Source: By Steve Raabe The Denver Post – January 08 2015
Denver-based United Cannabis Corp. is proposing to team with Native American tribes in California to grow and manufacture medical marijuana products.
United Cannabis has signed a consulting and licensing deal with a company that will build up to three cultivation and processing facilities on tribal lands.
FoxBarry Cos. LLC, a firm that helps tribes with economic development projects such as farms and casinos, has pledged $30 million to develop the facilities. FoxBarry, in turn, will have exclusive distribution rights for United Cannabis products in California.
“We will bring our proprietary products and consulting expertise out to the tribes in California,” said Chad Ruby, chief operating officer of United Cannabis.
Among other products, United develops pot strains with varying ratios of THC — the psychoactive ingredient that makes users high — and non-psychoactive cannabidiol, or CBD, which has purported medical benefits.
Ruby said that “active” and “inactive” products would be developed at the tribal facilities. Products would be shipped to and sold at licensed medical marijuana dispensaries in California.
The first proposed grow and manufacturing facility under the United-FoxBarry deal would be on Pinoleville Pomo tribal land in northern California’s Mendocino County. Future facilities would be built in central and southern California.
The licensing agreement calls for United to receive $200,000 in prepaid royalties and 15 percent of net sales.
The U.S. Justice Department said last month that Indian tribes can grow and sell marijuana on their lands as long as they follow the same federal conditions laid out for states that have legalized the drug.
Ruby said the new venture was not a direct result of the DOJ ruling. However, he said that federal approval gives the project a measure of protection in a state where some dispensaries and grows have been raided and where regulations vary from community to community.
United last year announced the creation of the Jamaica-based Cannabinoid Research & Development Co. Ltd. with a mission to “help restore the purity of (Jamaican marijuana) strains and standardize the breeding process.”
Jamaica has drafted legislation to decriminalize marijuana, a cultural icon of the Caribbean island, even though its use and cultivation is illegal.
In a recent filing with the U.S. Securities and Exchange Commission, publicly traded United reported that in the first nine months of 2014 it had revenue of $91,113 and expenses of $1.2 million, resulting in a loss from operations of $1.1 million.
United’s stock closed Thursday at 70 cents. In the past year, it has traded in a range of 6 cents to $10.50.
Steve Raabe: 303-954-1948, [email protected] or twitter.com/steveraabedp
Article source: http://www.denverpost.com/business/ci_27286013/investor-peter-thiel-buys-into-pot-business-behind?source=infinite