Issuu

VOL. 39, NO. 13

MARCH 26 - APRIL 1, 2018

Source Lunch

Akron Crystal Clinic’s specialty hospital is latest step in ‘steady’ growth. Page 24

CLEVELAND BUSINESS

Robert E. Comben Jr., Vocational Guidance Services CEO Page 27

Cleveland Downtown zoning could be ‘cleaned up.’ Page 4 EDUCATION

BUSINESS OF MARIJUANA

Shootings bring ideas for safety products

By JEREMY NOBILE

By RACHEL ABBEY McCAFFERTY

jnobile@crain.com @JeremyNobile

rmccafferty@crain.com @ramccafferty

With barely five months left before the scheduled start of Ohio’s medical marijuana program, the odds of having a fully functioning industry by then seem hazy at best. The underlying implication there is that patients may not have proper access to medical marijuana when they’re expected to in September. In turn, that could stymie growth of a highly anticipated cannabis industry here — one expected to generate hundreds of millions of dollars in sales per year that is already sprouting ancillary, marijuana-related businesses. “I think the (Ohio Department of Commerce), based on my experience with them, gets this stuff done,” said Mel Kurtz, CEO of Grow Ohio Pharmaceuticals, a provisionally licensed Level I cultivator in Newton Township. “But it isn’t going to be painless.” Kurtz, who also is president of Quasar Energy Group, which will provide power for the grow site, said his $15 million-to-$20 million facility is under construction. He said the market may not see finished product available for purchase until late-2018. Grow Ohio probably won’t have product ready until the first quarter of 2019, he said. And Kurtz doesn’t expect to turn a profit for at least two years.

Bill Barna doesn’t want people to need his product. The Bolo Stick — a steel pin that can be slid through a metal anchor on a door and into a hole in the floor below — can help to secure doors in an emergency. “I’m selling a product I hope to God people never have to use,” Barna said. Barna is just one of many people working in the school safety space in Northeast Ohio. As the gun control debate roils on in the United States, sparked most recently by the school shooting in Parkland, Fla., entrepreneurs and businesses are offering safety products and services to schools and other institutions. Some products, like software designed to monitor social media for certain words, can hopefully serve as a preventative measure. Others, like temporary barricades for doors or pepper sprays, aim to minimize casualties in the case of an emergency. Barna, president of Bolo Stick LLC in Trumbull County, got the idea for his company at his day job as a police officer for Howland Township. He spoke with principals often about their lockdown procedures, but realized their attempts to secure classroom doors would be lacking. Windows can be broken and locks unlocked. He created the Bolo Stick as a way to better secure doors in emergency situations. Similarly, Bill Cushwa started Hudson-based National School Control Systems LLC after the 2012 school shooting in Chardon. He had been working in development at Seton Catholic School and volunteering with a school safety community group in the city, and the idea of what would happen if someone couldn’t get out of a building in an emergency was “gnawing” at him.

Ohio’s marijuana program slow to metamorphize

SEE MARIJUANA, PAGE 23

Inside Banking: Finding banking partners isn’t easy in the industry. Page 10 Higher ed: NEO cannabis school fills an industry need. Page 12 Docs: Program’s success hinges on physician buy-in. Page 15

Illustration for Crain’s by Andrea Ucini

Architecture << The

List: Northeast Ohio’s largest architectural firms Page 16 Analysis: Merger mania in the region has a big impact on the industry. Page 6

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CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

When big boxes close, smaller pieces can fit

Editorial

A little help Northeast Ohio has been making strides as a place for entrepreneurs to be successful, but there’s still plenty of room for improvement. On the institutional side, at least, there are some encouraging new developments, which we hope will go a long way toward creating a culture where inventive business minds are encouraged to take risks that pay off with successful, job-creating companies. Chris Heivly, an entrepreneur-in-residence at international startup accelerator Techstars, recently visited Cleveland to provide a report card on our startup environment. The verdict? It earned a 3 on a 7-point scale created by Techstars to measure categories that included “culture,” “density,” “talent,” “capital” and “institutional support.” The latter two categories were the strongest. Although everyone wants more money, there’s “more than enough” for the region’s startups, Heivly said. And institutions as varied as Case Western Reserve University, JumpStart Inc. and law firm Jones Day (with its TechniCLE Speaking event series) are providing valuable support, he noted. To that support structure you can add a new outpost of LaunchHouse, which is expanding its entrepreneurial co-working community concept to a new location in Lakewood, and Akron’s Bounce Innovation Hub, which is led by new CEO Douglas Weintraub, a respected venture capitalist in the region. In a Crain’s profile of Bounce, one observer called Weintraub a “heavy hitter” and noted, “we need a heavy hitter to steer this thing into the next phase for Akron.” A post on the startup-focused Nibletz blog called attention to two efforts by the Flashstarts accelerator: the Nomad program offering open office hours throughout Northeast Ohio for entrepreneurs to come for advice or to pitch their ideas, and the NODE Calendar (Northeast Ohio Distributed Entrepreneur) to provide a listing of key events that are readily accessible to everyone. Heivly in his presentation gave the lowest score to our startup culture, saying, “Something — trust, awareness — is missing here.” There are no quick fixes for that, but these new initiatives are a good start.

Three wins

Washington, D.C., is chaotic these days, so it’s a relief to note that members of Ohio’s congressional delegation are chalking up some significant victories on substantive issues. The budget Congress was expected to pass late last week included a full $300 million in funding for the Great Lakes Restoration Initiative, an effective program that President Donald Trump at various points targeted for major cuts or outright elimination. Members of the House and Senate (from both parties) who represent Great Lakes states fought hard to protect the program, which for a modest amount of money protects and revitalizes the world’s largest system of fresh surface water. The spending bill also included language to prohibit the U.S. Army Corps of Engineers from dumping toxic material dredged from the Cuyahoga River shipping channel into Lake Erie without the approval of the state of Ohio. An announcement from U.S. Sens. Sherrod Brown, D-Cleveland, and Rob Portman, R-Cincinnati, noted the bill “includes language requiring the Corps to make every effort” to release by February 2019 what’s known as the “Chief’s Report for Brandon Road Study.” The senators have been pushing for this for quite some time; they say it’s “crucial to ensuring that Asian Carp do not enter the Great Lakes and threaten the Great Lakes’ $7 billion fishing industry.” Also important was last week’s passage in the Senate, by a 97-to-2 vote, of legislation co-authored by Portman, with Brown as a co-sponsor, that strengthens the policing of sex trafficking. Passage came “over the opposition of many internet companies,” The New York Times said. The bill, which has passed the House and is expected to be signed into law by the president, would “allow state law enforcement officials to go after websites like Backpage.com that facilitate sex trafficking” and would “suspend protections that shielded internet companies from legal liability for the content on their sites.” In a political world that’s often baffling, these accomplishments are eminently sensible. And welcome.

Publisher and Editor: Elizabeth McIntyre (emcintyre@crain.com)

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What happens when a big box empties? Hundreds of communities will soon be faced with that dilemma when Toys R Us shutters its 735 stores in the United States. More than 30,000 jobs will be lost. And thousands of square feet of retail space will be left vacant. The toy retailer isn’t alone. So far in 2018, more than 2,000 store closings have already been announced. Shuttered Foot Lockers and Best Buys abound. No one knows better the challenges of big-box retailers leaving town than Michael Mallis, city manager of Bedford. Venture a short distance from the bustling Bedford Auto Mile along Broadway Avenue and Rockside Road in the southeastern Cuyahoga County suburb, and you’ll find Meadowbrook Market Square, Elizabeth which looms as a retail ghost town. McIntyre Spreading over 60-plus acres, Meadowbrook’s big-box stores and small retail shops stand mostly vacant — you can literally count the remaining retailers on two hands. They, and an International House of Pancakes, are outliers clinging to a lifeboat as an ever-growing wave of retail closings threatens communities nationwide. Meadowbrook, which was built in the early 1990s, was once a thriving suburban shopping plaza, but then Tops grocery store closed in 2006, followed by Target in 2010, which impacted the smaller shops. “When you start losing the box stores, it’s hard for the smaller retailers,” Mallis said. “They need the traffic the box stores bring.” Finally, the Walmart Supercenter shuttered in 2016, only eight years after opening. “Retail is different today than it was 10, 15, 20 years ago,” the city manager said. More of us are shopping online. Delivery times are speeding up. And consumers want different shopping experiences and products, and are willing to drive greater distances for them. That wave isn’t going to slow down. And so we’re left with this question: What becomes of communities like Bedford when hulking developments devoted to retail go dark? Not everyone can win the lottery now as an Amazon fulfillment center, as North Randall and Euclid did. Mallis feels optimistic about Meadowbrook despite its current sad state. Real estate developers Chris Semarjian and Stuart Lichter recently bought the former Walmart Supercenter. Mazda of Bedford will soon break ground for a new auto dealership at Meadowbrook. A DaVita dialysis center and a small fitness center are also committed to the shopping plaza. “It’s like a swimming pool,” Mallis said. “No one wants to be the first to jump in until someone does and they find the pool is not really that cold. It’s actually warm.” Mallis has two pieces of advice for those communities facing store closures: When it comes to redeveloping big boxes, have an open mind and look at the sites as a clean slate. “Don’t pin yourself in a corner,” Mallis said. “Don’t think you have to fill it with big-box retail.” These sites are suitable for mixed-use development and adaptive reuse for housing, storage, light industrial and commercial uses, he said. “I’ve seen some success stories with big boxes where you put windows in these buildings and create an office complex,” he said. As retailing evolves, and needs for valuable spaces transitions, civic leaders, developers, lenders and residents who care about the health of their communities must come together and think outside the box.

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Cleveland Business, 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113, or by emailing ClevEdit@crain.com. Please include your complete name and city from which you are writing, and a telephone number for fact-checking purposes. Sound off: Send a Personal View for the opinion page to emcintyre@crain.com. Please include a telephone number for verification purposes.

CRAIN’S CLEVELAND BUSINESS

Personal View

There’s a better solution than Medicaid work requirements By LORI D’ANGELO

Many people with mental illness are successfully employed. In fact, throughout history there are examples of individuals with mental illness who have had extraordinary careers, despite their suffering. Winston Churchill, Isaac Newton, Jane Pauley, Brian Wilson, Patty Duke, Scott Joplin, to name a few. The list is long. Unfortunately, the employment statistics for people with mental illness are discouraging: Only one in five is employed, and the number is lower yet for those with the schizophrenia diagnosis. Stigma and discrimination are often barriers to getting a job. There is currently a movement afoot through the Centers for Medicare & Medicaid Services to include work requirements for non-disabled Medicaid enrollees. While states may exempt some vulnerable people from such work requirements, many people with mental illness will fall through the cracks. Plus, studies already show that such requirements do not lead to long-term, stable employment — but they do result in substantial costs and red tape to enforce them. It is important to understand that most people who live with mental illness want to work and could work with the proper support. To address this critical problem, University Circle’s Magnolia Clubhouse helps men and women with mental illness find jobs (and keep them) through an employment program that is research-proven to be effective. By working closely with our members, we provide each with the support that he or she may need to succeed, from learning interviewing skills to on-the-job troubleshooting, depending on the individual. One of more than 300 clubhouses worldwide, Magnolia Clubhouse is based on a comprehensive model of psychiatric rehabilitation that deems both work and relationships key to improved mental health. Here, our members are engaged in meaningful work —

Why cut off Medicaid for people who live with mental illness? It will not help them get or keep a job. It certainly will not improve their mental health.

together with staff, they operate the clubhouse. When members regain their confidence and sense of well-being, we help those desiring employment to enter (or re-enter) the workforce. If the resources used for the enforcement of a mandate could be redirected to create employment programs proven to be effective, so many more adults who live with mental illness could join the workforce. Studies show that people with mental illness who find competitive jobs have a better quality of life, fewer symptoms, and lower mental health care costs. In sum, the value of supported employment programs, like those offered by clubhouses around the world, is enormous. Why cut off Medicaid for people who live with mental illness? It will not help them get or keep a job. It certainly will not improve their mental health. This vulnerable (and underserved) population deserves to be given opportunities, not penalized. There is a better option for society and for our community — investing in employment programs that work to help men and women attain independence and achieve their full potential. At Magnolia Clubhouse, we are privileged to see so many of our members succeed in their jobs and thrive every day. D’Angelo is executive director of Magnolia Clubhouse in University Circle.

