by Jeff Pederson
For The Beacon

THE SHEBOYGAN FALLS PLAN COMMISSION approved a conditional-use permit for Midwest Cannabinoid Extraction LLC to rent the rear unit of the Metallic Tube Applications building at 136 Vision Parkway, during a monthly meeting held Tuesday, May 28, at the Sheboygan Falls Municipal Building. – Review Photo by Jeff Pederson

The Sheboygan Falls Plan Commission provided limited preliminary approval to a conditional-use permit request for a hemp processing facility to occupy an existing building in Vision Business Park, during a monthly meeting held Tuesday, May 28, at the Sheboygan Falls Municipal Building.

During the public hearing portion of the meeting, Midwest Cannabinoid Extraction LLC owner Nick Cooper appeared before the Plan Commission to reveal his plans to locate a hemp processing and hemp by-product formulation facility in the rear unit of KRISB Holding Co., also know as Metallic Tube Applications, at 136 Vision Parkway in Vision Business Park in Sheboygan Falls.

The conditional-use permit covers a change in use of the building from a vacant light industrial manufacturing space into a rented unit for hemp processing and product formulation.

Cooper, who is currently enrolled as a student at Central College in Pella, Iowa, described the cannabinoid (CBD) extraction process that would be taking place at his new hemp processing facility.

“Industrial hemp is legal in Wisconsin and the extract of cannabinoid, or CBD, from industrial hemp is what we will be doing at this facility,” Cooper said. “CBD is not psychoactive in any way, but THC, which is also found in industrial hemp, is psychoactive. We will not be working with THC in any way, only CBD oil, which we plan to bottle for legal sale.

“I have been working with a consultant every step of the way on this project,” he said. “As a result, there are some details that I will not be able to share, but I will be able to get that information upon request in a timely manner.”

During the new business portion of the meeting, Cooper went into greater detail regarding his plans for the hemp processing facility.

“We have a license for processing industrial hemp into CBD oil, which must be renewed with the state each year,” Cooper said. “Under the provisions of the license, we need to follow strict guidelines during the manufacturing process.

“Attention to detail in this process is very important,” he said. “We filed for and got the license this past January. The license will need to be renewed again in January 2020.”

At the request of Commissioner Sam Kohlhagen, Cooper detailed step of the CBD extraction process.

“We start with industrial hemp, which is basically a cannabis flower,” Cooper said. “We then use methanol to extract the cannabinoid. Through evaporation of the solvent, we are able to draw out the CBD islet and CBD oil.”

Cooper went on to note that between 500 and 6,000 pounds of industrial hemp wound be processed into between 500 and 1,000 gallons of CBD oil each day at the production facility.

He also stated that five staff members would be employed at the facility to start with plans to expand to up to 13 employees over time, which would include a full-time on-side operations manager.

“We are going to need engineers and chemists to work at this facility,” Cooper said. “These will be high-quality, very highly educated people. We will definitely have a full-time onside operations manager, who will responsible for the day-to-day operations and everything related to safety and security.”

Cooper stated that all engineering for the project has been completed and a site plan is in the works for the facility.

“We are still in the planning process for the building and the site,” Cooper said. “We are anticipating doing the build-out in July and be up operating and extracting by this September.

“We are going to be operating in a 6,000-square-foot building with plenty of space available to add on in the future,” he said.

Cooper also indicated that typical work shifts would begin between 6 and 8 a.m. with regular working hours and the potential of adding second and third shifts based on demand.

In response to a question from the commission about the potential passage of a marijuana legalization law in Wisconsin, Cooper said such legislation would impact the future of the facility.

“If marijuana is legalized, that is something we would definitely look into as a business option,” Cooper said. “Marijuana does have a great deal of medicinal value, and we would definitely explore expanding in that direction if that would happen.”

Mayor Randy Meyer expressed his support for approval of the conditional-use permit. However, he also voiced some concern about the dangers of the chemicals used in processing CBD oil out of industrial hemp.

“To me, meeting the fire code is a high priority considering the presence of methanol and the chemicals that will be used and created in this process,” Meyer said. “One of the conditions that would definitely need to be met is passing a fire inspection.

“Another concern is the storage of solvents in vats,” he said. “It is important to know the size of these vats. To be on the safe side and in general just to be better informed, I would like to be able to contact other similar-sized communities which have these types of facilities. It would be good to get some additional background information from them to get a better handle on what we can expect here. I think this is a learning curve involved here for everyone.”

Commissioners Sam Kohlhagen and Chad Neerhof also expressed similar reservations about the facility.

“I think there are some loose ends here that should be filled in before this goes for final approval,” Kohlhagen said. “Since this is a chemical plant, I think it is important for us to see a site layout, because there are potentially some large hazards in play here.

“It would be good to reach out to other communities with these types of hemp and CBD chemical plants and check into their track record,” he said.

“I agree that the plan is not detailed enough at this time in order for me to feel confident in giving full approval,” Neerhof said. “There are some questions that have not been answered and we don’t’ have a site plan yet, which is important.”

In response to the reservations expressed by Plan Commission members, Meyer suggested limiting Cooper’s work at the facility to strictly bottling and labeling of CBD oil until a site plan is submitted for approval.

Commissioner Paul Berceau was content with allowing Cooper to carry out CBD oil bottling activity in the building.

“Considering that the solvents will not be on the site until September, I’m fine with them just bringing in the oil and bottling it in the meantime,” Berceau said. “The state code is very strict for these chemical processing plants, so I am not as concerned about that as some other commissioners are. The hazards in a building that is just doing bottling are very minimal.”

The conditional-use permit was approved under the main condition that only CBD oil bottling will take place at the facility until a site plan is approved.

Additional conditions include obtaining state-approved license, complying with state and local fire codes, passing a local fire inspection, complying with methanol storage regulations and prohibiting the production of THC.