EDA announces pending sale of Baugh Drive warehouse to medical marijuana distributor

The EDA Board of Directors met in a Special Board meeting this morning. With a unanimous vote on a motion by Greg Harold, seconded by Jim Wolfe, the Board approved a resolution authorizing the Chair and Secretary to sign a Letter Of Intent (LOI) to sell the former Atlantic Skyline Building at 426 Baugh Drive for the full asking price of $5,750,000 to Parallel Virginia, LLC, a pharmaceutical processor of medical cannabis. The sale is contingent upon the conditional approval of the company’s application for a pharmaceutical processor permit in Health Service Area 1 by the Virginia Board of Pharmacy – a decision expected in March 2021. As authorized by law, the Virginia Board of Pharmacy may award conditional approval for only one pharmaceutical processor application in this health service area.

The Commonwealth of Virginia passed legislation approving the production and use of medical cannabis oil in 2018. The legislation established five Health Service Areas with one pharmaceutical processor per area. The Board of Pharmacy has already awarded permits in Areas 2-5. The Area 1 permit reopened for applicants in the fall of 2020.

Parallel Virginia, LLC, if awarded conditional approval, will begin establishing its manufacturing presence in the spring of 2021. This experienced, multi-state operator is already successfully operating in four states – Georgia, Massachusetts, Colorado, and Florida. In addition, the company is currently developing a recently awarded research-focused operation in Pennsylvania in partnership with the University of Pittsburgh.

Parallel has a strong research and development component in every operation and has already signed letters of intent for strategic research and workforce partnerships with several public and private Virginia institutions of higher education.

The company’s industry-leading experience and multi-state success will greatly benefit the Warren County and Front Royal area. In the first five years of operation, they project a capital investment of tens of millions of dollars and the creation of hundreds of jobs.

Virginia law requires doctors who want to write prescriptions for medical cannabis to register with the Board of Pharmacy. Patients prescribed medical cannabis are required to pay an annual fee in addition to the cost of the prescription. The law also limits the number of dispensing facilities within the Health Service Area to five. The company, if selected, will establish its pharmaceutical processor operation at this facility, and has future plans to identify separate, stand-alone dispensing facilities within other localities in HSA 1.

Aerial perspective of the 426 Baugh Dr. warehouse – photo, graphic courtesy of WCEDA

Finally, selling the building will save Warren County taxpayers approximately $25,000 per month, or $300,000 a year, in loan payments, utilities, and insurance costs. It was a priority of the Board to get this building back into the hands of the private sector and back online creating jobs and adding to the economic engine of our community. This prospect will create jobs, generate tax revenue, and develop licensed medicine for patients in need. Doug Parsons, EDA Executive Director noted, “We believe this company is a good fit for our community. They have been thorough, transparent, and accommodating in thinking through their potential presence in Virginia. We appreciate their interest in our community and their commitment to making a lasting, positive impact in our region.”

Also following the closed session, on a motion by Tom Patteson, seconded by Harold, the board unanimously approved a short-term storage lease with Interchange Group for 10,000 square feet of space at 426 Baugh Drive for $4,125 per month.