Nevada has finally started to implement its medical marijuana laws more than a decade after voters approved the initiative. On April 1st, the state’s health department finalized the program’s rules and Clark County received over 200 applications for permits over the following month. Other counties reported hundreds of additional applications in total from all backgrounds.
On November 3rd, the Nevada Department of Health and Human Services awarded 55 preliminary licenses for dispensaries and more than 300 permits for other types of medical cannabis businesses. More than 180 permits were issued to marijuana cultivation sites, 117 permits were issued for production facilities to make infused products, and 17 permits were issued for testing laboratories.
Businesses that received the permits have 18 months to comply with local regulatory requirements and clear other hurdles to secure a final license.
Agritek Holdings Inc. (OTC: AGTK), a leader in compassionate care technology and agricultural solutions for the medical marijuana industry, recently announced that it received verification from the state for one of the first provisional licenses for cultivation in Nevada on behalf of its tenant and principal client My Life Organics, which plans to operate in the Clark County “Green Zone”.
Through an exclusive partnership with My Life Organics, the company purchased approximately 3.2 acres within the Apex Industrial Park Complex and plans to build a 40,000 square foot facility dedicated to cultivation. The property will be leased to My Life Organics as the sole tenant.
The project is expected to take approximately four months for the facility to be operational. Once its operational, My Life Organics will pay rent based on a percentage of its gross revenue, which enables Agritek shareholders to participate in the upside of their tenant’s business as it scales in the cannabis marketplace. These dynamics make the company unique among other landlords in the space.
“Our company through this partnership will deliver on its promise to provide the North Las Vegas community with construction, agricultural and technology jobs through building one of the state’s most sophisticated and secure cultivation facilities while producing the most consistent supply of medicinal products on behalf of approved patients,” said Agritek Holdings Inc. CEO Michael Friedman.
Nevada’s medical marijuana market is expected to generate demand for upwards of 208 million grams of marijuana, according to a state report, assuming the average medical marijuana user consumes 1.6 grams per day. The growth of concentrates and other products could increase the demand from cultivators given that these processes require more raw materials to extract CBD/THC from.
With 180 permits issued to cultivation sites so far, each cultivation facility could generate an average of about $2.4 million in revenue per year, if they were all splitting the market evenly and assuming a cost per pound of around $950.00. However, not all of those who secured a cultivation permit will make it through the process and those that do will have varying levels of scalability.
Agritek Holdings is uniquely positioned as a public company operating in the space, which provides access to significant financial resources and scalability. With plans to construct a 40,000 square foot facility, the company’s tenant could capture a significant portion of the market, which could increase ancillary demand for the company’s products and services that it provides as a landlord.
Many companies have benefited from Nevada’s recent permits, including Worlds Online Inc. (OTC: WORX) and Terra Tech Corp. (OTC: TRTC), but Agritek remains uniquely positioned as a landlord for a cultivation facility, which means that it is taking on minimal regulatory risks associated with the sector, but still benefits from its expansion.
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