Grow Space For Lease?

[muir]

They make start up as painful as humanly possible...

that is the most truthful statement of all. and everyone, local or state deals with you in a down right punitive way.

 

[xavier7995]

Just double checking, but if you buy a license from an existing op, you are still subject to that 2 year residency requirement right? Mostly thinking of a way you could partner up with an existing enterprise, kind of like a franchise type agreement.

 

[Texas Kid]

2 year residency is for ownership, so if you are going to be the owner of the existing license you are buying the 2 year rules is in effect.

If you buy and existing license and transfer ownership you have to start from scratch as far as plants go UNLESS you buy the entire company and treat the plants as an asett swap and then the warehouses can stay as they are

 

[jumpincactus]

I'm with Grit, its not really a grey area at all in Colorado. If you are buying an existing license or applying for a new one you will have to comply with local and state requirements which means you will have to apply with the state and be completely vetted criminally and financially before moving forward. The MED does not take call in appointments anymore, you have to send an email and they will take up to 30+ days to respond and usually around 2+ months for your first meeting with them. You will need everything in place prior to that meeting..location, lease, build out, state and local license fees, local approvals, etc...all has to be done before you even start the process with the MED. Just did a rec OPC transfer and it was over 180 days just to transfer the license with the state. So if you do not get a license it doesn't matter you still have to spend all the time and money first before you even know. Depending on local Business and Excise tax requirements there will be fees and filing requirements associated with that and can be anywhere from $2500-$10,000 and then your local zoning and specific use approval also has to be approved. Built out spaces that are zoned correctly and ready to go can sell for $150-$160 bucks per square foot and rent for $45-$55 a square foot so get ready for a little pain there. If you are looking for what they call a "vanilla box" or open shell to lease, it can be anywhere from $12-$18 bucks a sq.ft. to rent a small space and them another $75-$100 a sq.ft. to buildout with partition walls, HVAC, electrical, and plumbing..all of which must be permitted, inspected, and CO'd. Storage building grows are considered collective grows and those are not allowed very many places anymore. It is probably easier to find a 10,000+ sq.ft. place that zones correctly than a a 1000sq.ft. spot because your going to need an F1 occupancy building with an Industrial or light industrial zoning suitable for plant husbandry..not that they are not out there but small facilities are usually not zone for heavy or light industrial uses. Water becomes a serious issue as well, especially if there are alot local rules and regs for use and disposal and in drought hit areas farmers and cattle boys can be real big hurdles to getting grows approved. All in all your probably looking at close to $50,000 in state requirements and fees, $20-50,000 in attorney fees, and another $150-$200,000 in building leases and buildout for 1000sq.ft. All doable for sure but you have to be ready for the expenses as soon as they come up and then be ready to wait at least year or so before you see the first dollar in revenue so you are self financing the operation out of pocket on top of all the start up expenses.

As a real world example, I am working on a 4800sq.ft. spot that the guy wants $750,000 for the building with 600 amps of power, I will have another $500-600,000 in build out expense to get it just the way I want it and even moving 2 existing licenses (one for the store and one for the grow) I already own it will be 6-8 months fighting with the state to get it all approved and green lighted to operate and then another 120-160 days before I can see the first dollar in revenue and for the first 120 or so days I will have to buy product from myself at another one of my grow ops at fair market price just to have product on the shelf until the grow starts to product.

There is alot of wholesale out there for $1200-$1600 and very few buyers out there for product at $2000-$2200 and the smaller your grow op is the more cost per unit you are going to have to cover. 30-60 light operations have a hard time competing with 1000-5000 light operations, the economy of scale gets really real, really fast..

Again all doable though, just not for the faint at heart or underfunded

Very nice TK. You really spelled it all out . You certainly know your stuff.

 

[xavier7995]

Thanks for the info TK, always appreciated. That is how it seemed, but well, was hoping I was wrong. Shoulda figured that the loophole wouldn't be *that* obvious. Buying your way in does seem like the way to go though, a bit pricey, but faster and more straightforward. Well, a bit over a year till I can seriously go for it on that front. Plenty of time for planning and to track down a very good attorney on all this.

 

[kuz]

I think they changed the rules to make it easier for out of state investors, but they have not implemented the new rules. I am just watching from the side lines though, not in the loop.

 

[muir]

Had heard that too but haven't ever tried to verify it.

I think they changed the rules to make it easier for out of state investors, but they have not implemented the new rules. I am just watching from the side lines though, not in the loop.

 

[Texas Kid]

They relaxed the residency a little on pure investment participation but capped the percentage amount you can participate

 

[xavier7995]

Would you happen to have a link to an official comment on that? Would be interested in reading up on the nitty gritty.

 

[kuz]

http://www.leg.state.co.us/clics/cl...198560ABC587257E260050DF1C/$FILE/1379_rer.pdf

I read it but dont have the patience to really figure out what it means. lol. If I had some serious out of state investor it might be worth understanding more.

 

[xavier7995]

http://www.leg.state.co.us/clics/cl...198560ABC587257E260050DF1C/$FILE/1379_rer.pdf

I read it but dont have the patience to really figure out what it means. lol. If I had some serious out of state investor it might be worth understanding more.

Thanks man, I am looking forward to some legalese.

 

[xavier7995]

http://www.leg.state.co.us/clics/cl...198560ABC587257E260050DF1C/$FILE/1379_rer.pdf

I read it but dont have the patience to really figure out what it means. lol. If I had some serious out of state investor it might be worth understanding more.

Well, not a big help to me at the moment, but it does work towards making it easier for out of state money to be used. Good and bad on that. I like to think that it would help make it easier for your grandma to give you some cash for your "reefer madness dope growing to help glaucoma" but we all know it will just pave the way for VC's.

 

[RollTide420]

$4000 lbs, ya maybe its time to move out of Colorado. Whats up in Texas, I heard some rumors something could happen there?

I have been going back and forth about this since we legalized. I know it wont be easy. I heard of a big grow south of here, they spent $1,000,000 just on the electric. I dont see how but I heard it from the electrician.

I expected this thread to become about what I cant or shouldnt do but I put it out there anyway, hoping someone might know of some grow space somewhere being leased out on a smaller scale than the ones I am aware of.

I wrote a detailed business plan. That was to try and find someone to invest 1 million. Without that money, i'm thinking something like 30 pounds a month, 5000 sq ft, 60-80 lights for bloom, if i find the right location to lease with the right building, I think I could make that work, even if I had to start off with about half that many lights. I actually found the perfect location, the owners were going to carry the loan, I got them all excited about a grow, now they want cash so they can move out of state, and they are going to market the property as a grow op. its been for sale for years.

Cost to grow the bud $400 a pound, worst case wholesale price $1000 pound. I've heard numbers all over the place but thats what I'm going with. I dont expect to sell anything for 9 months.

This aint about getting rich and competing with marlboro, yes i expect to make a profit, but i wouldnt go through all this for money. Build out a basement and grow 100 pounds a year, so much less headache. The game of stacking medical cards is over, for me anyway. Start popping a bunch of seeds and the numbers get up into the 100's before you know it.

Two guys from kentucky pull up to the coffee shop in a uhaul they go inside and one of them blurts out to everybody "were here from kentucky, and we moved to colorado to get into the marijuana growing business". lol. I do have somewhat of a clue what I am getting into.

I'm looking to invest in a wholesale grow op