Letter to the Editor

Hopkins should be a priority for city As a very frequent traveler from Cleveland Hopkins International Airport, I want to add to the observations of a letter to the editor from Jim Rundo in the March 5-11 edition (“Cleveland Hopkins is in desperate need of an overhaul”). I think Robert Kennedy is a huge upgrade from the previous director at Hopkins, but Chicago O’Hare just announced a multibillion-dollar expansion and upgrade while we spend very little. There is no overhang for passengers arriving and

departing. We have reduced parking capacity by replacing long-term parking with surface lots. When you can find an undercover space, the space is designed for Mini Coopers only. Airports are growth engines for cities, but the Cleveland mayor and city council give it no priority. Why can other cities raise or be granted huge sums for improvements when we get an odd lot? Joseph H. Thomas Pepper Pike

Web Talk Re: Plug and Play taps first Cleveland cohort Global Center 2.0 will build on the initial energy and momentum inspired by various initiatives, organizations, individuals and programs over the past few years and will continue to inspire and drive health care innovation in NE Ohio. — John Paganini

Re: Tough love for startup scene Chris Heivly of Techstars, which runs business accelerators worldwide, recently came to Cleveland, and the first point in his talk, about culture, sums it up. It’s very difficult here for new ideas. Most Clevelanders choose old stability over new upside. Also, there’s a real “stranger danger” culture. You can’t approach people without them wondering what you want from them. And finally, there’s a diminished idea of what’s possible. My solution? Throw everything at a major company to attract them. Otherwise, we have to wait for our Dell or HP to start here. — Steve Riley

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CRAIN’S CLEVELAND BUSINESS

Focus

BUSINESS OF MARIJUANA

Banks hedging at working in marijuana space

The feds’ reluctance to legalize has many financial institutions on edge By JEREMY NOBILE jnobile@crain.com @JeremyNobile

unkSac CEO Garett Fortune has been kicked out of multiple banks due to how his packaging products serve the world’s legitimate marijuana industry and the drug's federal prohibition in the United States. ¶ He’s getting banked today thanks to finding a financial institution who has agreed to work with him in Colorado. But ahead of that, he reworked his business plan. ¶ FunkSac — which was founded on Cleveland’s West Side and manufactures its odor-proof, child-resistant bags and packaging products here, but has co-headquarters in Denver — now has both a wholesaler and distributer between them and any firms that actually touch the cannabis plant. That extra distance insulates them to a level that makes them more likely to be banked, even though their products exclusively target the marijuana sector (which is being required to use child-resistant packaging). SEE BANKING, PAGE 13

Illustration for Crain’s by Andrea Ucini

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CRAIN’S CLEVELAND BUSINESS

BUSINESS OF MARIJUANA

Cannabis school startup has local roots By JEREMY NOBILE

Projected revenue of Ohio’s medical marijuana market

jnobile@crain.com @JeremyNobile

According to the Frontier Financial Group, Ohio’s medical marijuana revenue will grow 55% between the first full year of operation, 2019, to 2025. Note: 2018 revenue is based on September through December.

Almost immediately after the Cleveland School of Cannabis began its first introductory classes on marijuana in January 2017, the facility’s small staff was overwhelmed with interest from prospective students. “It was crazy. We just weren’t ready for the demand,” said founder Austin Briggs. “The phone was ringing off the hook. We had to turn it off.” But it was a good problem to have. “At that time, that’s when I realized we were really on to something.” Briggs’ for-profit school — which was originally dubbed the Cleveland Cannabis College, but the "college" needed dropped before getting state approval — marked its official launch in Independence with those first classes last year. It’s a unique fit for the nascent marijuana industry not just in Ohio — which is preparing for a medical marijuana program to take effect Sept. 8 — but across the country. In December, after just less than a year in business, the school received state approval from the Ohio State Board of Career Colleges and Schools. That appears to make it the only state-approved cannabis career school east of Colorado and one of just a few of its kind in the country. Briggs saw a need for education in the budding cannabis industry firsthand after working with a friend’s cultivation operation in California, which eventually put him on the path to creating the Cleveland school. But he was unsure of how the market would really react — or whether the operation would even be welcomed in Ohio where Briggs said he faced a lot of pushback on the local level. “It was a big if to our company,” Briggs said. “We knew we could sell these intro classes. But no one has had a certificate program before, at least not like this.” Students are already flocking from across the country for the classes, Briggs said. Several fly to Cleveland from out west, where the school is coordinating internships at cultivation sites in Oregon. One student has driven up from North Carolina. After a busy first year, the school is now poised for explosive growth as it fills an unmet need in the marijuana sector for skilled workers. Briggs didn’t always have such a promising business in the cannabis sector in front of him. He wasn’t even thinking of getting in the industry in some form a few years ago, let alone running a school supporting it. Indeed, Briggs’s history with marijuana had actually caused some troubles for him in the past.

2018

$21 million* $96 million

2019

$161 million

2020 2021

— Jeff LaFollette, founder of the Ohio Regional Cannabis Chamber of Commerce

$290 million

2022

$505 million

space in a buddy’s studio, where he continued some of his work with photos and videos and matriculated into sound engineering. But he was unfulfilled and quickly tired of the “egos in entertainment.” Briggs learned of a friend’s cultivation operation and invested around $15,000 of his savings into it. (That facility no longer exists, but the business owner now runs a California marijuana processing plant.) “After getting kicked out of my house for using cannabis, I though the illegality of using cannabis created social issues that I could feel good about changing,” Briggs said. But he realized he knew nothing about the business. So he sought education. There was only one or two schools in the country doing that, but Briggs felt the programs weren’t very rigorous. Meanwhile, while helping with the grow site, Briggs saw a lot of turnover in staff and wondered why there wasn’t a school offering some certified programs. “I realized there was a great need on the business side and everything was pointing toward education being a huge opportunity in the sector,” he said. “I’m thinking, I’m going to be the leader in cannabis education. This was a huge opportunity I couldn’t pass on.”

$776 million

2023

$1.1 billion

2024

$1.3 billion

2025 $300M

$600M

$900M

$1.2B

$1.5B

How Ohio’s marijuana industry is organized The Ohio Medical Marijuana Control Program, established by HB 523, will take effect Sept. 8, 2018. Initially, the state is licensing a maximum of 24 cultivators — 12 Level I (between 25,000 – 75,000 square feet of canopy, or plant spread) and 12 Level II (up to 3,000 – 6,000 square feet of canopy) — 40 processors and 60 dispensaries. Ohio Department of Commerce: Oversees licensing of cultivators and processors

24 Cultivators

12 Level I Cultivators: 25,000 to 75,000 sq ft of canopy JJThere

12 Level II Cultivators: 3,000 to 6,000 sq ft of canopy

are currently five provisionally licensed Level II cultivators and six Level I cultivators in Northeast Ohio, meaning just under half of all growing will occur in one of 15 NEO counties.

State Board of Pharmacy: Oversees licensing of dispensaries

40 Processors JJProcessors

have not been awarded licenses yet. The state has received 104 applications for processing facilities so far, but sites have yet to be disclosed. The total number of applications includes multiple applications from single applicants vying for multiple sites, so there are more applications than applicants.

60 Dispensaries JJDispensaries

have not been awarded licenses yet. The state has received 376 applications for dispensary licenses. Of those, 54 have applied to operate in NEO. As is the case with processors, there are multiple applications from some individual applicants.

SEE JOBS, PAGE 14

Northeast Ohio dispensaries JJThe board of pharmacy has created four districts to manage how many

dispensaries will go where. Population density is one of the largest factors in determining where those sites are being allocated. Initially, 30% of all Ohio dispensaries will be based in Northeast Ohio’s six sub-districts — the highest density of dispensaries of the state’s four quadrants. Five of those dispensaries will be in Cuyahoga County/Cleveland, which ties it for Ashtabula Lake the most in any one county with Franklin County/Columbus. NE DISTRICT 1 3 dispensaries NE DISTRICT 2 5 dispensaries NE DISTRICT 3 3 dispensaries NE DISTRICT 4 3 dispensaries NE DISTRICT 5 2 dispensaries

From LA to Ohio Briggs, 31, a native of Cleveland Heights, was kicked out of his house at 17 by his mother for using marijuana. Looking back, he said he shouldn’t have been using the drug recreationally while in high school. But he also doesn’t agree with having been kicked out. (He said his relationship with his mother today is very good.) After graduating from Kent State University in 2010, where he studied entrepreneurship, Briggs bought and flipped his first house, using some of the money to move to Los Angeles. In California, Briggs moved into a spare

“We estimate 4,000 jobs to start in the industry, and that’s direct permit holders and some ancillary businesses as well.”

NE DISTRICT 6 2 dispensaries

Geauga

Cuyahoga

Trumbull

Lorain

Portage

Medina

Summit Mahoning

Wayne

Stark

Holmes

Columbiana

Carroll Tuscarawas

$200 million to $400 million JJAmount

Ohio should generate in annual retail sales via dispenseries once the market matures. Some groups’ early estimates project $154 million in sales in 2019 and $226 million in sales by 2021.

100,000 JJSize

of the patient pool several years after the first dispensaries open. This number could reach 200,000 when the industry is in full swing. Austin Briggs founded the cannabis school because he believes there was a lack of quality educational options in the field. (Contributed photo)

Sources: Marijuana Business Daily, New Frontier Data/Frontier Financial Group, National Cannabis Industry Association of Ohio

CRAIN’S CLEVELAND BUSINESS

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PA G E 13

BUSINESS OF MARIJUANA

BANKING

CONTINUED FROM PAGE 10

“Banking is still an issue. It’s just a matter of being more creative. Ancillary businesses have it a little bit easier, though,” Fortune said. “People touching the plant need to get a solution for their banking because it just hasn’t been favorable for them. I don’t see a solution so far in Ohio. And I haven’t seen (lawmakers) propose anything that looks like it’ll work.” Like businesses across the country, those in Ohio are grappling with how to access the banking system as state laws providing for a medical marijuana program here compete against federal prohibition and an administration indicating it could still go after the cannabis industry — even as public sentiments toward legal marijuana are as positive as ever. Beyond ancillary businesses like FunkSac, several of Ohio’s provisionally licensed cultivators new to the marijuana business have been challenged to find institutions that will work with them. And other companies coming online will continue to face the same challenges. Having a bank is required when applying for state licenses to grow, process and sell marijuana. But when banks — particularly the largest commercial banks with federal charters — learn a company they may already be servicing is in the marijuana industry, which can happen when a bank is digging through a firm’s paperwork, they’ll often shut down the related accounts. Most of the big banks in this market have done that, including KeyBank, Huntington Bank and PNC Bank. Some Ohio lawmakers are proposing a closed-loop payment system they feel could address the banking issues. But many stakeholders in the marijuana and banking sectors aren’t impressed and say that system could actually impede patient access and possibly even discourage banks themselves from serving the market. Until federal laws address the marijuana industry and recognize its legitimacy, these challenges will only persist. And that will continue to force businesspeople to access the banking system by surreptitious means and make risk-averse financial institutions constantly fearful of a governmental crackdown. “Banking has been and continues to be a big issue in the cannabis space here and throughout the country. And it’s a fix that needs to come from Congress,” said Thomas Haren, a Cleveland-based attorney with Frantz Ward working with several marijuana-related businesses. “Absent Congressional action, this is probably going to continue to be a problem.”

