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Stream Realty Partners is pleased to present for sale Elevated Up – an almost turnkey cannabis manufacturing (Type 6 and Type 7) and distribution (Type 11) facility with grant of provisional license now before the state agencies for approval of the annual license. This brand new facility is located in Humboldt County, California, the heart of the Emerald Triangle, which is home to over 2,700 licensed cultivators and potential vendors. With work performed to date over the past four years, you will save four-to-five years in licensing, entitlements, and building to code. All equipment is included in the sale.
The buildout is designed for extraction, processing, cold storage, lab space, and distribution. Equipment includes C1D1 HAL Extraction Pod, APEX Extraction Module, Master-Bilt sub-zero freezer, and 800 amps of power to boot. The business has a favorable lease in place with options to renew until 2031, with lease rates that are below neighboring properties. Elevated Up is in the “Cannabis Innovation Zone” in the City of Arcata and neighbors to some of the most reputable brands in California. The business is permitted to manufacture 24 hours per day, 7 days a week. Manufacturing licenses may be have reached the limit for this area and as a result the offering is extremely rare and one-of-a-kind.
Humboldt County is part of the largest cannabis-producing region in the United States. It has been on the forefront of marijuana since the 1970s as the climate is especially conducive to cultivation. With over 20% of the residents working in the cannabis industry, it is known to produce some of the best tasting cannabis in the world. Flower from the area carries a “proof of origin” labeling, guaranteeing quality across the supply chain. California law protects this proof of origin and from a branding perspective the value of such proof of origin will only increase in value over time as more states and international markets become available.
TURNKEY CANNABIS MANUFACTURER & DISTRIBUTOR
Extremely rare cannabis license combination: volatile manufacturing, non-volatile manufacturing, and distribution license all in one facility. There are only 182 volatile manufacturing (Adult and Medicinal) licenses in the State of California, less than 1.8% of the active licenses.
The Emerald Triangle (Humboldt, Trinity, and Mendocino Counties) is the largest cannabis producing region in the United States as the climate is extremely conducive to marijuana growers. It is known to produce some of the highest quality marijuana in the world with great flavor. Marijuana grown here carries “Proof of Origin” labeling. It is estimated that 20% of residents in Humboldt County make a livelihood off cannabis.
$2.3M IN CAPITAL INVESTED
The founders have invested over $2.3M to build out the licensure to date and construction at this facility. All PP&E, including domain names (“DesignerDrugs.com”) will be transferred upon sale. The building was thoughtfully designed for extraction, manufacturing, processing, cold-storage, lab space, and distribution. The power supply is 800 amps, 220v – 600v.
The arduous licensing process takes four to five years to complete, as the regulations for volatile manufacturing is especially stringent. The founders have worked with the state agencies to construct a facility for which the annual licensure should be made available and invested heavily to ensure safety and functionality. The prospective purchaser should have familiarity with state licensure requirements as well as any prospective buyer will be required to provide change of ownership information to the state as the sales transaction progresses through escrow.
PRODUCE AND DISTRIBUTE YOUR OWN PRODUCTS
Your own packaging, labeling, and distribution allows “branding” to be complete. As you control the manufacturing and distribution, you can ensure quality and profitability throughout the process.
SYNERGIES WITH DISTRIBUTION LICENSE
With access to countless cultivators in Humboldt County, a buyer can pair the manufacturing and distribution businesses to maximize synergies. Furthermore, you have the ability to package, label, and distribute products that are made in house. The Type 11 License permits distribution to any licensed business in the state.
24-HOUR CANNABIS ZONE
Elevated Up is located in the Cannabis Innovation Zone (“CIZ”) in the City of Arcata. There is no residential in the zone and the city allows operations 24 hours per day, 7 days per week. There is 24 hour on site security.
RAPID GROWTH IN CALIFORNIA
The California market is positioned for rapid growth as it is an immature market. In 2020, the sales in California are projected to be $4.3 to $5 billion representing a 40% growth from 2019. The customer base is 6 to 7 million with approximately 600 retail stores. Nationwide, sales are expected to be $15 billion in 2020 with expectations to double by 2024.
SEED TO SALE” POTENTIAL
The company can integrate smoothly into your existing operations to help you become vertically integrated and realize cost synergies across the supply chain. With facility and licensure work almost complete, this offering is a great start if you are looking to launch a career in the cannabis industry. Furthermore, under IRS code 280E, only deductions a cannabis company can take pertain to cost of goods sold. Vertically integrated retailers can take higher tax deductions, as these companies are directly involved in the production of cannabis and infused products.