Cannabis-Rx CEO Provides Insights on How the Regulated Marijuana Industry is a New Niche for Real Estate Specialists
10 7월 2014 - 10:54PM
Business Wire
Llorn Kylo, CEO of Cannabis-Rx (OTCQB:CANA), a real estate
company focused on opportunistically acquiring, selling/leasing
real estate, and assisting in the growth of the licensed cannabis
industry specific to real estate and financing, today shared his
perspective on the opportunities offered to real estate
professionals by the regulated marijuana industry. Mr. Kylo’s
commentary on the industry is as follows:
The continued growth of the licensed marijuana industry, or the
“green rush,” has spawned no shortage of “ganjapreneurs” seeking
suitable real estate to operate and capital to grow their
businesses.
From grow schools to security firms, producers of ancillary
products such as fertilizers and hydroponic lights to branding
agencies, these individuals are looking for ways to capitalize on
potentially lucrative business opportunities tied to this nascent
industry.
The rush to capitalize on an industry that is projected to
exceed $10 billion by 2018, according to The ArcView Group, a
network of cannabis industry investors, has created excitement
among entrepreneurs, real estate owners, investors, and even
municipalities, cognizant of the attractive potential tax
revenues.
Conversely, the rapid formation of these new canna-businesses
has also shined a bright light on the inherent challenges
associated with operating in both this highly regulated and
scrutinized space, where state and federal laws differ.
The state-by-state patchwork of regulations has created an
opportunity for entrepreneurs’ to capitalize on the strong
fundamentals driving the demand for properties in the markets that
are designated for licensed marijuana operations.
Whether it is a retail store front or a warehouse, what all of
these canna-businesses have in common is that they need real estate
and capital to operate. This in turn has created a unique
opportunity to provide property and financing solutions.
When you strip away all the excitement around these
opportunities, a key factor in the viability of most cannabis-based
businesses will be identifying, securing and retrofitting the real
estate in order to operate successfully.
For instance, the demand for property in Denver alone – which
permits both medicinal and recreational marijuana use – is
staggering. Currently, marijuana cultivation and manufacturing
facilities occupy roughly 4.5 million square feet in Denver,
according to commercial real estate information provider Xceligent
Inc. This number is expected to grow steadily with continued
investments in additional grow operations.
While the demand for space is high, it is well documented that
many of these canna-businesses have limited access to capital as
the traditional bank accounts, loans, and lines of credit are
unavailable to them.
Limited access to funding has made it difficult for these
budding companies to acquire buildings necessary to operate or pay
the 30 to 40 percent premium, which is being driven by the current
supply/demand dynamics and nature of the business to lease space in
which to operate.
In addition to simply being able to afford space to operate,
another unique challenge these businesses face is finding
properties zoned for the licensed marijuana activities. Simply
identifying a suitable property with the appropriate zoning
oftentimes is not enough. The property often needs to be
significantly rehabilitated in order to meet stringent state and
city guidelines – adding to costs.
The aforementioned challenges create a major gap that needs to
be filled for the licensed marijuana industry to realize its
potential. And here is where respected real estate and financing
specialists can pool their expertise to fill this gap, effectively
serving as “canna-fund” companies.
Canna-fund companies that are well capitalized, understand the
nuances of real estate and are familiar with unique requirements
for marijuana-based businesses are able to offer ganjapreneurs
appropriately zoned and rehabilitated real estate, along with
funding to enable them to lease or purchase their property.
For instance, providing attractive terms on sale-and-leaseback
financing arrangements with tenant purchase options provides
flexibility for the tenant long-term, while efficiently
capitalizing their growth and operations.
In turn, canna-fund companies may realize a steady stream of
cash flow if the financing arrangements are prudently
underwritten.
By providing real estate and capital to qualified
canna-businesses, these undercapitalized organizations will have
the resources to become financially viable and liquid, resulting in
potentially lucrative long-term relationships for everyone.
This is a pivotal time for the marijuana industry – and a
groundbreaking opportunity for canna-fund companies.
As laws change, the demand for expertise to make these
canna-businesses viable will only increase. Canna-fund companies –
or those with a keen vision as to what the future holds – can
effectively position themselves as go-to partners for growth and
success.
About Cannabis-Rx, Inc.
Cannabis-Rx (OTCQB: CANA) is a real estate company focused on
opportunistically acquiring, selling/leasing real estate, and
assisting in the growth of the cannabis industry specific to real
estate and financing in states where it is licensed or permitted
for medicinal and/or recreational purposes. In addition to
strategically purchasing properties at a significant discount to
replacement cost and rehabilitating the assets to enhance their
value, the Company provides licensed cannabis-based businesses with
capital and real estate opportunities to advance their growth
objectives. Cannabis-Rx also plans to offer consulting services to
licensed cannabis growers and operators. The Company does not, nor
does it intend to, grow, distribute or sell cannabis. For
additional information, please visit www.cannabis-rx.co
Cannabis-Rx, Inc.Phil Denning and Jason Chudoba,
203-682-8200cannabisrx@icrinc.comcannabis-rx.co
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