Banks (quietly) stepping up Mel Kurtz, CEO of Grow Ohio Pharmaceuticals, which is building a Level I cultivation facility in Newton Township, said he’s already had some accounts shut down. He declined to name any banks that did so. That alone has created some challenges for cultivators at this budding stage of development. Some businesses are struggling to keep checking accounts. Banks won’t lend to the industry, so all the aspiring cannabis entrepreneurs are being backed in cash. And investments in the business are being made in cash. Word is some banks and credit unions are coming online to serve these businesses, but they’re all doing so under the radar of the public

An employee counts cash at an apothecary in Denver. Because of federal prohibition, the industry largely deals in cash. (Bloomberg)

“Banking has been and continues to be a big issue in the cannabis space here and throughout the country. And it’s a fix that needs to come from Congress.” — Thomas Haren, a Cleveland-based attorney with Frantz Ward

eye. According to a recent report in Forbes, the number financial institutions actively banking the cannabis industry as of January had increased 18% from the prior year. Stakeholders say the board of one Ohio community bank voted this month to work with marijuana businesses, but they’ve wished to remain unidentified. Wright-Patt Credit Union in Beavercreek has provided an account to the Ohio Regional Cannabis Chamber of Commerce, said founder Jeff LaFollette. But the credit union did not respond to a request for comment. Concerns of a federal crackdown have only become more acute under Attorney General Jeff Sessions as the Department Of Justice in January rescinded the Obama-era Cole Memo — a move that effectively prevented federal resources from being used to go after states with some kind of marijuana program. However, guidance from the Financial Crimes Enforcement Network (FinCEN) clarifying the Bank Secrecy Act — the act requiring banks to track the flow of money, which also applies to identifying money otherwise collected through illegal means, like a federally prohibited marijuana industry — and describing how financial institutions could serve marijuana-related businesses despite the drug’s Schedule 1 status still exists. That guidance was built on the Cole Memo, though, which is gone. It’s a confounding topic in the marijuana industry, said Thomas Rosenberger, executive director of the National Cannabis Industry Association of Ohio, a trade group. Some banks and credit unions are, indeed, stepping up to serve the sector, he said, even though that requires more extensive (i.e. costly) oversight of those related accounts that might be hard for a small bank or credit union to justify despite the payoff of those customers’ deposits. And then there’s still the underlying concern of the federal government deciding to go after banks engaging the industry. “It’s a very touchy topic at this

point,” Rosenberger said. “Banks who do come online make folks sign non-disclosure agreements.”

Closed-loop likely not the answer Ohio lawmakers in February proposed two identical bills involving the banking issues. Those issues largely force marijuana-related companies to deal in cash because of their lack of access to the financial system, raising safety concerns. Those bills — HB 495 and SB 254, introduced by state Rep. Bill Seitz and state Sen. Lou Terhar, respectively — would require any medical marijuana-related businesses to use designated financial institutions for transactions. It would operate in a convoluted closed-loop system that would allow the tracking of money like the government wants. But the proposed system involves patients getting a debit card they would exclusively use to buy marijuana, which they’d load

with funds at a shop overseen by the state, like a liquor store. The motivation for the closed-loop system seems purely based in tracking the money, not in fixing actual banking problems, protecting banks serving the industry or encouraging patient access. “Whether you support or oppose Ohio’s Medical Marijuana legislation, we all should share a desire that the program be operated with tight controls to prevent tax evasion, money laundering and unsavory characters becoming involved in the distribution chain,” said Seitz during testimony in March, according to Columbus’ The Daily Reporter. “We all should desire a system that lets the state carefully monitor who is recommending medicinal marijuana, who is buying it, and how often. “After all, we learned these lessons the hard way with the opioid crisis and the pill mills, which we finally reined in after years of overprescribing, abuse and black market sales.” Seitz did not respond to a request for comment. Patient advocates argue that method would overly complicate the system for buying marijuana, thereby hindering access to the drug — and providing access is the entire point of the medical marijuana program. “I’ve heard some rumblings that the state might do this even if banks do step up, and I don’t understand that,” said Kevin Murphy, a Cleveland-based attorney with Walter | Haverfield who represents a variety of marijuana-related businesses in the country. “What’s the purpose of doing this if private banks are willing?” “And if the state gets involved, it could discourage banks getting involved because they don’t want to compete with the state,” Murphy added. “It also adds another step for the patient to take in order to get their medicine. That’s not good for

the patient, and it’s not good for the business.” And stakeholders in the banking industry say the closed-loop system does nothing to correct any of the underlying issues holding banks back from serving the cannabis sector. “Our perspective on this is there needs to be some kind of coming together between state and federal law on it,” said James Thurston, spokesman for the Ohio Bankers League trade group. “Apart from anything else, this is a huge public safety issue. It doesn’t make sense to have people walking around to do things like pay taxes and make payroll with literally trash bags full of cash. And the issue will only get worse as more money comes into the system and more states come online with medical marijuana.” Closed-loop systems have been proposed elsewhere, including Colorado, but they’ve all fizzled because of their apparent ineffectiveness in a marijuana program and surrounding legal issues. After all, if a state is facilitating transactions in the marijuana sector that would seemingly be a clear breach of federal law. So a closed-loop system — which has been proposed in Ohio at other times in the past — is likely flawed from the very start. And the odds of it being implemented in Ohio or anywhere else are incredibly slim. “(Lawmakers) are being creative and trying to address this, and we commend them for that,” Thurston said. “But until there is a change at the federal level with how marijuana is classified, or one of these bills is passed to hold financial institutions harmless from banking marijuana-related businesses, you are still going to be breaking federal law.” “We will continue to work with the legislature as we always do,” Thurston added. “But you can’t get around this conflict between state and federal law.”

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CRAIN’S CLEVELAND BUSINESS

BUSINESS OF MARIJUANA Briggs, who graduated from Kent State University, said it would have been easier to start the school out west, but he opted to do it in his home state. (Contributed photo)

JOBS

CONTINUED FROM PAGE 12

Briggs then looked to establish his school in Northeast Ohio. It would’ve been easier to do so out West, but he returned to the state to be closer to his now 4-year-old son. Between late summer and fall 2016, Briggs began seeking space around Cleveland and set up a website. Seven months later, the school essentially was set up.

The next level Briggs bought and flipped another house in Cleveland Heights from the county land bank, using the proceeds to pull a $65,000 line of credit to fuel the business. His connections in the sector, along with a partnership he

struck with Pennsylvania-marketing firm Faces International, helped connect him with advisers and instructors to get the school started up. Today, the school counts a staff of eight plus 10 instructors (two of whom are on staff). The schools takes up about 4,400 square feet of space on two floors in its Independence office building. It logged revenue of $360,000 in 2017 — which excludes another $270,000 in receivables for courses some students are still paying off (a payment plan lets course takers cover 40% of their costs upfront then pay the rest down). The cannabis school has three different programs. Horticulture starts with plant basics then grows into marijuana. The business course covers how to run a dispensary and cultivation center. And the medical applications course is targeted toward education for doctors. An executive program brings all three programs together. “There are lots of people from outside the industry trying to get involved,” Briggs said. “And that’s who we decided to cater to.” The school, citing research from marijuana staffing and human resources agency Mary Jane Staffing, estimates Ohio will have 2,000 jobs as the young industry — limited in the number of state-awarded operating licenses available — becomes operational. The firm estimates there are 200,000 jobs today in the country in the cannabis industry, and it expects that number to grow to 630,000 by 2025. “We have thousands of jobs in the industry becoming available and no qualified people to take them,” Briggs said. “Sometimes people are hired from out of state. And the perception is these people know what they’re doing, but you can’t really know. They’ll sell you on the fact they’ve been in a mature market. But that doesn’t mean they know what they’re doing.” One of the school’s first instructors, who still teaches there, is Rob Ryan, executive director of the Ohio Patients Network. The group formed in 2001 with the express purpose of legalizing cannabis for medical use. “This is preparing a workforce for an up-and-coming economic activity,” Ryan said. “So I applaud what they’re doing.” Ryan is closely plugged in to all of the state’s efforts to legalize marijuana in the past 17 years, often consulting with stakeholders and politicians across the country. “I’ve had some discussions with some manufacturing types out of state and one of the things I hear is that they take someone into processing or extraction, it takes some time to get them trained,” Briggs said. “This training (from the school) cuts down on their training, which is time they could be doing something else. So I think it’s a great thing. And I’m surprised he doesn’t have some competitors.” Briggs said he’s working to launch online courses in the fall. He’s also considering an expansion across Ohio with possible satellite offices in either Columbus or Cincinnati. He also wants to set up internships and tours with Ohio companies — but it’s a little too early, and laws here may be too onerous, for that to happen just yet. Later this year, he’ll likely be looking for more investors to help take the business to the next level. But the response from possible funding sources in Ohio has been tepid thus far. “As hard as it is to raise money here, it’s as easy in California or Colorado,” Briggs said. “I would advise the investment community here to wake up or they’re going to miss out on a lot of opportunities.”

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BUSINESS OF MARIJUANA

Marijuana program needs physician buy-in By LYDIA COUTRĂ‰

â€œIâ€™m doing the same thing that I always do. Itâ€™s just sort of acknowledging that one of the treatments that the patient may utilize could be a cannabinoid.â€?

lcoutre@crain.com @LydiaCoutre

The success of Ohioâ€™s medical marijuana program â€” designed to be fully implemented by Sept. 8 â€” hinges upon a key puzzle piece: the participation of doctors willing to recommend the drug. The State Medical Board of Ohio has not yet approved any physicians for certificates that allow them to recommend medical marijuana to patients, and as such, itâ€™s difficult to gauge the interest among docs. The application process went live March 19, with the first round of approvals anticipated in early April. In the meantime, physicians could be taking the two-hour continuing medical education course needed to receive their â€œcertificate to recommend,â€? or CTR, which is required of physicians who wish to recommend medical marijuana to patients. Vendors for the required education say course participation hasnâ€™t been as high as theyâ€™d like, but theyâ€™re hopeful that it will ramp up as September nears. â€œIt just takes time, because it starts with the docs,â€? said Vicky Mossman, vice president of Strategy for TMCI Global, one of the approved vendors for the two-hour courses. â€œIt starts with them learning and overcoming this stigma.â€? To qualify to receive a CTR, applicants must hold an active, unrestricted M.D. or D.O. license from the State Medical Board of Ohio, and must complete at least two hours of continuing medical education that will assist in diagnosing qualifying conditions, treating those conditions with

â€” Dr. Solomon Zaraa, Compassionate Cleveland founder

medical marijuana and possible drug interactions, according to the Ohio Medical Marijuana Control Program. Other states that have legalized medical marijuana have struggled to garner physician interest. Some in Ohio worry there wonâ€™t be enough doctors willing to recommend certified marijuana to meet patient demand. Others foresee no issues after the initial push. And with Northeast Ohio hospital systems slow to get behind medical marijuana as a valid treatment, it may fall to independent and unaffiliated doctors to get CTRs and meet patient demand. â€œI guess the fear is that if the hospitals donâ€™t come along, will that impede the ability of the program to succeed?â€? said Craig Haran, a health care attorney at Frantz Ward in Cleveland. MetroHealth, for example, hasnâ€™t issued any guidance to its doctors and has no current plans to do so. Both St. Vincent Charity Medical Center and Lake Health are neither encouraging nor discouraging their physicians who wish to get a CTR. University Hospitals issued a memo last year by its then chief medical officer noting that the program is not operational until September, and as such, UH recommends its physicians, nurses and pharmacists to keep in mind that â€œit is against current UH policy to prescribe, recom-

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mend or facilitate the use of marijuana.â€? The systemâ€™s new chief medical officer, Dr. William Brien, is working to review and update UH policy on the matter, and leadership will be making recommendations, according to a spokesperson. For its part, Cleveland Clinic â€œcontinues to stand by the Food and Drug Administrationâ€™s approval process as the most effective way to ensure the safety, efficacy, and purity of medications provided to patients across Ohio.â€? Until marijuana products receive federal regulatory approval, the Clinic â€œwill not be involved with the distribution of unapproved cannabis products through dispensaries,â€? according to a statement. Dr. Solomon Zaraa, a Cleveland physician who has submitted his application for a CTR, said that addressing access in September will fall to independent family physicians and private practice providers. He doesnâ€™t believe that big health care institutions, which make â€œlarge, complicated decisionsâ€? will be able to move quickly on this. As such, last year, Zaraa â€” who also works for UH â€” founded a practice of three medical marijuana doctors called Compassionate Cleveland. There arenâ€™t many doctors openly working in this space today, Zaraa said. Right now, patients wait weeks and drive hours to visit the practice,

where he evaluates, and in some cases diagnoses, manages, treats, makes recommendations and assesses risks of using marijuana for treatment. â€œIâ€™m doing the same thing that I always do. Itâ€™s just sort of acknowledging that one of the treatments that the patient may utilize could be a cannabinoid,â€? Zaraa said, noting that right now, patients are obtaining marijuana for medicinal purposes by â€œany means necessary.â€? Dr. Ted Parran, co-medical director of Rosary Hall at St. Vincent, said there arenâ€™t many in traditional medicine with an appetite for getting a CTR. He doesnâ€™t know many doctors interested in recommending medical marijuana, because they donâ€™t think thereâ€™s very good clinical evidence for its efficacy, he said. There are the physicians who are the early adopters of medical marijuana who will help address the initial interest from patients, but after that passes, he doesnâ€™t believe there will be access issues in getting enough doctors. As an addiction doctor, Parranâ€™s primary concern is for patients who are predisposed for substance abuse. One in eight people have an â€œaddicted brain,â€? and for them, marijuana can be â€œextremely dangerous,â€? he said. â€œSt. Vincent certainly isnâ€™t encouraging people to think about becoming certified to (recommend),â€? Parran said. â€œBut in no ways would St. Vincent either take actions against or reprimand or actively discourage any members of the medical staff who want to become certified to recommend it.â€? Other states that have legalized medical marijuana have also faced hurdles in attracting interested physicians to the program.

