Money is growing on Nevada’s trees — a medical marijuana grow and an extraction license just sold for a combined $1.925 million.
The purchaser is Golden Leaf Holdings, a Canadian cannabis firm with marijuana businesses in Oregon; the seller is NevWa, a Nevada company operating as “Grassroots.”
Golden Leaf Holdings trades on the Canadian Stock Exchange, so the sale is “subject to certain conditions, including receipt of all regulatory and stock exchange approvals and third party consents and approvals.” While the press release does not state if it’s a cash or stock sale, a price tag this large likely involves some if not all shares of stock.
Nevada, thanks to Las Vegas’ tourist attractions, clearly offers an attractive investment opportunity in the cannabis market. The state already has a flourishing medical marijuana program in place, and adult-use licenses will be handed out in early 2018.
Golden Leaf CEO Don Robinson cited those facts in the press release, stating that “The level of tourism in the state, combined with the reciprocity provision in the state’s cannabis laws, positions Nevada to become one of the largest and most dynamic markets in the country”
Dynamic or not, $2 million is an extremely high price point for licensing in any market.
Bear in mind, this purchase does not include any real estate for cultivation, a retail dispensary, or a brand: this transaction solely involves licenses. With overhead and employee costs factored into the grow and extraction facility’s equations, the initial investment is daunting.
An OPC (grow license) in Denver, Colorado can be purchased for $350,000. A package including a grow license, extraction license, and medical marijuana dispensary license along with existing business infrastructure in Colorado Springs is currently available for $1.7 million.
In 2016, Colorado surpassed $1 billion in total sales. Nevada’s adult-use market will reportedly account for $450-550 million in annual sales.
But licenses in Nevada are far more scarce than in Colorado, and unlike Colorado or any other fully legal states, Nevada already offers reciprocity for medical marijuana patients.
The state has until next January to establish rules and regulations for its adult-use market, but expects to have an initial framework in place by July. Medical marijuana licensees will be granted the first opportunity to win an adult-use license.