Despite momentum, Cleveland School of Cannabis grapples with funding challenges

This story was republished with permission from Crain’s Cleveland Business and written by Jeremy Nobile. 

With an eye toward workforce development, the Cleveland School of Cannabis (CSC) seems uniquely situated to capitalize on a continually growing legal marijuana industry that will require an increasing number of employees.

The CSC recently reached a major milestone on this front, securing a 10-year accreditation from the Middle States Association of Colleges and Schools. This positions the for-profit institution as seemingly the first and only cannabis school in the country recognized by proxy by the U.S. Department of Education. CSC has been working on this accreditation for more than four years.

Despite this achievement, the CSC has been struggling to grow and thrive as it grapples with funding challenges, constraints of federal laws, and what has so far been an underwhelming medical marijuana market in its home state.

“There was a time when we didn’t know if we would even make it to the accreditation,” said CSC founder Austin Briggs. “We have corrected cash flow issues. But I don’t think we will be extremely profitable until we are either able to get some sort of support or we are able to structure the school in a way that it doesn’t need it.”

The CSC was founded in 2015 but produced its first program graduates two years later. Since 2017, the school has reported more than 1,000 graduates hailing from 28 different states.

Its offerings have shifted and evolved throughout that time.

Today, CSC offers 16 courses through a mix of in-person and online instruction at its Independence headquarters. Those courses can be taken separately or bundled through programs focused on specific educational areas such as dispensary operations, processing and horticulture.

And while there’s largely a focus on training to help people get jobs in the licensed cannabis industry, there are also classes geared toward plant enthusiasts, such as the “My First Plant” course on home growing.

While the CSC does not handle marijuana itself, it does grow hemp as part of its hands-on instruction.

Briggs notes that the accreditation and its home-grow classes come at a pivotal moment following voters’ passage of recreational marijuana last fall.

CSC, which has a dozen full-time employees and more than 60 instructors, really wants to position itself in the market as an industry training provider, though.

And on that front, the accreditation is a big deal as it provides some independent validation of the value of what the CSC has to offer. It is a “testament to (CSC’s) thorough planning, restorative strategic thinking and innovative approach to a bright future,” as MSA-CESS officials wrote in an oral report to the school.

Unfortunately, any business operating in an industry still considered federally illegal is fraught with unique challenges.

And because of the space it operates in, CSC remains ineligible for governmental funding sources available to more traditional workforce developers.

It can’t accept the G.I. Bill, for example, or Workforce Innovation and Opportunity Act funds, which are federal funds disseminated by state agencies.

“Most workforce development funds are federal,” said Dasia Clemente, public information office with the Ohio Department of Jobs and Family Services. “As marijuana/cannabis is considered illegal by the federal government, they do not allow us to use these funds to provide any services, including training services, to job seekers seeking employment in this occupation or any business services to employers in this occupation.”

“That’s a real downer for us,” said Briggs.

That could change if marijuana is rescheduled. But when that will happen is anyone’s guess.

It’s not all gloom for CSC, though. The school has grown steadily over the past several years and has more than 120 students enrolled now.

But the wind was taken out of its sails amid the outbreak of COVID-19. In fact, the school had opened a Columbus satellite campus in 2019 as it was growing, but that was shuttered amid the pandemic.

“We have not had a real good budget to grow with,” Briggs said. “And then COVID put a dent in our budget.”

He said the school sold half of its receivables during the health crisis to improve its cash position, and “we’ve been fighting an uphill financial battle since then.”

Briggs said the CSC is in a better position now than it was pre-accreditation. Over the last several months, it tweaked programming, tightened up its course offerings, dropped prices and increased the amount of money students pay upfront. While the business is running a slight budget deficit, these measures have helped it stabilize—at least to some extent.

“I don’t think we are going to be closing the door in the next year,” Briggs said. “I think we are in pretty good shape to survive until there are some significant changes.”

“But our ability to grow and thrive, that is another story,” he continued. “We are going to need some financial commitment or outside funding to be able to thrive in the current marketplace right now. We are just kind of hanging in there.”

Ohio’s adult-use program should provide some benefit as it materializes in the coming months. Cannabis companies are expected to add more employees to serve a significantly larger potential market. This could generate more interest in what CSC is offering as some people try to find jobs in the industry.

Exactly how many CSC program grads are employed in the industry is impossible to say at this time. Briggs said one of the organization’s many goals going forward is to track this better.

Nonetheless, several companies do seem to have a penchant for CSC grads. That includes Youngstown cultivator and process Riviera Creek, whose director of cultivation, Sam Brenkus, is an early CSC grad with a biology degree who teaches some CSC courses there on the side.

Aware he might be biased as a CSC product, Brenkus nonetheless said his company, with all other factors being equal, will typically pick a CSC grad over another applicant.

“They learn a lot of basic, foundational stuff, including simple things like what is a node or what does a nutrient deficiency look like,” Brenkus said. “Sometimes they don’t have a lot of hands-on experience, but we can teach that in-house (at Riviera). But they come with the book smarts behind it to know what you’re talking about. And they’re passionate too—people who go to school for this want to make a career out of it forever.”

But to really grow and thrive under this lingering overhang of federal prohibition, Briggs said CSC could use a financial partner, especially as other workforce development funds remain out of reach.

Regardless, CSC officials remain wholly committed to the school. In a worst-case funding scenario, CSC might shut down its physical location—which would undermine its ability to retain accreditation—and pivot to online-only instruction.

“Really, the next big milestone for Austin and his team is to get funds dedicated to cannabis for continuing education,” said Kevin Murphy, an attorney and managing partner for Walter Haverfield as well as a CSC board member. “That is going to be a real game changer for them.”

While federal funds are presently unattainable, the school hopes that some of the future adult-use marijuana excise tax revenue in the state earmarked for a social equity and jobs fund could be funneled its way. But even if that happens, those funds won’t be coming for many months more at the soonest.

“There is really no other industry that works without workforce development support,” Briggs said. “What happens when everyone hires all these people who are serving cannabis to people but don’t know anything about it? I think that’s something (government) really needs to think about.”

If and when federal laws around marijuana do evolve, however, and governments take an interest in cannabis workforce development, CSC stands to capitalize.

“As soon as we see a change, and there’s support to students to go to school for this, we will have a short-term monopoly on that,” Briggs said. “But we are not relying on that. We’re just trying to be the best at what we do and have a proven track record.”