New Yorkâ€™s Medical Marijuana Program launched in January 2016. To increase the number of eligible practitioners, particularly in rural counties where fewer physicians are available, the state broadened who could register with the department to certify patients to include nurse practitioners, and then physician assistants, according to a spokesperson for the New York State Department of Health. In Florida, where the ratio of qualified physicians to patients in the registry is 1:70, the state health department has heard anecdotally from patients that they wished for more doctors in their neighborhoods, â€œbut we do not have hard data to back the â€˜need,â€™â€? according to Mara Gambineri, a spokesperson for the Florida Department of Health. â€œWe have heard from doctors a variety of concerns related to becoming qualified to certify medical marijuana for patients,â€? Gambineri wrote in an email. â€œThe most common concern is that although medical marijuana is available in Florida, it remains illegal at the federal level. This causes concerns for doctors who have DEA licenses, for those who receive federal funding for research, those working in publicly funded hospitals, etc.â€? Zaraa said that fear, uncertainty and doubt are stopping more of his colleagues from pursuing CTRs. â€œSome people just donâ€™t want to rock the boat. Some people donâ€™t want to try something new or are comfortable where theyâ€™re at. Some people are afraid of getting in trouble â€” Iâ€™ve heard it all,â€? he said. â€œBut you know what? Thereâ€™s a lot of people who are just on the fence, and theyâ€™re just waiting for it to become relevant for their own practice to tip them over.â€?

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CRAIN’S CLEVELAND BUSINESS

THE LIST

Largest Architectural Firms Ranked by Local Registered Architects

LOCAL REGISTERED ARCHITECTS THIS YEAR

COMPANY

TOTAL 1-1-2018 1-1-2017 STAFF SPECIALTIES

MAJOR CURRENT PROJECTS

TOP LOCAL EXECUTIVE

GPD Group 520 S. Main St., Suite 2531, Akron (800) 955-4731/www.gpdgroup.com

670

Schools, municipal and county buildings, retail, health care

Berea Local Schools, Warrensville Heights Schools, CVS Health, Baldwin Wallace student dorms

Darrin Kotecki, president

DLR Group|Westlake Reed Leskosky 1422 Euclid Ave., Suite 300, Cleveland (216) 522-1350/www.dlrgroup.com

Architecture, interiors, mechanical, electrical, fire protection, structural engineering

Ohio State University Arts District, Case Western Reserve University/Cleveland Clinic Health Education Campus, Denison University Performing Arts Center

Paul E. Westlake, Global Cultural + Performing Arts Leader, senior principal

Perspectus Architecture 13212 Shaker Square, Cleveland (216) 752-1800/www.perspectusarch.com

Health care, education, senior living, government, clubs and recreation, workplace, retail, historical architecture

Lawrence Fischer William Ayars, managing principals

ThenDesign Architecture (TDA) 4135 Erie St., Willoughby (440) 269-2266/www.thendesign.com

Architecture, planning, interior design

Campus International School, Kent State Athletics, Gilmour Academy, University of Notre Dame Athletics, Euclid 7-12 school and stadium, Tormenta FC stadium

Robert A. Fiala, partner

Vocon 3142 Prospect Ave., Cleveland (216) 588-0800/www.vocon.com

113

Workplace strategy, interior design, architecture, experiential brand design

The Quarter - W. 25th and Detroit development, KeyBank, Cleveland Clinic, PwC, Jones Day, Global X

Deborah V. Donley, principal

Hasenstab Architects Inc. 190 N. Union St., Suite 400, Akron (330) 434-4464/www.hasenstabinc.com

Health care design, educational design, laboratory/research design, master planning, interior design

Akron Children's Considine Addition, OSU Wooster new laboratory building, Summa Health bed tower, Chippewa 7-12 school, Akron Zoo exhibit

Dennis M. Check, president

Onyx Creative (1) 25001 Emery Road, Suite 400, Warrensville Hts. (216) 223-3200/www.onyxcreative.com

Design; architecture; electrical, mechanical and structural engineering; interior design; branding; graphics

Dick's Sporting Goods, Pet People, Kirkland's, Mills Fleet Farm, Fabletics, Catan's Bridal, Melt, Summit Racing Dallas, Golden Gate Plaza

Mike Crislip, president, partner Carole Sanderson, CFO, partner

Bialosky Cleveland 6555 Carnegie Ave., Cleveland (216) 752-8750/www.bialosky.com

Mixed use, religious, office, higher education, laboratories, multifamily housing, planning, interior design, MEP engineering

Van Aken District, Tri-C Campus Center, Centric, NASA Glenn Research Center, Mueller Lofts, Lorain County General Health District, Progressive Alpha

Jack Alan Bialosky Jr., senior and managing principal

KA Inc., a NELSON Brand 6000 Lombardo Center, Suite 500, Seven Hills (216) 781-9144/www.kainc.com

Tenant planning and corporate interiors; law, finance, technology, advertising, media, health, hospitality, retail, mixed use, multifamily

Mellody Farm, Shops at Riverside, Macy's in San Francisco, The East End, Annapolis office building, Station Row office building, Worthington Yards

John G. Burk, managing director, Cleveland office

Bostwick Design Partnership 2729 Prospect Ave., Cleveland (216) 621-7900/www.bostwickdesign.com

Health and wellness, medical planning, higher education, library, civic, corporate offices, interior design

Cleveland Clinic, Cleveland Clinic Florida, Tri-C, MetroHealth, Saudi Arabian Medical Centre, University of Pittsburgh, Penn State, UPMC, Allegheny Health

Robert Lewis Bostwick, president, director of design

AECOM 1300 E. 9th St., Suite 500, Cleveland (216) 622-2300/www.aecom.com

285

Education, federal services, laboratory technologies, architecture, interior design, landscape design and planning

Lakeland Community College, Kent State University, GSA, U.S. Coast Guard, Cuyahoga County, Amtrak, Lakewood City Schools, Michigan Baseball Foundation

Laura Rees, vice president, portfolio delivery leader

RDL Architects Inc. 16102 Chagrin Blvd., Suite 200, Shaker Heights (216) 752-4300/RDLarchitects.com

Placemaking, interior design and architecture; commercial, senior living, workforce housing, market-rate housing, office, renovations

Notre Dame Village, Hyatt Regency, ExactCare Pharmacy, Pinstripes, Arhaus Furniture, McKinley Place, Quadax, Western Reserve Group

Ron Lloyd, president, founder

DS Architecture 315 Gougler Ave., Suite 102, Kent (330) 678-6144 /www.dsarchitecture.com

Restaurant/retail, police/fire/administration, K-12/higher education, adaptive transformation, health care

Tri-C Safety Center, Westlake Senior Center, Jefferson Co. Children's Home, Hasawi Development, LN Gross Restoration, Stow City Schools

Jeffrey G. Meyers, partner

Richard L. Bowen + Associates Inc. 13000 Shaker Blvd., Cleveland (216) 491-9300/www.rlba.com

Commercial, education, housing, justice, transportation

Hanover Mall redevelopment, Central Ohio Transit Authority facility, Cleveland Metropolitan Housing Authority Carver Park, Cleveland Kennel, Walsh University

Richard L. Bowen, president

Dorsky + Yue International 23240 Chagrin Blvd., Suite 325, Beachwood (216) 468-1850/www.dorskyyue.com

Mixed-use developments, multifamily residential, office buildings, retail centers, hospitality and entertainment

Lake Nona Town Center, Orlando; Riverparc Towers, Ft. Lauderdale; West Bay Plaza, Westlake; Bruckner Commons, Bronx; 4 Las Olas, Ft. Lauderdale

William Dorsky, managing principal

C.C. Hodgson Architectural Group 23240 Chagrin Blvd., Suite 350, Beachwood (216) 593-0057/www.ccharch.com

Master planning and repositioning for senior and assisted living communities, rehabilitation, memory care, hospice, spa and wellness centers

Miami Lakes Senior Living; Altenheim memory care and rehabilitation; Nazareth Home Clifton, Kentucky; Miami Jewish Health; Bethany Village II, Dayton

Cornelia C. Hodgson, president

Braun & Steidl Architects Inc., a Studio of Prime AE Group 1041 W. Market St., Akron (330) 864-7755/bsa-net.com/primeeng.com

Higher education, hospitality, federal, religious, K-12, historic preservation, health care, office, municipal, recreation, multifamily housing

University of Akron Law School, Canopy Hotel by Hilton Columbus, Broadview Heights Recreation Center, FirstEnergy Transmission Lab Akron

Charles Louis Schreckenberger, principal

Stantec Architecture 1001 Lakeside Ave., Suite 1600, Cleveland (216) 454-2150/www.stantec.com

Science and technology, education, health care, workspace

Yale Science Building, Cleveland Clinic Taussig Cancer Center, Chagrin Falls Intermediate School, Texas Woman's University Science Building

Michael Reagan, VP, science and technology; Michael R. Carter, managing principal

HBM Architects LLC 1382 W. 9th St., Suite 300, Cleveland (216) 421-1100/www.hbmarchitects.com

Public, academic and medical libraries and other design-driven projects for civic and cultural institutions

Public libraries for Cleveland, Cuyahoga County, Toledo, Shaker Heights, Hudson and Stark County; libraries for Texas State University, Texas A&M

Peter Joseph Bolek, president, director of design; James Shook, Kevin Kennedy, principals

CBLH Design Inc. 7850 Freeway Circle, Middleburg Heights (440) 243-2000/www.cblhdesign.com

Health care, higher education, libraries, interior design

VA Medical Center projects, Ohio State University, Cleveland State, MetroHealth, University Hospitals, Heights Libraries, University of Akron, Allegheny Health

Marc B. Bittinger Michael D. Liezert Jeffrey Valus, principals

Domokur Architects 4651 Medina Road, Akron (330) 666-7878/www.domokur.com

Architecture, landscape architecture, planning, interior design, construction management

J.M. Smucker, University of Illinois at Urbana-Champaign, Muskingum Watershed Conservancy District, Orrville Boys and Girls Club, Forest Preserves of Cook County

Michael Domokur, owner

Dimit Architects 14414 Detroit Ave., Suite 306, Lakewood (216) 221-9021/www.dimitarchitects.com

Architecture, interiors and urban design. Multifamily housing, planning, mixed-use retail, office, hospitality, renovation

One University Circle, Harbor Verandas, MitchellÕs Ice Cream - Shaker Heights, Forest City Square, College Club Apartments, One Midtown Luxury Townhomes

Scott Dimit, managing partner; Analia Nanni Dimit, principal, director of interior architecture

K2M Design 3121 Bridge Ave., Cleveland (216) 357-2794/www.k2mdesign.com

Architecture, interior design, engineering

Marriott Key Center, Statler Arms Apartments, Circleville Juvenile Correctional Facility

Scott C. Maloney, president

Jencen Architecture 2850 Euclid Ave., Cleveland (216) 781-0131/www.jencen.com

Branded environments, retail design

Refresh Dental, Detroit; Alex & Ani, Miami; Johnston & Murphy, Mississauga, Ontario; Toronto Pearson International Airport

