left coast holdings

Happy staffers? William McKenzie on building a win-win business model in Michigan

Detroit was built from steel and the labor of workers that powered the very progress of the nation. But a lot has changed in Michigan since the glory days of General Motors, Ford and Chrysler. The move away from fossil fuel, outsourcing of manufacturing to foreign countries and automation has halted the assembly lines that once endlessly churned out the products that were synonymous with modern American life. Recent data showed that only 609,600 manufacturing jobs remain in the state.

Outside of Michigan’s urban industrial centers, the state also is a leader in agriculture with crops contributing more than $104 billion annually to local coffers, including apples, blueberries, cabbage, carrots, celery, cherries, beans, grapes and Christmas trees.

Now, there’s a new crop and industry that’s come to Michigan, raising hopes that good jobs and good times will come with it. And it’s attracting transplants from the West Coast. 

When California legalized adult-use cannabis, legacy grower William McKenzie was unable, for technical reasons, to make the transition from medical to recreational. 

“I was in Calaveras County and northern Sonoma County, right on the Mendocino border, and I couldn’t get my properties relicensed, so I had to shut down,” McKenzie told us.

His partner and a friend had Michigan ties, so McKenzie headed to the Midwest, bringing the seeds (literally and figuratively) for his vertically-integrated cannabis company Left Coast Holdings. He and his partners acquired multiple licenses for businesses that will officially come under the Left Coast Holdings name once the paperwork and compliance is complete. Their seed-to-sale businesses include the Heritage Farms cultivation complex, production and extraction facilities, as well as the Authentic 231 retail stores chain.  

While the legal cannabis bureaucracy never ends for growers used to doing business the old school way, today more than 11,000 cannabis plants grow on 120 acres at Left Coast’s farm in Brown Township – and they hope to double crop size to 23,000 plants in 2023. Twenty employees work the farm and production facility and another eighteen at the extraction facility, which supply Authentic 231 retail shops, with a flagship location in the nearby town of Manistee. 

The shop was the first in Michigan to unionize.  In March, employees voted to become members of United Food and Commercial Workers Local 876. For McKenzie, encouraging and even facilitating unionization seems like the best, right thing to do.  

“We signed an agreement with the union, so every time we open a store, they automatically come. We’ve had 100 percent support from all of the employees. We introduce the union to them – we say, ‘Hey,  this is our rep, your rep from UFCW, and we have a contract with them already. They’re gonna come in and talk to you,’ and nobody has voted not to unionize. People love it. You know, they wear their union shirts. We have proud union posters in our stores. We’ve also gotten support from the other unions,” McKenzie explained. 

“Now it does create some additional layers of management, right? You can’t just up and fire somebody If you feel like it because they’re in a union – you have to go through processes,” he added. “But if you work those processes into your standard operating procedure, it’s not a big deal. You can work through it.” 

“But the bigger, overarching theme here is that I want the employees to feel like this is a career opportunity for them, not just a job. I want people to feel like they’re well-represented and well taken care of. And so, from my standpoint, we already paid union wages, we already offered our people health benefits. 

“From an economic standpoint, it really didn’t make any difference to me. It doesn’t cost me any more money. Now, it would be a problem if I was somebody who was running a shady operation and I was paying people $10 an hour,  and I have to automatically raise their wages to $16.50. Since that’s not my story, that wasn’t an issue for me,” McKenzie said. 

Left Coast has contributed to UFCW to help develop a cannabis industry apprenticeship program, which will certify workers for career advancement. Again, it’s not entirely altruistically motivated; McKenzie said having an apprenticeship program is a win-win for the cannabis industry, which is new and only beginning to establish standards, practices, and the need to train potentially thousands of employees. 

“You know who the big employers here in town are, right? Morton Salt and P. C. A. (Packaging Corporation of America), which is a company that makes cardboard boxes. They’re all union. So, if you’re a union operator in the union town, those guys really appreciate and support the unions,” he said. “Not only those guys but also the local community appreciates that we’ve unionized and that we’re supporting labor, creating good solid career path jobs, you know.”

It’s been a rocky roll-out for recreational cannabis in Michigan, according to McKenzie, as well as local media and industry experts. Illegal product and excessive inventory have thinned margins for legal operators, as retail prices have cratered since recreational sales started in late 2019. The market landscape reminds him of California.

“There’s been a lot of pressure on the state recently for allowing this to happen,” McKenzie said. “The director of the cannabis regulatory agency here stepped down in October and there’s a new interim director who comes from the Michigan State Police, and he’s vowed to crack down on the bad players because there has been no enforcement here in the state. It’s pretty much been like the Wild West.”

“But I think that one of the reasons that cannabis has taken off so wildly in Michigan is because the state has lost a lot of its manufacturing jobs. So, they were looking for a new industry,” he added. “We have created a lot of jobs here in cannabis . Per capita, Michigan is not a huge state, but it’s a huge cannabis market. People in Michigan love their cannabis.”

The citizens of Manistee have been warm and welcoming to the company and what could be a big industry for the state. For the holidays, Authentic 231 has put up its annual “Clark Griswold-style” light display in the store’s parking lot for folks to enjoy. 

“We love this stuff, you know,” McKenzie said, describing the annual Manistee Sleighbell Parade held this year on the first weekend of December. “We get Clydesdales pulling a sled, with a bunch of workers from the store and everybody dresses up. It’s a Victorian themed parade, so everyone dresses up in Victorian garb.”

Sprinkle some snow on it and it’s a snow globe scene of Christmastime in a modern American factory town.

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