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Marijuana services drive sales at St. Louis electric firm during pandemic

Last year, Birkel formed a subsidiary, Birkel Cultivation Solutions, serving the equipment needs of marijuana growers
Credit: SLBJ

ST. LOUIS — The COVID-19 pandemic and economic disruption upended capital investments in Missouri's fledgling medical-marijuana industry, but Birkel Electric increased its cannabis business nonetheless.

Birkel, an electrical contractor based in Chesterfield, entered the marijuana services industry last year and formed a subsidiary, Birkel Cultivation Solutions, serving the equipment needs of marijuana growers.

Once Missouri awarded licenses to medical marijuana growers, dispensaries, testing labs and others in late 2019 and early 2020, the budding businesses began preparing building designs and raising capital.

"Then COVID hit," said Mike Birkel, president and owner. "It really impacted the industry because the money stopped, and existing commitments were reduced or taken off the table."

Birkel said the new marijuana companies had to downsize their plans. Plans for $10 million investments became $4 million investments.

Before COVID, Birkel estimated that his marijuana subsidiary would add $7 million to his $20 million in annual revenue. But even with the pandemic and resulting industry investment reductions, he has $8 million in project commitments this year.

Birkel, which provides engineering and security design as well as installation for the highly regulated marijuana businesses, is currently working on six cultivation or grow facilities, seven dispensaries and the first test lab to open in the state, EKG Labs in Maryland Heights."What is required is very complex," he said.

Birkel also has personally invested in medical marijuana businesses, including BeLeaf Medical in Earth City, which was awarded three cultivation licenses, two manufacturing licenses and five dispensary licenses, all in the St. Louis area. "I believe in the medical part of it enough to invest," he said. 

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