Nicholas P. Zalany, managing partner

Van Auken Akins Architects LLC 1422 Euclid Ave., Suite 1010, Cleveland (216) 241-2220/www.vaakins.com

Architectural design and planning, construction management and interior design

Cleveland StateÕs School of Film and Media Arts, Playhouse Square Real Estate Tenant Services, Cleveland Metroparks Zoo Asian Highlands exhibit

Jill V. Akins, principal

City Architecture Inc. 3636 Euclid Ave., Suite 300, Cleveland (216) 881-2444/www.cityarch.com

Urban design, planning, mixed-use developments, civic, residential, corporate, restoration, preservation

Tri-C Metro Campus Plaza, E. 105th St. redevelopment, Statler Arms renovation, Normandy Senior Living, Fenway Manor, Innovation Square neighborhood

Alex Pesta John Wagner August Fluker, principals

Strollo Architects 201 W. Federal St., Youngstown (330) 743-1177/www.strolloarchitects.com

Health care architecture

Mercy Health - St. Elizabeth Youngstown Hospital, St. Joseph Warren Hospital, Meadville Medical Center, Beachwood City Schools

Gregg Strollo, president, principal

RESEARCHED BY CHUCK SODER (CSODER@CRAIN.COM)

Want the full Excel version of this list Ñ and every Crain's list? Become a Data Member: CrainsCleveland.com/data

The full version of this list includes 45 companies as well as additional data and executive names. To prevent ties, firms that employ the same number of architects are then ranked by total staff size. Information is supplied by the companies. Send feedback to Chuck Soder: csoder@crain.com. (1) Formerly Herschman Architects

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DECISIONS WELLNESS

S2 March 26, 2018

IN THIS SECTION 2-3 | WELLNESS Preparing for the silver tsunami Top-notch care for veterans

4-5 | HEALTH CARE Hospice organization provides comprehensive support Formalize advance directives

6 | REAL ESTATE Options for right-sizing

ONLINE: Passing along 'stuff' to your children, grandchildren

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Senior living, health care providers prepare for the ‘silver tsunami’

etween 1946 and 1964, nearly 79 million Americans were born into a generation defined by music, culture, activism and expression. Now ranging from 54 to 72 years old, the baby boomers face another age of change. They are evaluating what the next phase of life looks like, and it doesn’t necessarily equate to settling down. By 2040, there will be about 82 million older individuals, more than double the number in 2000, according to the Department of Health and Human Services’ Administration on Aging. This so-called silver tsunami presents unique opportunities for senior living providers, which are looking to entice aging adults with a variety of amenities and outlets that emphasize wellness, living and community. “The baby boomers aren’t looking only for entertainment. They want engagement,” said Diane Banning, independent living sales manager for Eliza Jennings, an Olmsted Townshipbased senior living provider. Eliza Jennings’ Renaissance Retirement Campus, for example, already offers a full list of cultural outings and dining options, although the organization is still considering new offerings as it looks ahead to its future residents’ expectations, Banning said. “The baby boomers are wanting more space,” she said. “Physical fitness will be important, and they will want access to a state-of-the-art fitness center. They tend to be more conscientious eaters, so they want more small plates and

Coming in 2019 McGregor Senior Assisted Living McGregor Senior Assisted Living www.mcgregoramasa.org Cleveland, Ohio

Cleveland, Ohio

Coming in 2019 www.mcgregoramasa.org

PHOTO PROVIDED

Eliza Jennings’ Renaissance Retirement Campus features numerous amenities and cultural and dining experiences, including pig roasts, a supper club and wine pairing dinners. vegan dishes, and casual dining options THE POPULATION instead of going to a big dining room. OF THOSE Baby boomers are smart shoppers. INDIVIDUALS AGES They want choices.” The leadership behind North Canton-based Danbury Senior Living has been paying close attention to the preferences and needs of current and the upcoming generation of residents BETWEEN 2015 AND 2040. since it opened its first independent senior living facility in 1997. Danbury — Department of Health and Human Services’ Administration on Aging now operates 16 properties throughout Northeast and north central Ohio, which include independent living apartments, assisted living centers and memory care facilities. Campus-style configurations have taken hold to minimize the disruption of a move from one facility to the next, said president Brian Spring. Wellness amenities run the gamut, from access to on-site parks and walking trails for fitness enthusiasts, to pubs and bistros for social connections, “A lot of seniors come to us with high and transportation for off-campus levels of acuity, and they are interested excursions (think margarita night at in lifelong learning,” Spring said. the local Mexican restaurant). Anytime “We’re committed to a well-rounded dining between 7 a.m. and 7 p.m., picture of wellness,” added William versus the traditional pre-established Coming in 2019 Lemmon, CEO. meal times, accommodate a demand McGregor, a Cleveland-based nonwww.mcgregoramasa.org for more flexible dining. profit provider of independent and asAs Danbury looks to grow its portfolio sisted living, rehabilitation care, and of senior living products, campuses respite and hospice services, also is located near top-level universities may building out its mix of residential choicbecome part of the mix. es. Its latest assisted living facility is

McGregor Senior Assisted Living Cleveland, Ohio

85 OR OLDER IS PROJECTED TO TRIPLE

Coming in 2019 www.mcgregoramasa.org

scheduled to open in summer 2019 and provides a more affordable alternative for cost-conscious consumers. Assisted living can cost between $3,500 and $4,500 per month, but not all individuals living on a modest budget can afford to private pay that fee. McGregor’s new 90-unit senior living facility aims to supplement pricier digs elsewhere by offering a mix of market rate and affordable units. “Central to McGregor’s mission is the commitment to support programs that allow older adults to age in place, wherever they call ‘home,’” said Rob Hilton, president and CEO. “Our No. 1 priority is to build out the capacity of services that enables affordable senior housing.”

Staying well Maximizing the aging population’s wellness is a multi-dimensional undertaking that will require more collaborations within the health care system and the surrounding community, those in the industry say. The bulging share of older adults will further strain health care providers, entitlement programs such as Medicare and Social Security, and safety net agencies. Within Cuyahoga, Geauga, Lake, Lorain and Medina counties, nearly one-fourth of the population is 60 or older. The percentage of that population will grow over the next decade. By

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2030, about 32 of the five-county region’s residents will be near or beyond retirement age, according to the Western Reserve Area Agency on Aging. Helping seniors maintain adequate nutrition and socialization are key factors of maintaining or improving wellness. “Some of the main problems among seniors are hips, heart, depression, diabetes and dementia,” said E. Douglas Beach, CEO of the Western Reserve Area Agency on Aging, which provides community-based services and supports for older adults and individuals with disabilities. Exercise slows down the onset or progression of those conditions, he said. The Western Reserve Area Agency on Aging currently addresses seniors’ wellness needs by coordinating a range of essential services, from hot meal delivery to aiding seniors in applying for money that can be used toward farmers market purchases. New community partnerships may be necessary as the demand for health care and wellness-related services increases, he said. However, technology improvements from wearable devices to telemedicine buoy some of the concerns over taking care of the aging population. “ ou can’t assume gloom and doom. Instead of looking at this as a tsunami, it’s really more like a big wave,” Beach said. “Every day, you hear of new and

14.5% 21.7%

The share of the 65-plus population in 2014. The projected share of the 65-plus population in 2040.

— Department of Health and Human Services’ Administration on Aging improved advancements in Alzheimer’s treatments. Automatic driving cars could help reduce isolation. Improving wellness as seniors age so they can remain independent is a doable undertaking.”

Caregiver demand outpacing supply Meanwhile, a pro ected shortage of caregivers also is a widespread concern among the health care industry, as more people age with the desire to remain in their homes as long as possible. According to Paraprofessional Healthcare Institute, a New ork-based eldercare advocacy organization, the .S. by 2024 will need about 1 million new obs in direct care, which includes home health aides, nursing assistants and personal care aides. At McGregor, for instance, workforce development to serve the aging and economically disadvantaged population will continue to be a priority. “In serving low-income seniors, there is a desperate need for workers, primarily health care workers, across

the continuum of the profession, from paraprofessionals, nursing assistants, resident services coordinators all the way to geriatric physicians and those with a master’s in social work,” Hilton said. To that extent, McGregor PACE offers a managed care program that provides services which address the medical, rehabilitative, social and per-

The population of people ages 65 and older is projected to nearly double between 2015 and 2050, from 47.8 million to 88 million. — Paraprofessional Healthcare Institute (PHI)

March 26, 2018 S3

sonal care needs of older adults, so that individuals can stay in their home safely as long as possible, said Ann Conn, McGregor’s chief operating officer. “The focus of PACE is providing the right care at the right time in the right place,” Conn said. “We want to support family caregivers and help manage complex coordinated care for their loved one.” The Ben amin Rose Institute on Aging also is evaluating more creative solutions to help meet the growing health care needs of the community, said Dabney Conwell, vice president and executive director of that advocacy and service provider’s Rose Centers for Aging Well, which provides home-delivered meals and programming at seven area senior centers. “We’re providing services for four generations,” she said. “We have put a lot of energy and resources into serving as thought leaders on how to best provide caregiving resources for family members or friends. We can’t do this alone.” Programming in

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he Northeast Ohio A Healthcare System is committed to a holistic approach of taking care of veterans through a comprehensive network of services and supports that target health promotion and disease prevention. The health care system serves more than 112,000 veterans in 18 Northeast Ohio locations, including at 13 outpatient clinics, two community resource and referral centers, a psychosocial rehabilitation center, a chronic dialysis center and a surgery center. A number of outpatient and homebased services are available for aging veterans who want to remain in their home as long as possible. The basic medical benefits package includes community adult day health care, home health aides, respite care, skilled home health care services, hospice and palliative care, long-term care planning and caregiver support. As veterans become more dependent toward the end of their lives, community living centers, nursing homes, veterans homes and hospice facilities also are available to them. “Many people aren’t aware of the breadth of services available to veterans and their families,” said Dr. Robert Bonomo, director of the Cleveland Geriatric Research

Education and Clinical Center. “We are poised to serve the community and deliver the highest level of care to our nation’s heroes.” The system also is researching

new breakthroughs in medicine that help fulfill its mission of providing comprehensive and high-quality care. Cleveland represents one of 20 Geriatric Research Education and Clinical Center

locations throughout the .S. Chief among their explorations is infectious disease research, including developing new shingles vaccines, treating Hepatitis C, influenza in the elderly,

Ohio has the sixth-highest population in the nation of individuals ages 60 and older. — Western Reserve Area Agency on Aging

the senior centers is evolving to meet the wide-ranging interests of its senior center visitors, from bingo games to fitness or courses on self-protection. But capacity is limited when it comes to connecting with aging homebound adults. Conwell wonders if there isn’t more of a community-wide opportunity to interact with adults to minimize their loneliness or feeling of isolation, which can trigger depression. “It seems like there’s an opportunity to engage with the corporate world in terms of volunteer service,” she said. “It could be as simple as a weekly checkin over the phone with Mrs. Smith to make sure she’s O . We can all be caregivers when it comes to taking care of individuals who are aging, and therefore support our community.”

antibiotic resistance and addressing the overuse of prescription drugs. “We are heavily invested in research and education that improve clinical programs and our veterans’ health,” said Dr. Thomas Hornick, section chief of geriatrics and clinical associate director at Cleveland GRECC.

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OUR FAMILY. OUR DECISION. When Dad’s doctor told us the treatments wouldn’t help anymore, we got together as a family and then called Hospice of the Western Reserve. With their staff of compassionate caregivers, extraordinary medical care and 24/7 support, we can keep dad at home, where he belongs. And he gets to keep his family doctor. That’s important to all of us. Living with serious illness is hard. Deciding on the right hospice and palliative care was easy. Insist on Northern Ohio’s leading hospice and palliative care provider. Call today to arrange a visit or go to our website for information.

