Ohio-based multistate cannabis firm Standard Wellness on path to growth

Coming from a finance background that began professionally at KPMG, Maloof became involved with Standard through a connection with longtime friend and Walter | Haverfield attorney Kevin Murphy, who has been ingrained in the marijuana industry for 15 years.

Prior to Standard, Maloof was chief financial officer for Mayfield Heights recycling business PSC Metals. He was a director of corporate finance for Beachwood’s Aleris Corp. before that.

Murphy was involved in an initiative in Ohio aimed at legalizing medical marijuana (Ohioans for Medical Marijuana) and would come to help aspiring marijuana businesses apply for medical licenses as they became available.

As it became apparent then-Gov. John Kasich would sign HB 523 in 2016, a group of investors began considering ways to bring a marijuana company to fruition.

Those efforts coalesced with Standard. Standard applied for cultivation and processing licenses in Ohio in 2017. The company teamed with a group known at the time as Denver Relief, which featured experts who had helped Chicago’s Cresco Labs win their licenses. (Maloof credits Denver Relief with helping Standard win licenses in other states as well.)

Around this time, Erik Vaughn was named Standard’s first CEO. But the industry is not for everyone. Vaughn ended up leaving Standard following concerns with the regulatory environment in Ohio.

Meanwhile, Maloof’s brother, Brad, owner of Amware Distribution Warehouses M&M LLC in Brook Park, was another member of a group of investors looking to establish Standard.

When Vaughn departed, Jared Maloof was asked to step in as CEO.

“I’m a huge believer in medical cannabis,” Maloof said. “This country has spent 100 years and $1 trillion on a war against a plant. And I’m happy to say the plant is going to win the war.”

But Maloof and his fellow stakeholders also saw an opportunity to break in at the early stages of this burgeoning new marijuana industry.

“I had been in metals for 10 years at the time,” Maloof said. “I figured if I was going to leave the metals space, I wanted to be in a business that has actual margins and that provides some cushion against fluctuations.”

A combination of seeing that business potential, embracing the increasingly documented benefits of medical marijuana and believing in businesspeople behind Standard is what convinced the company’s first investors to sign on.

Of course, Standard’s licenses in other states — such as the recently won cultivation and processing license in Maryland that features a Black and Latino majority owner, Christina Betancourt Johnson — are secured with local equity partners. The company has an estimated 215 investors today, which is not uncommon for a growing MSO. That group of equity partners will expand further as other new markets are sought out.

And in addition to Murphy and the Maloofs, Standard’s board of directors includes recognized Cleveland executives such as Sherwin-Williams retired CFO Sean Hennessy and Marc’s owner/CEO Marc Glassman.

Those early investors in Standard, though, include Gregg Wasilko, a longtime real estate agent and owner of Wasilko Group in Rocky River. He and a series of other initial investors pitched in $100,000 each to provide Standard’s first capital.

Wasilko, a self-described conservative, said he “wrestled with the moral conflict of more drugs in society.” But he acknowledges that he didn’t truly understand marijuana before. Research eventually changed his mind. He said he now buys into the potential good marijuana could have for people and views this business endeavor as one way to support that.

“It’s not some dark science anymore,” Wasilko said. “It’s a legitimate medical treatment for many qualifying conditions.”

Even his perspective on recreational marijuana has changed, as he backs the idea of a regulated, adult-use market — which could certainly of course be a boon for companies like Standard that are establishing themselves in this industry before federal legalization comes to pass.