Las Vegas Marijuana Dispensary Sells to Canadian Investors
Nevada Organic Remedies, one of the most prominent marijuana businesses in the Las Vegas Valley, recently sold a majority of its ownership of the expanding pot industry in Nevada to Canadian investors for $56 million.
The Las Vegas company operates their dispensaries, called The Source, in Las Vegas and Henderson. The company also operates two cultivation plants and a production facility in the central valley that is over 2500 square feet in size. The company has recently made a deal with Green Growth Brands which is based in Toronto. The expected date that the deal will close is Sept. 7.
The deal proposes that the two cultivation facilities, the dispensary in Las Vegas and the production facility, will be owned by Green Growth Brands. The Toronto company will also gain a license to distribute marijuana to Nevada dispensaries. After the deal goes into effect, Nevada Organic Remedies will still own the dispensary in Henderson NV and a growing facility in Pahrump.
Stephanie Klapstein, the spokesperson for the Nevada Department of Taxation, has confirmed that the owners of marijuana facilities in Nevada are allowed to transfer licenses to investors who are based out of state. According to Klapstein, an increase in out-of-state license transfers has resulted from recreational marijuana sales that started on July 1, 2017.
The co-owner and CEO of Nevada Organic Remedies, Andrew Jolley, has remarked to the fact that the company possesses a great amount of expertise that new investors can benefit from. The existing management and ownership team will remain on board to assist the Toronto company as they take over operations of the facilities and dispensaries. They also plan to remain to assist during future expansions. However, no comments about the transaction have been forthcoming from representatives of the Toronto-based company.
The Source dispensaries that have operated in Henderson and Las Vegas since 2015 serve over 800 customers per day. Andrew Jolley Has been President of the Nevada Dispensary Association since 2016. It is the largest marijuana advocacy organization in the state.
In addition to this company sale, there was another recent similar transaction that took place that involved ownership transferals to companies in Canada. The Silver State Relief marijuana company based in Reno, Nevada sold two dispensary licenses for locations in Fernley and Sparks to a firm in Vancouver named C21 Investments. The Canadian company paid approximately $50 million to acquire the sales licenses.
Since recreational marijuana was legalized in Nevada in 2016, there has been a growing trend of Nevada companies selling rights and assets to Canadian-based investors. The recent announcements are examples of this trend. This coincides with recent nationwide legalized marijuana in Canada. As a result, publicly traded Canadian companies that are rich in investment capital are investing millions of dollars in operations based in the US.
Despite all these developments, marijuana is still an illegal drug according to United States federal laws. As a result, many U.S. companies are turning to Canadian stock exchanges to publicly offer their companies to stay out of legal hot water with Washington officials.