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Formalize advance directives to ensure end-of-life wishes are fulfilled

Hospice is a family affair By WILLIAM E. FINN

llness touches everyone at some point in life. As a loved one’s condition progresses, families often feel overwhelmed trying to balance work, children, home life and all the activities of daily living. The hospice model of care is uniquely equipped to provide the comprehensive support terminally ill patients and their families need. Hospice care is provided by a collaborative hospice team of specialists, including a doctor, nurse, social worker, spiritual care coordinator, nursing assistant, expressive Finn therapists and volunteers. The focus is aimed at comfort, quality of life and helping patients and their families make the most of the remaining time. A comprehensive plan of care is developed for each family’s unique situation and needs. Although caring for a seriously ill family member is often viewed as a labor of love, the stresses and physical demands on family care providers can be enormous as the illness progresses and the complexity and intensity of the care required increases. The hospice model of care extends beyond the patient to encompass support for the whole family. Providing care can be especially challenging for adults who are still working. A national AARP study indicates six in 10 of those who are caring for older adults are employed. Working adults who are in dual roles as family caregivers frequently report feeling overwhelmed and exhausted. The resources and support provided to family caregivers are enormous.

At Hospice of the Western Reserve, this includes around-the-clock phone access to a hospice nurse, medication deliveries directly to the home and respite care to provide much-needed breaks. The physical demands of caring for a family member with a serious illness are relieved by arranging for the delivery of hospital beds, bed pulls and other medical equipment to the home, which are covered by insurance under the hospice benefit. As a nonprofit community hospice, we have a compassionate team of volunteers available to read, visit or engage in art, music and legacy projects with patients or lighten the load for families by providing assistance with household errands. Hospice removes a tremendous burden from both the patient and the family members. It not only improves quality of care, but decreases hospitalizations, re-hospitalizations and emergency room use. Most importantly, it allows each individual a choice in how to spend the final stage of his or her life. Sometimes, the course of a disease cannot be changed. However, hospice can change how a person approaches the rest of his or her life, providing comfort, dignity and quality time to families. Living with a chronic or a serious illness is easier with a circle of compassionate professional caregivers who can help share the burden. Hospice makes that happen. William E. Finn is president and CEO of Hospice of the Western Reserve.

ealth care advance directives communicate what actions should be taken if you’re too ill to speak for yourself. These legal documents inform family, caregivers and health care professionals how you want to be taken care of and who should be in charge of making those decisions on your behalf. They outline whether you want to be resuscitated, ventilated and intubated and how and where you want to die. Yet, 63% of U.S. adults have not completed their advance directives, according to a study published in July 2017 in Health Affairs, a health policy and research publication. The two main forms of advance directives that document medical preferences are a living will and health care power of attorney. People believe their loved ones will make sure their wishes are met, although fewer than 15% have ever discussed those requests with anyone, leaving family members in a potentially agonizing decision-making dilemma, according to Hospice of the Western Reserve. “Completing advance directives is such an important gift, not only for ourselves, but for the people we love,” said William E. Finn, president and CEO. “Otherwise, a tremendous burden is placed upon someone to make decisions based on what they think their loved one would want.” Those who are chronically sick and the elderly tend to struggle with facing mortality, so they avoid or procrastinate about the process. To their younger counterparts, mortality is eons away. But tragedy can strike at any time, Finn said. Formalizing advance directives early on — well before their reference becomes essential — minimizes the possibility of feeling overwhelmed. “The more we can have a public dialogue around this, and the more mainstream this conversation becomes, the less intimidating the process seems,” he said. “When you reach the age of consent or adulthood, by all means, start having a discussion with your loved ones about what’s important to you. “You can complete your advance directives in the time it takes to watch a sitcom,” he said. “It’s easy.” AARP, Medicare, churches, senior centers and health care systems offer resources to help guide the conversation with loved ones, and to facilitate the advance directives process. Care management programs, such as Western Reserve Navigator Palliative Care Services, also help coordinate advance directives for patients who have an advanced or serious illness. Kay Bacho has been working with the Western Reserve Navigator to help

NEXT STEPS Keep original copies of your advance directives where you can easily find them. Provide copies to your power of attorney, health care providers, hospital, family and friends. Also be sure you carry a card in your wallet that says you have an advance directive. — Medicare.gov

take care of her 97-year-old bedbound mother. The holistic palliative care includes nursing, spiritual support and advanced care planning resources. “A volunteer attorney came out and sat and talked with her, and helped her amend and change her will,” Bacho said. “The palliative care program has fulfilled everything we needed. They provide incredible support, and they are so caring. The resources are a tremendous relief for me, because I can focus on being more of a daughter than a caregiver.” Advance directives paperwork can also be found online via Hospice of

the Western Reserve’s free Courage in Conversation booklet (hospicewr.org/ decisions), which includes a checklist and documents that help facilitate health care planning, as well as legal advance directives forms required by the state of Ohio. “Families should have these conversations early on in a nonthreatening environment, such as over the Thanksgiving table, while everyone is healthy,” Finn said. “Take a minute, go around the table, and let’s talk about this while it’s not scary or burdensome. Then formalize your wishes. The tools are all right there.”

DECISIONS REAL ESTATE

S6 March 26, 2018

Seniors have options as they retire, right-size

Independent Living

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formidable shift in residential living is about to take place, as a growing segment of the U.S. population migrates according to their health and social needs. By 2030, the elderly population will make up more than one-fifth of the .S. population. Many will choose to stay in their longtime home as long as possible, while others will downsize or upsize according to their future needs. Seniors exploring the prospect of moving may feel overwhelmed, given the laborious and emotional aspects involved in a life-changing decision. But senior living experts say planning well in advance will help ensure a smoother right-sizing process. “Some of the most important

Lasting Moments that make your day worthwhile Independent Living at the Renaissance Retirement Campus welcomes you into a warm, friendly community surrounded by people who care. Located in idyllic Olmsted Township, The Renaissance is Eliza Jennings’ premier retirement community offering you a variety of options to design your own lifestyle experience. As part of Eliza Jennings, you’ll experience a 129-year tradition of excellence serving older adults. To experience more, call 440.235.7112 or visit us online at elizajennings.org.

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continuing care retirement campuses that offer independent, assisted and skilled nursing in one location. Not all families and older adults are aware of all the options, according to the nonprofit, which helps seniors gain access to moving or aging in place resources. Jennings, for example, was founded 75 years ago as Jennings Hall, a small rest home. It has since evolved into a full continuum of care to meet a wide range of residents’ needs, with independent villa homes, apartments for ages 55 and older, short-term rehab, assisted living care, Alzheimer’s/dementia care, longterm care, adult day services, child care, and hospice and palliative care. In August 2017, Jennings opened a new independent and assisted living facility in Brecksville. Like many senior living providers, Jennings is tailoring more of its amenities and programs to further immerse its residents within the community. “We want our campuses to be accessible to the community,” Brazytis said. “We have a number of intergenerational programs that involve local schools. We also offer lifelong learning programs, concerts on the lawn, and arts and culture events, like art, wreath-making and poetry. We just had a Mardi Gras jazz band here. Our campus is very person-driven.”

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questions people should ask themselves include: What’s important? Where do I want to live geographically? What are my goals? How can I continue to live successfully and have quality of life? For us, the most important thing is to listen,” said Lisa Brazytis, director of marketing and outreach at Jennings, which provides care and housing for individuals ages 55 and older. As the National Association of Senior Move Managers points out, gone are the days when a “retirement home” was a euphemism for a nursing home. Nursing homes may be a valuable late-life option, but modern retirement living represents a suite of residential options, from luxurious independent villas or retirement communities that provide residents autonomy yet access to a shared network of services, to

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SHOOTINGS

MARIJUANA CONTINUED FROM PAGE 1

When pressed on how functional state officials expect the program and its underlying industry to be at that time, Stephanie Gostomski, spokeswoman for the Ohio Department of Commerce, which is overseeing many related elements of the program along with the state’s pharmacy and medical boards, said the state “remains committed” to the Sept. 8 effective start date. But many stakeholders doubt the program will be operational then for a litany of reasons. “For anybody who tells you there is going to be a fully functional product line in September, there’s no way,” said the CEO for one of Ohio’s provisionally licensed cultivators, who wished to remain unidentified because of the contentious nature of the licensing process and concerns about how criticism could affect their applications for other licenses to sell and process cannabis. “It’s going to be very difficult. If it does happen, it won’t be a full market.” Ohio is among 31 states today that have legalized marijuana for either medicinal or recreational use. Nearly every state has faced some degree of setbacks in implementation. Naturally, it’s in the best interests of those in the business of growing, processing, selling and testing marijuana to see the program roll out smoothly and in a timely fashion through an established supply chain. The same can be said for ancillary marijuana businesses, like those providing lights and packaging to facilities or any of the various other products or services supporting the industry. Cultivators, though, who obviously

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“We’re from Northeast Ohio. We can figure this out from a manufacturing standpoint.”

CONTINUED FROM PAGE 1

“We’re from Northeast Ohio,” Cushwa said. “We can figure this out from a manufacturing standpoint.” The Bearacade Lockdown Response System is a polymer product designed to slide under a door and secure it in place in the case of an emergency (it also alerts local law enforcement when it’s used). So far, Bearacade has sold more than 200,000 units, which cost $59 each. Cushwa originally wanted to use metal, but that made it too costly, and no school is going to buy a product that costs $1,000 per door. Cushwa views the company’s products as a one-time purchase, and didn’t want the price to be a barrier. Bolo Stick started in 2014. It took a while for the business to catch on, but Barna said sales have been strong this year following the Parkland shooting. To date, the company has sold well over 5,000 units, and each costs $59. “I’m not in it to be a millionaire,” Barna said. That’s probably for the best. Despite an apparent demand for security products in schools, translating that to sales could be an uphill battle for companies. A February report from London-based research and analytics firm IHS Markit predicts that the U.S. school security industry would grow slowly in the coming years, as many schools and districts already have systems like video surveillance in place. New technologies or approaches like high-security doors and X-ray machines at entrances could lead to growth, but there is a high cost barrier educators would

— Bill Cushwa, National School Control Systems LLC founder, on coming up with products that could help people get out of a building during an emergency

The Bearacade (above) and Bolo Stick (right) are products that can help secure a door in an emergency. (Contributed photos)

have to overcome. The Lakewood City School District employs a host of security measures, from card readers and intercoms controlling access at doors to district-wide active-shooter response training. The Lakewood schools also started using an app for students to report concerns this past January, adding to its security hotline, said spokeswoman Christine Gordillo. Both options are anonymous, but the district wanted to meet students where they are — and students don’t often make phone calls. They text. The district is also looking into barricade-type devices that would prevent a locked door from being

able to be opened in an emergency, said chief of operations Chris Donahoe. Parents and teachers have expressed interest in such a matter, but the cost is a concern. And there are questions of what kind of security measures are best. The Akron Public Schools employs a lot of technology in its security strategy: video cameras, metal detectors and programs to monitor social media for threats or concerns. But those are just tools, said Daniel Rambler, director of student support services and security for the district. In his eyes, the critical approach to school safety is in relationships. For example, Akron uses its metal

need to come online first to produce the marijuana supply, are only required to be operational by the end of the year. Lawsuits have slowed the state’s awarding of its 24 cultivator licenses, which seems to have set back all other licensing. Those suits are from applicants who weren’t awarded licenses questioning the state’s scoring methods. Gostomski said the state is in the process of finding a private validator to verify its scoring data — which may have excluded aspiring cultivator PharmaCann Ohio Inc., which applied to run a grow facility in Buckeye Lake, from getting a license because of scoring errors. (The state is considering awarding a 25th grow license to that firm, but it hasn’t done so yet.) Those lawsuits are typical in every state where applicants are denied licenses, said Kevin Murphy, a Cleveland-based attorney with Walter | Haverfield who works with marijuana businesses across the country. So it’s a hurdle every state-sponsored program faces. And while Murphy said he believes the state is doing a “nice job” handling those suits, they still can hinder a program’s development all the same. “I believe you have flower, maybe some other types of oils or products available (in Ohio), but you’re not going to have a fully functional marketplace for 12-18 months,” Murphy said. “Right now, you have some potential license holders who haven’t even bought their machines yet. It’s going to take time.” Murphy pointed to programs in states such as Pennsylvania and Maryland, where dispensaries had lines out the door on the first day of operation. In the best scenarios, some products are available, but de-

mand typically far exceeds supply until the market has some time to grow into itself. The “smarter operators,” he said, have built delays into their business plans. “Things are slowing down, and we have built that into our plans,” said the Ohio cultivator who prefers to remain anonymous. “We got a worstcase scenario built in of the market delaying until next year.” That person, whose facility is under construction, said a grow cycle is about 20 weeks. And that doesn’t account for time for drying, curing and packaging products.

