Essig, 39, and his wife, Jennifer, are certified public accountants who live in South Boston and have two young children. He said he began growing marijuana in his home when it became legal five years ago.

“I got really good at it and saw an incredible opportunity coming in the market,” he said. “My wife said, ‘I have a good job, go off and do this.’ We wrote a business plan and two years later we got an HCA (host community agreement).”

Essig said he was familiar with Beverly because his sister attended Endicott College. He said the building on Sam Fonzo Drive, which he is leasing, is perfect for a marijuana growing business, and is in a good location because it’s not near any houses.

“Our biggest neighbor is the airport,” he said.

Essig said the company’s expected volume of about 2,000 pounds a year of marijuana makes it “very small” among marijuana cultivators. Some facilities are 10 times bigger, he said.

“We’re one step above a micro-business,” he said. Baked Beans Farms includes two other partners, Andrew Hawes, of Charlestown, and Robert Dolins, of Groton.

Essig said Massachusetts has strict testing requirements for the marijuana that the company will produce to ensure its safety. The rooms must be tightly sealed and maintained at the right temperature and humidity.

“We’re focused on really high-quality strains,” he said. “You’re trying to create the perfect environment for the plant to grow.”

Baked Beans Farms still needs approval from the state’s Cannabis Control Commission. Essig said it could be a year before the business opens. He’s planning to start off with about 20 employees.

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