Licking County News

Apeks LLC

Entrepreneur sees pot of gold in 'green rush'

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Apeks LLC president and CEO Andy Joseph shows U.S. Rep. Pat Tiberi (R-Genoa Township) pelletized hops before and after extraction with carbon dioxide during Tiberi's recent visit to an Apeks plant.
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Apeks LLC owner and president Andy Joseph quadrupled his Johnstown company's profits between 2012 and 2013.

He wants to take it to the next level by moving into the village's industrial park.

Johnstown's Planning and Zoning Commission will hear his plan Aug. 20.

What began as a "side job" and hobby of creating equipment to extract oils for flavoring has become a booming business.

Now he's been barred from his neighborhood's block party.

He wasn't excluded for any wrongdoing, illegal activity or confrontations, though.

Joseph isn't invited because he makes a large portion of his profits from the marijuana business.

When Apeks began, Joseph's machines were used to extract oils from vanilla, mint and coffee. In 2009, he received a flood of orders from California, with buyers claiming they were extracting oils from lavender.

"Maybe naively, I thought, 'Boy, they sure have a lot of lavender in California,' " he said.

It wasn't lavender. Joseph, 42, had been swept into the marijuana craze as legalization of medical and medicinal versions of the drug began.

Many other products use butane or hexane in their extraction equipment, but that can be dangerous, Joseph said.

Apeks' products use carbon dioxide, which was a huge draw when medicinal marijuana became legal in Colorado.

"When Colorado legalized medicinal (marijuana) in 2012, that was really kind of the kick-start for our business," Joseph told ThisWeek. "They really started the whole thing. ... It's been a huge, huge growth curve. Ninety-five percent of our revenue comes from out-of-state sources now."

According to Joseph, Apeks made about $750,000 in 2012 and more than $3.2 million in 2013. He expects that figure to almost triple to $9 million for 2014.

Despite the company's revenue sources, it's the Johnstown community that would benefit from Joseph's success.

The building Joseph described as a "pole barn in my backyard" no longer can provide what his company needs, he said. If approved at Johnstown's Aug. 20 Planning and Zoning Commission meeting, Joseph and Apeks will spend $1.6 million to move into Johnstown's industrial park.

They'll begin with a 17,000-square-foot facility, said Joseph, who added that he expects to expand into the rest of the property's 85,000 square feet within a few years. The expansion would allow Apeks to hire five to 10 new full-time employees, with more coming with growth.

Joseph said he hopes to break ground in September and open the facility's doors by January 2015.

Village Manager Jim Lenner said village leaders would be thrilled to have Johnstown able to host the growing company.

"It's a benefit for not only the village, but central Ohio," Lenner said. "We're striving to be a community that's not just a bedroom community. We're trying to get people to live here and work here. ... It's good when you not only land a company here, but see the potential that they have to expand. If (Apeks) is able to bring in 10 jobs today and another 10 in another year, that's exciting for our residents."

With success comes scrutiny

Joseph's success has come with scrutiny, given the industry that has been a big part of his success. Johnstown still is a conservative place, he said, and he's not always welcomed.

"I heard through the grapevine that some folks feel that we're marijuana drug dealers," he said. "We don't have pot here; it's not even legal in Ohio. Fortunately, it's what the marijuana industry pegs as an ancillary business."

Despite what appears to be a growing trend nationwide in citizens approving legal marijuana in either recreational or medicinal forms, Joseph said, the stigma around the industry still exists.

"You can have whatever reservations you want about marijuana, whether you approve or don't approve," he said. "You can feel same way about alcohol or tobacco or anything else. But just because you don't like it doesn't mean you can ignore the economic benefits that it can give our state and, in this case, Johnstown. You don't have to like it, but at this point, the inertia is so strong that it's extremely unlikely that it's going to go backwards."

The Buckeye state

also an eventual pot state?

Joseph, who has seen the industry grow for years, said he worries that Ohio might fight the inevitability of legalization and legislate itself out of the market.

"New businesses are not going to move into a state that is the last state to legalize marijuana," he said. "(Ohio) will miss out on so many economic benefits from the change in culture. This is the will of voters. It's not like a big corporation came in and said, 'Everybody gets marijuana.' "

Although Joseph might sound like someone who is in favor of the drug, he's not even a user, he said. Even so, he said, he has seen firsthand that it could be a benefit medicinally and economically.

"I grew up with 'this is your brain on drugs,' " he said. "I saw the egg on the frying pan when I was 12 years old. It took me a long time to get past what is effectively incorrect or inadequate information.

"I'm not a big marijuana activist; that's not me. I don't use marijuana," he said. "It's just not my thing. But I've personally seen the effects of it, and I've seen it be beneficial.

"I'm also a businessman. And I see huge business potential in it."

Getting the town on board

Even Lenner agrees that the focus should be on Joseph's product, not what it is used for, he said. Lenner said he hopes Johnstown residents can see it is an opportunity.

"(Apeks) is a manufacturer of a product, just like anybody else," Lenner said. "People can stretch that any way they want to, but his operation is a manufacturing operation, and that's what we're looking into.

"What he's doing is legal, and not only does his product get shipped across the country, but it can be used for other (nonmarijuana) purposes as well."

Joseph said that considering the lack of legalization interest in Ohio, he could make more money in Colorado or California, but he wants to stay.

"Ohio is my home; I grew up here. I love it here," he said. "I've got a young family. Johnstown is my home, and this is where I want to stay."

The New Albany native said he's hoping to show people in Ohio that the marijuana industry could be legitimate, and he hopes it could even be safer and more beneficial than the tobacco industry.

"I hope I can open people's minds up," he said. "I think every community likes to see growth. They like to see more jobs, better roads, more taxes. We've watched New Albany go through this incredible growth stage. And people will say they don't want to be New Albany. But it sure would be nice to have a second lane in the road in front of my house."

Joseph reiterated that no marijuana or any other drug would be on the business' premises, and Apeks simply is a manufacturer of a product.

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