“Everybody that has experience in the cannabis industry knew the September deadline was never going to be met.” — CCV Research CEO Jonathan Cachat

So putting aside that businesses can’t make contracts yet with testing labs and distributors or any other companies in their supply chains because of licenses yet to be awarded, among other uncertainties, if a cultivator is ready to plant in May, their first harvest wouldn’t come up until practically early September. “So look at where we are now and where we’re supposed to be in September,” the cultivator said. “That’s why you’re going to have little to no market then.” Some ancillary businesses counting on an industry running at full steam this year could be “in for a rude awakening” come September,

detectors randomly, treating them as a deterrent. While the district has found weapons like stun guns or knives through that approach, Rambler said they’ve never found a gun. Any time the district’s team has confiscated a gun at one of its schools, it was because of a tip from someone. Longtime school safety expert Ken Trump (no relation to the president) agrees. Much of his consulting work in recent years has been focused on litigation consulting in cases like rapes and wrongful deaths at schools, and the common thread has been failures of people and procedures, not technology, he said. Trump started Cleveland-based National School Safety and Security Services full-time about 20 years ago, after multiple jobs in the field. Technology and products can support security, he said, but it’s really a “people issue.” The focus should be on training and planning. There are companies in the area taking a comprehensive approach to school safety, like DriveMind Group in North Canton. said David Croft, a Cleveland-based attorney with Meyers Roman Friedberg & Lewis working with several marijuana-related businesses. “And I would be very concerned if I were someone trying to meet these deadlines and I have a processing or cultivation license,” he said.

‘Hurry up and wait’ It’s very much a “hurry up and wait” situation, said Jonathan Cachat, CEO of marijuana research and consulting firm CCV Research (the acronym stands for Conscious Cannabis Ventures) and director of laboratory sciences at Hocking College in Nelsonville. Cachat founded CCV in California in 2014 but returned to Northeast Ohio last year to work with Hocking. He’s helping the school as it seeks one of the state’s licenses for a university-run cannabis testing facility, which he’d oversee if the school gets a license. The lab itself is estimated to cost about $5 million and employ a dozen people. The school announced last September that it was seeking a license. And Cachat is frustrated because he feels there’s been little movement from the state on licensing the school or not. And while some stakeholders have praised the state for its handling of the licensing and for being open and transparent about that process and development of the medical program, others have been more critical. That includes Cachat, who said he feels there’s been a “lack of stakeholder engagement” and “miscommunication.” “Everybody that has experience in the cannabis industry knew the September deadline was never going to be met,” Cachat said. “They were all gung-ho about meeting deadlines, that it would be no problem. But we’re

President J.R. Suppes calls the small distributor an “educational think tank,” connecting schools with products and services in areas like robotics and curricula resources, as well as in safety and security. The company sells door barricade system Bolo Stick, as well as products like a mobile tracker for buses, a sanitizing misting product for flu seasons and an anonymous communication portal. Secure My Campus in Beachwood also aims to address school safety comprehensively, tackling topics like the drug epidemic, suicide and bullying, in addition to topics such as violent intruders. The company approaches safety from a community standpoint, meeting with local police when it gets a contract with a school. Currently, it’s working with about a dozen schools in Northeast Ohio. The company offers an evaluation service and then recommends a variety of products, services and training that could serve as possible remedies from partners it works with like pepper spray and security product maker Mace Security International Inc. in Cleveland. Safety can’t be a once-ayear process, said partner Mike Pray. “It needs to be a thought every day,” Pray said. sitting in the peanut gallery rolling our eyes like, you guys are way off on this.” Maybe dispensaries will be open and product could be moving through the supply chain, he said. “But will any legitimate physicians recommend Ohio medical cannabis? Will patients be able to purchase products off shelves on Sept. 8 this year? There’s no way.” The licensing lawsuits Ohio is facing, Cachat contends, could’ve been avoided — or possibly even better managed — if officials listened more closely to outside experts and took better clues from other states. “I’m frustrated because all of this hoopla and rip-roar could’ve been avoided should they just engage with people who knew these problems were coming from the very beginning,” he said. “It’s a simple matter that they could’ve avoided this by engaging stakeholders in Ohio who have been through this process before in other states. There is certainly no shortage of them here.” Meanwhile, processors, dispensaries and testing facilities have yet to receive any provisional licenses, which is stalling efforts to build out those facilities. Combined, these issues are casting a cloud of uncertainty over how prepared Ohio will truly be for it’s medical marijuana program to be running effectively come September. “I’m hearing a lot of skepticism about it. But I do think it’s still doable to see patients be able to purchase medical marijuana in September,” said Thomas Rosenberger, executive director of the National Cannabis Industry Association of Ohio, a trade group. “We’re not out of the woods yet, but it’s not out of the question. Issuing licenses, certificates of operation, getting doctors registered to recommend it all are things that still need to happen.”

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CRAIN’S CLEVELAND BUSINESS

AKRON

Power, pencils propel Akron’s GPD Group By JUDY STRINGER

engineering of substations and transmission lines,” he said. “That has been an important growth area for us.”

clbfreelancer@crain.com

From the $14.5 million reconstruction of South Main Street through downtown Akron to the second phase of Cleveland’s $331 million Opportunity Corridor, GPD Group has a hand in some of the region’s highest-profile construction projects. The Akron firm is designing an artists’ village out of shipping containers in the Rubber City, drafting the redevelopment of Berea’s Front Street, rehabilitating century-old sewer lines for Cleveland Water Pollution Control and envisioning a new city center for Streetsboro — to name a few of its public projects — all while engaged in various stages of more than a dozen planned or proposed new school buildings. And that’s just in Northeast Ohio. GPD’s retail division has re-engineered RaceTrac’s gasoline convenience stores, which span 12 Southeast states, and completed more than 550 Taco Bell remodels or new construction projects across the country. Other retail clients include Jo-Ann Fabrics, Jack in the Box and PNC. Its telecommunication group has designed and installed cell towers and antennas for the nation’s largest coverage providers. “We do telecom and retail projects now in all 50 states,” said GPD president Darrin Kotecki. “This is a much different firm than it was 30 year ago, and it has been a very fun ride.” GPD actually dates back to 1961, when Cordell Glaus, Bruce Pyle, Bob Schomer, Mel Burns and Bill DeHaven opened an engineering office on Akron-Peninsula Road. Early business focused on power transmission, roadwork design “and all that unsexy infrastructure stuff,” Kotecki said.

Pencil pushers

GPD Group helped Akron secure a federal grant for its Downtown Promenade Project for South Main Street, and the company is helping the city determine what the work will encompass. This shows some of the possibilities. (Contributed rendering)

In 1986, the partners sold the business to employees in a broad-based ownership model that GPD maintains today. Three years later — the same year KotecKotecki ki joined the company as a civil engineer — GPD moved into downtown Akron’s Canal Place complex. It had about 36 employees at the time, he said. Annual revenue was south of $2 million. Today, GPD has roughly 675 employees, a number that will balloon to 725 during the bustling summer construction months. The firm brought in $105 million in 2017 and recently topped Crain’s list of the region’s largest engineering companies. Akron city engineer James Hewitt at-

tributes much of the company’s success to employee ownership. About 96% of GPD’s employees own a piece of the company, according to Kotecki. No one, however, can own more than 4%. In his 30-year career with the city, Hewitt has worked with GPD on dozens of projects, from skywalks and bridges to water plants and sewer basins. Most recently, GPD assisted in preparing and drafting applications for a federal grant that Akron ultimately won for its Downtown Promenade Project and the company is “now working with us to determine what we want the road to look like,” he said. “They have a good, quality staff,” Hewitt added, “and as an employee-owned company, they take great pride in ownership of the product that they deliver because it is their company.” Another big factor is the company’s growing diversification. Over the years, GDP increased its presence in the edu-

cation, retail and telecommunications sectors. In fact, Kotecki said, his firm’s relationship with the wireless industry dates to the first cellular networks in the 1980s. Most recently, it added an energy division focused on renewables. The firm also transitioned from what Kotecki calls a “Big E” — mostly made up of engineers — to a more balanced engineering and architectural play. About 60% of its work today is engineering, while the other 40% is architecture, and its professional base of engineers versus architects reflects that mix, he said. In addition, GPD has been “fortunate,” according to Kotecki, to have some big-name clients in its corner. For example, a longstanding partnership with FirstEnergy Corp., which is in the midst of an infrastructure upgrade that will cost upward of $700 million, has helped propel GPD’s power group. “We are assisting in the design and

GDP’s current growth strategy involves expanding into new geographical markets, particularly with public projects. Kotecki said the retail and telecom work is national, but the public works and education contracts are predominately Ohio-based. It’s had some early success winning water utility bids in Louisville, Ky. Kotecki, however, is especially encouraged with GPD’s fledgling foothold in Houston. “The 12th-largest school district in Greater Houston is the size of Cleveland, Akron and Columbus added together,” he said. “There are 100,000 kids, and that is their 12th-largest.” Last summer, GPD acquired SBWV Architects, a private Houston firm with a strong educational focus. Kotecki said the union gives his company more visibility in the booming Southeast Texas school-building market. In Ohio, districts add a new school maybe every 50 years, he said. New construction here typically replaces an aging structure. In the Houston area, however, districts are growing so fast they are building new schools — not replacement schools — every year. Such ripe territory will allow GPD to expand its Houston office quickly and eventually advance roadway and utility work there as well, Kotecki said. The Rubber City firm is also in the process of launching a new practice to complete for federal contracts. “We like to grow not for the sake of growing in size but to create opportunities for all of our employees,” Kotecki said, “and if we are going to do that on public side of the business, we need to be in more than one state.”

Specialty hospital is Crystal Clinic’s next big step By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre

The Crystal Clinic Orthopaedic Center’s recently announced specialty hospital has been a long time coming. In mid-February, the physician-owned hospital announced it will invest about $100 million in building a 60-bed specialty orthopedic facility in Fairlawn to offer surgical and nonsurgical care. It’s been more than a decade in the making — and certainly a significant investment in a market dominated by juggernaut health systems with respectable orthopedic practices of their own. In 2008, a foundation was even put in for a new facility, which, at the time, was a joint venture between Crystal Clinic and Summa Health System in Akron. But it didn’t get much further than that. The economy took a nosedive, and by 2014, Summa Health sold its 49.65% stake in Crystal Clinic for $17 million to a third-party group — GBS Corp. of North Canton — that has become the center’s silent partner. “Our initial relationship, joint venture with Summa was always with the understanding that we would build a freestanding orthopedic specialty hospital with our relationship,” said

Suntken

Bennett

Ronald Suntken, president and CEO of Crystal Clinic, which now is leasing space from Summa Health. Suntken said Crystal Clinic has been searching “diligently” throughout the region for a location to build. The for-profit clinic now provides inpatient services at St. Thomas Hospital in Akron, where it leases space from Summa for about $2.6 million annually. The lease ends in December 2020, and Crystal Clinic expects to open its new facility in the middle of that year. Services at St. Thomas will continue until the new facility is completed. Suntken said it is “premature” to speculate as to how the project will be financed, as they’re now working through alternatives. Meanwhile, it’s the second for-profit hospital announced within the past year in Northeast Ohio. Late last year, Lake Health joined a team of independent doctors who are developing a specialty, acute care hospital in Beachwood. The for-profit,

full-service hospital, expected to open in early 2019 and cost between $50 million and $60 million, will specialize in orthopedics, urology, general surgery and gastrointestinal procedures. Tom Campanella, director of the health care MBA program at Baldwin Wallace University, said he wasn’t surprised to hear that Crystal Clinic was planning to build another for-profit hospital. Orthopedics is a lucrative area in health care, he said. The specialty pays well from a reimbursement standpoint, and it’s a growing market with aging baby boomers in need of new joints. The technology is also advancing rapidly, allowing for more cost-effective, less-invasive procedures. “It allows for a lot of disruption in the marketplace,” he said. Having already established its brand in the market, Crystal Clinic has a bit of a leg up when it comes to competing with the major health care systems, Campanella said. As Crystal Clinic builds off that, establishing contractual relationships in the area will be key — with major insurance carriers and with larger employers, especially those that are self-insured, he said. Founded in 1988, Crystal Clinic began with 10 to 12 people and has grown steadily, adding other small practices over time. The group attracted like-minded people who wanted to do

orthopedic surgery in a high-quality, low-cost setting, said Dr. Gordon Bennett, board president of Crystal Clinic. It began offering inpatient services in 2009, which marked the beginning of its joint venture business with Summa Health. In a call to investors in late February, Summa interim CEO Dr. Cliff Deveny said the effect of Crystal Clinic’s exit will be “minimal.” He said that Summa has added orthopedic surgeons and spine surgeons and that the system is “in a sense, rebuilding our orthopedic practice.” However, the future of Summa’s St. Thomas facility is in question — and has been for several years now. In 2015, at the start of what would be brief and tumultuous two-year stint at the helm, Summa’s then-CEO, Dr. Thomas Malone, told Crain’s Crystal Clinic would have to find a new home once its lease was up. In 2014, Summa shuttered St. Thomas’ emergency department. Today, the hospital — which dates back to the 1920s — houses Summa’s behavioral health and addiction programs. In an emailed statement, Summa spokesman Mike Bernstein congratulated Crystal Clinic on its venture. As for St. Thomas, Bernstein said Summa is “continuing to review future options for the facility, but no decisions have been made. We’ll provide updates in the future as they are warranted.”

