American Green Inc., a manufacturer of cannabis products, is taking an unusual step to attract new customers as it capitalizes on California legalizing marijuana: It’s buying an entire town.
The company has acquired the small burg of Nipton, California, for approximately $5 million and plans to invest as much as $2.5 million over the next 18 months to make a pot-friendly tourist destination. The purchase includes 120 acres of property with a general store, a hotel, a school building and mineral baths.
American Green, located in Tempe, Arizona, will utilize the present structures and build new ones — powered by renewable energy — to revitalize the town, said project director Stephen Shearin. Ideally, the outpost will spawn imitators, he explained.
“We thought that demonstrating that there was a viable means of giving birth to a cannabis-friendly municipality and further making it power independent could be a method of really inspiring folks to state, ‘Why can’t we do that here? ’” he explained.
The move demonstrates how far marijuana has moved out of the shadows even though an uncertain federal policy standpoint. With pot now legalized for medical and recreational use in California, Nevada and six other states, one in five American adults can consume the previously taboo plant since they please. That’s generated an opportunity for businesses to attempt and create cannabis a more mainstream product.
‘More Complicated Spending’
Pamela Johnston, senior vice president in Electrum Partners, a cannabis industry advising and consulting company, said restrictions on pot use and availability have limited tourism-related actions, but predicted it’ll likely be on par with different kinds of travel.
“But before we float, it will soon outpace other niche affinity travel” like wine, she explained.
Nipton, using a population of approximately 20, is situated in California’s San Bernardino County alongside the Mojave National Preserve and just across the border from Nevada. It’s about three hours by car from Los Angeles and just an hour from Las Vegas. Temperatures soar to more than 100 degrees Fahrenheit in the summer months.
The former mining town already draws visitors because of its location on the road and railroad between the major cities, Shearin said. He sees fascination about marijuana drawing more.
Small towns have had mixed responses to marijuana, even in nations where it’s legal. This’therefore why American Green decided to carry on the project: The company wants to demonstrate the benefits cannabis can provide.
American Green plans to include a new facility to produce water infused with CBD, the cannabis element that’s typically associated with decreasing inflammation and pain. The brand new Nipton will also have a manufacturing site for edible marijuana goods, retail shops, and artist-in-residence programs.
The project reveals a shift toward making marijuana more attractive to a broader audience. This includes reaching past the stereotypical stoner aesthetic and making products with milder doses per serving size. American Green has also sought to expand earnings by constructing a vending machine which utilizes biometric scanners to ensure customers are old.
The industry requires this wider acceptance to fuel its growth. Cowen & Co., a supplier of banking and investment services, is optimistic business will triumph and predictions the legal marijuana business rising to $50 billion by 2026 from $6 billion in 2016.
Even as companies try to expand the marketplace, they face a more existential threat — looming government intervention. While President Barack Obama executed policy stating it wouldn’t go after operators in nations where the plant was legalized, the Trump administration is not a fan. Attorney General Jeff Sessions has made clear that he sees no use for your plant, stating at one stage “it’s not a healthy substance. ”
American Green, which trades over the counter to get a fraction of a penny, had lost about half its value this season through Wednesday. That followed a rally in 2016 as more nations moved to overthrow the medication. The stocks’ value jumped by more than 40 percent on Thursday, but are still worth well below 1 cent.
Companies like American Green are choosing to hope for the best. As long as coverage remains unchanged, Shearin anticipates the organization’s investment will be returned and the town will be rewarding.
“The Gold Rush constructed this town,” Shearin said. “The Green Rush can keep it moving the way people envisioned it years back. ”
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