NY Grow License

So one of the companies I co-founded under Fusion Holding Group received our New York conditional rec grow license in our 31k sq ft greenhouse complex, 1 hr northwest of NYC. I am looking to sell my shares, 50% in total. Now takingIMG_1285
all offers. Turn key operation with GMP manufacturing, stores, vending machines. dm or shoot an email adam@fusioncbd.com

Wondering what a good valuation would be. Thoughts?

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Have any EBITA statements for previous quarters yet?

Hard to value a company without any financial figures to review.

I’d be interested, so would some of my clients. But we need EBITA statements.

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I need:

Management team.
Summary of business
Financials and projected financials
Business plan

What is the corporate structure and who is the parent company who would need to be reported too? Can we buy the parent company?

What’s your debt holding?

Also, why are you selling?

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Are you getting a conditional processing license as well?

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What county?

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I received my NY conditional adult use cultivation license as well.

Valuing these is difficult because these licenses are literally the first step in establishing the NY state adult use market. We don’t have any stores yet, we don’t have any processors yet. The applications for those licenses haven’t even gone live yet. The state anticipates that stores will be up and running some time this fall.
They allowed existing hemp licensees to apply for conditional adult use cultivation licenses starting two months ago so we would have a harvest ready to go this fall. You must have harvested CBD hemp for two of the last four years under your existing hemp license. The conditional adult use cultivation license is special because it allows the owner to self process and distribute flower products directly to retail stores for one year. You are not allowed to process into edibles or oils, you must sell your biomass to a processor for that. After june 1st 2023 you have to sell your trimmed flower crop to a distributor to then be sold to retail stores. The conditional cultivation license expires june 1st 2024 but if you are in good standing your license automatically converts into a full cultivation license. I do not off of the top of my head know the exact classes of adult use cultivation licenses that will be available but presumably they will allow for large scale farming. Its all outlined in the MRTA which is the law NYS passed last year that covers all of legalization and our adult use market.

the conditional cultivation license allows you to grow 1 acre of outdoor flowering canopy OR 25,000 flowering canopy sqft in “greenhouses” which can be as simple as plastic hoops OR a mix of 30,000 sqft total of outdoor and greenhouse with a 20,000 cap on greenhouse leaving you 10,000 sqft of outdoor. I personally applied for 10,000 sqft outdoor and 20,000 greenhouse. this canopy cap does not apply to propagation. You are limited to 20 lights TOTAL in your greenhouse(s) (i know, that doesn’t make sense). There is a caveat in the guidance that says if you have existing lights in your greenhouse you can use those but im not sure if that means you can go over the 20 light limit. You can amend your canopy at any time. meaning you could do 1 acre outdoor during the summer then switch to 25,000 sqft greenhouse for the winter. You are allowed to grow anywhere in the county you held your hemp license or an adjacent county. You are allowed to have up to 4 licenses on one property. When the license converts to a normal cultivation license in two years you can move it anywhere in the state. You can operate on multiple properties, you just can’t go over your canopy limit.

The person or entity that was awarded the conditional adult use cultivation license cannot transfer more than 51% ownership without prior approval from the board. A cultivation, distribution, or processing license holder may not hold any ownership interest in a retail, on site consumption, or delivery license. Cultivation license holders may apply for processing and distribution license when those become available but you’ll only be able to process and distribute what you grow with your own cultivation license. The only vertical integration allowed in the NYS market will be awarded to micro businesses, but those licenses have not become available yet and their exact specifics have not been proposed yet. The first processing licenses will also be conditional so you’ll only be able to get one if you owned a hemp processing license prior to the end of last year.