Crystal Clinic’s 160,000-squarefoot facility, which will be located on Embassy Parkway in Fairlawn, will include 12 operating rooms and 60 inpatient beds — the same numbers Crystal Clinic uses at St. Thomas. It adds an inpatient facility near Crystal Clinic’s existing outpatient services on Embassy Parkway. Crystal Clinic provides outpatient services at 11 other locations across Northeast Ohio. Last year, the clinic delivered about 125,000 office visits and performed nearly 15,000 surgeries. Crystal Clinic employs almost 900 people, 43 of whom are physicians. According to a report from Moody’s Investor Service, a “majority” of for-profit hospitals are positioned to benefit from recent changes in the federal tax law. Crystal Clinic said that had nothing to do with the decision to build a new hospital. “It’s just been steady, progressive, controlled growth (that) has gotten us to the point that we find ourselves today in a very successful, very financially sound entity that is positioned well for continuing health care reform,” Suntken said. Pending city approval, construction will begin in spring of 2018, with Hammel, Green & Abrahamson in Milwaukee and IKM in Pittsburgh serving as project architects and Cleveland-based Turner Construction Co. managing the building process.

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AKRON

VR’s impact is very real in Northeast Ohio By DAN SHINGLER dshingler@crain.com @DanShingler

Virtual reality is a real thing in Northeast Ohio — and it’s becoming a much bigger thing, too. Just ask Bill Myers. About two years ago, he founded two virtual reality (VR) meetup groups, one in Akron and the other in Cleveland. Today, they have a combined membership of nearly 900 people, with more inquiring about them and joining every week. “I get probably one to five new members that join every week, which is great,” Myers says. For Myers, VR and its cousin, augmented reality (AR), is more than a passing interest. It’s a way of life, and it’s how he makes his living. His company, New Territory, runs a VR gaming arcade in Akron’s new Northside Marketplace. It also does commercial development out of its offices at Akron’s Bounce Innovation Hub business incubator. Myers says he hasn’t gotten rich yet. But what he sees in terms of the local level of interest in VR and AR has him optimistic that he’ll be able to succeed. First, he plans to run the arcade and do development for applications like commercial marketing and advertising programs, but eventually he hopes to primarily develop new immersive media for educators. He’s optimistic, he says, because he sees a growing acceptance of VR and AR by an increasingly wider audience, from gamers to marketing departments, to medical and industrial training programs and high-tech government research organizations like NASA Glenn Research Center.

New Territory founder Bill Myers is working to build a company based on virtual reality in Akron, but he says the technology is starting to show up at firms and institutions across Northeast Ohio. (Dan Shingler)

Folks come from all of those organizations, and more, to some of the monthly meetups, Myers said. Each meeting is usually a dozen or few dozen people, and not the entire membership. “There really is no one demographic that shows up, and I think that’s the joy of this particular meetup. There are students, entrepreneurs. You can be someone who’s an expert or someone who’s just curious about the technology,” Myers said. The membership includes some old hands in the VR world because, while gamers and consumers might be new to VR, some other local players in the field are not. Take Lincoln Electric, for example. Sure, the maker of welding equipment is using VR in its new $30 million training center in Euclid, but it’s been using VR for a long time now, said spokesman Greg Coleman. The tech-

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nology is more cost effective, and effective overall, than training with actual welding equipment, he said. “Our education team under the direction of Jason Scales ... includes an R&D team that develops virtual reality welding training simulators for sale to welding educators and industrial training departments. We have been producing these products, (which are) in popular use in high schools, community colleges and technical colleges for 10 years now. Those same simulators are in use at our own Welding Technology & Training Center here in Cleveland as well,” Coleman said in an email discussion. Ten years might seem like a long time for what most consider a new technology, until you talk to the folks at NASA. “It’s been more than 20 years now,” said Herb Schilling, a computer scientist on NASA Glenn’s Scientific

Computing and Visualization Team who occasionally attends the local VR meetups. Nationally, NASA uses VR for a variety of applications, Schilling said, from helping to train astronauts in Houston to explaining and demonstrating new technology or testing methods at NASA Glenn, where it has a team of VR developers. In Akron, California-based BioFlightVR is working alongside Akron Children’s Hospital to develop new medical applications for virtual reality, which they say can be used to train physicians and even surgeons, without having to use live patients. And, in Canton, another startup is hoping to make it in the VR development world. Cory Boyle founded Deep Field VR there at the beginning of 2017, so he could focus fully on VR after working on the technology for a Cleveland media company. Like Myers, he said he’s finding increasing demand for the technology on the part of local companies. “I’ve done some trade show experiences for a company making chemical products. ... They wanted to have a fun and novel way for other people to learn about their product. I’ve done some AR experiences for trade shows also,” Boyle said. All of the players in the industry locally said they’re finding both the demand and the skills they need here. They all agree that the industry is only going to get bigger in Northeast Ohio and around the world. “If you look across the Ohio landscape, just in the year that I’ve been here, there’s certainly been a groundswell of awareness,” said BioFlight co-founder and chief creative officer Rik Shorten.

He and others said the technology takes people to places where they could not otherwise go. That includes the sides of steep mountains in the Western United States, a favorite demonstration that Myers uses. Or it could take you inside a wind tunnel at a NASA test center, where real airspeeds would be hundreds of miles per hour, said Paul Catalano, a VR applications developer for NASA contractor DB Consulting. “When you’re engaged with a VR presentation, you’re definitely paying more attention,” Catalano said, noting that’s true even for people like him, who spend a fair amount of their work days in VR environments. Those involved with the technology say they hope it, along with the local meetups, continue to grow in Northeast Ohio. That will be important if the region is to carve out a place for itself in the growing industry, they said. Myers is optimistic that will happen. “I believe location-based VR will continue to grow at entertainment centers or innovation centers. … I also see the health-tech corridor and what’s going on with medical technology in Cleveland as being an area where VR can continue to grow,” Myers said. He also thinks the industry is about to get a huge boost, especially in terms of public awareness, when Steven Spielberg’s next film, “Ready Player One,” a futuristic film set largely in VR environments, is released on March 29. That will be a big event for Myers and others who attend the meetups, he said. “I’ll be there opening night with all my VR buddies ready to rock and roll, but we won’t be in costume. I reserve that for ‘Star Wars’ opening nights,” Myers said.

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CEO, Vocational Guidance Services In fourth grade, Bob Comben got his first job offer: sweeping a local hardware store every Saturday morning for a couple of hours. ¶ Years later, he discovered that his father was actually paying the quarter he earned every week, in the hopes of instilling a work ethic in Comben, who is now president and CEO of Vocational Guidance Services, a nonprofit that provides vocational rehabilitation services and paid work opportunities to people with barriers to employment. ¶ “So I’d like to think I learned the lesson, and that’s what we do,” Comben said. “We help people who have a barrier to employment, many of whom have a work ethic. Almost all of them have never had a chance to work, though.” ¶ VGS has grown substantially since 1999, with triple the number of people working in its social enterprises and nearly triple its budget. Comben said he expects that growth to continue. ¶ “If the need’s out there, we’re going to figure out a way to meet it,” he said. — Lydia Coutré

Five things Hobbies Doing things with family and friends.

A place you’ve always wanted to visit? England

As a kid, what did you want to be when you grew up? Running Chrysler, GM or Ford.

Favorite place in Northeast Ohio? Home

Best piece of advice you’ve ever received? His father told him that management and leadership are based on teaching people how to do their jobs better.

Lunch spot The Guidance Grille Located at VGS headquarters 2235 East 55th St., Cleveland

The meal A Caesar salad, grilled asparagus and garlic bread; sliced London broil served over garlic bread, yukon gold mashed potatoes and grilled asparagus with a side salad; chocolate cake with whipped cream.

The vibe The Guidance Grille is the training grounds for those at VGS to work in the food service industry. It is open to the public, but mostly serves those working and training at VGS.

The bill $19.90

What does VGS do? VGS is a vocational rehabilitation agency with a mission to prepare people with barriers to employment for a brighter future. In the pursuit of our mission, we work to break down barriers to employment, effectively changing lives by providing an opportunity for people who couldn’t previously do so to earn a paycheck. Through various locations throughout the Greater Cleveland and Columbus areas, we provide job assessment, training and placement services for people with disabilities or other employment barriers. These barriers may be physical, mental or emotional. They may also include a history of addiction or incarceration. We serve people of all ages and backgrounds, including veterans who may suffer from PTSD.

disabilities have better attendance records and a lower turnover rate than people without a disability. In other words, hiring the individuals we serve, or contracting for the social enterprise services we provide, can save employers money by reducing the “hidden costs” of recruiting, hiring and training, as well as the downtime associated with each. Third, reduced funding by the government represents an ongoing challenge for us. Since most of our fee-for-service individuals are referred by government agencies, their budgets and referral policies are directly impacted by state and federal budget cuts and procedural changes. Likewise, our government-funded social enterprises are similarly affected.

How does the work of VGS fit into national employment numbers? Do national employment numbers accurately represent your work? Unfortunately, the numbers we see are much lower than those being touted in the media. Still today, nearly 70% of people with a disability do not have a job. In Cleveland, that rate is higher at 74%. More than 31% of Ohioans with disabilities live in poverty. The unemployment rate for someone in Ohio with a disability is more than 40% greater than for someone who is not disabled. It is, however, these very same discouraging numbers that make VGS so timely and relevant in today’s job market.

What are the current opportunities for VGS? We need to capitalize on the current tight job market by enhancing awareness for our services and our people’s abilities and then build upon our success stories. We have the substantiated results. The employers that have used our services and hired our people are very satisfied and can provide valuable testimonials. We already serve 26 different counties in Ohio, including our most recent expansion into Columbus last year. There is so much room to grow. We need to get the word out and do more community-based work to let companies of all sizes in a wide array of industries know of our proven-effective, nontraditional employment alternative.

What are the biggest challenges VGS faces in securing employment for its clients? The biggest challenge is a lack of awareness. Many employers don’t realize that this untapped, well-trained workforce exists. Despite the fact that our agency has served the community for more than 125 years, our work has not received the recognition it needs to reverse negative employment trends for the disabled. A second challenge may be bias. Some employers may assume that someone with a disability cannot be productive or meet designated quality standards. In reality, the opposite is true. Our people are eager to learn and work, which makes them highly productive, committed and reliable. Studies have shown, in fact, that people with

What keeps you interested in your work? That’s an easy question to answer. It’s all about the satisfaction — not just the good feelings that come from seeing someone for the first time in their life feel confident and productive, but also knowing that we’re making a positive impact on the local economy. We’re effectively getting people off public assistance and empowering them to sustain themselves, care for their families and strengthen communities. We’re responding to the need of filling job vacancies in some of the most critically impacted market segments. We are changing lives and communities and helping people to realize brighter futures. I can’t think of a more rewarding job than this one.

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