As far as valuation… I’ve already been offered $1,500 per pound of trimmed flower, $800 per pound of trim, and $4k per liter of produced distillate with 20% paid up front. I anticipate trimmed flower to be the most valuable product a conditional adult use cultivator can make especially since they get to self distribute to stores for the first year. You could gain market share with your own brand. You are not allowed to force retail outlets to stock only your products. No minimum shelf space contracts. I anticipate trimmed flower to wholesale to retail outlets between $2,000 to $4,000 a pound. In Michigan’s adult use market trimmed pounds are still wholesaling for $4,000 a pound and they have been selling adult use for 2.5 years but there are allegations of collusion and secret monopolies in that market.

So lets say you absolutely maximize canopy and do 1 full acre outdoor run in 2022 and 2 full acre runs outdoors with autos in the summer of 2023 at around 1,300 pounds of trimmed flower per run then switch to 25,000 sqft of green house for october to end of march both years. the 25,000 sqft greenies would produce roughly 800 pounds per run. So the absolute max you could grow with this conditional license before it converts to a full license would be 3 x 1,300 pound outdoor runs and 6 x 800 pound greenhouse runs for 8,700 pounds total. if pounds average $2,000 wholesale thats $17,400,000 over two years minus expenses.

This is how i would value my own license if i were to sell it… my conditional cultivation license currently covers my family farm that has 60 acres of very fertile fields, tons of natural springs, high water table, stream that runs through the middle of the property that almost never runs dry, and the entire property is sloped and south facing and we have a cow farm across the street to get manure from. And on top of that you can transfer this license to any property in the county or an adjacent county which means you could transfer it to pretty much anywhere in the middle of the state. And also consider you get to automatically convert it to a full cultivation license in two years that could presumably cover huge acreage, and also get your own distributor and processor licenses tacked onto it. also consider that the sate only anticipates licensing around 200 cultivators this year, they so far have only licensed 88. Also consider that new york had a very high percentage of localities “opt in” to retail sales and the state anticipates licensing at least 200 stores in the first year by fall. Also consider that New York is a state with 20 million people and it comprises the NYC market which is the most valuable cannabis market in the world and has the highest rate of per capita consumption in the world. When retail licenses become available on a wider scale thee will be stores on every corner in NYC just like liquor stores. NYC does not limit the number of liquor licenses it awards and they only cost $5,000. I anticipate NYC will treat cannabis retail licenses in a similar fashion.

On a presumed maximization of $17 million gross over a two year period I would want around $4 million for my license and full use of my property which already has drying barns and tractors and cultivators etc. AND I would reserve the right to renegotiate or take back my licnese when the license converts to a full cultivation license in two years. If you wanted the license outright without my ability to take it back in two years when it converts I would want $15 million and even then id probably want a reasonable royalty in perpetuity.

I am currently trying to find another adult use and/or hemp license holder in NY to partner with in my own or an adjacent county so we can grow together on their land if they have better infrastructure than me in in exchange for a percentage of my harvest. I don’t currently have any greenhouses on my property but i do have a leveled pad and 240 electrical box already installed. I would rather not shell out tens if not hundreds of thousands of dollars to build 25,000 sqft of climate controlled greenhouse this year.

If anyone reading this is in the middle of the state and are one of the 88 farms awarded a conditional cultivation license or you hold a hemp license or if you just have 25,000 sqft of greenhouse or less that you’d like to grow some cannabis in please message me. Also would be interested if you have secure fields and manpower to harvest 1 acre of outdoor cannabis. Message me and let’s make a deal. Make sure you tell me what county you’re in.

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We have not grown for MJ in this space. It was previously used to grow hemp flower and starts in 2018-2020 so no financials.

Orange

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This type of license allows for trimming and packaging flower, pre rolls and maybe rosin press material. Also distribution and wholesale of what is produced on site.

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31 sf ain’t gonna yield much bud.

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Still available?

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Interested as well…

Dm me value you are thinking. Let’s chat.

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Still interested. Please send info via DM about price you are thinking of etc

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Nice facility. I own one of the 15 manufacturers. Maybe we can do some business?

NY is proceeding sllloooooowly

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lol it’s going great in NY

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