A cannabis company buys a California ghost town: Is it a legitimate investment in the town, a publicity stunt to boost stocks prices or some combination of the two?
Until last week, Nipton, California (population: somewhere between 15 and 20, depending on who you ask) was a handful of buildings perched on eighty dusty acres — between the low-rent, last chance casinos of Las Vegas, Nevada’s far fringes and the vast expanse of the Mojave Desert. If it was known for anything (and it wasn’t) it was for being the nearest outpost where Nevada residents could buy California lottery tickets.
Now? The former mining town is internationally famous for being the first — and, so far, only — settlement to be purchased outright by a cannabis company.
In early August, American Green — a publicly traded firm based in Arizona that deals in marijuana vending machines — announced its purchase of Nipton from its private owners in a deal estimated at $2 million.
It was a field day for the lamest puns the press could pen, and it also raised a vital conundrum: What do you do with an old mining town — strike that. What does a cannabis company do with an old mining town in the middle of the desert, that’s currently most popular with bikers and Hollywood location scouts seeking desiccated and decayed “Old West” settings?
According to American Green, the plan is for Nipton to become a “pot paradise” — a sort of international cannabis tourist destination, complete with a “pot-friendly bed and breakfast” and other amenities, ostensibly alluring enough to convince tourists to leave the bright lights and air conditioning of Las Vegas and enter the harsh, unforgiving desert.
That will take plenty of time, money, vision — and boring old land-use lawyers.
Currently, commercial cannabis activities are banned in unincorporated San Bernardino County, where the town is located. Nipton will have to become a bona-fide incorporated town, and then will have to pass its own marijuana-friendly laws.
Until then, the town’s water supply and its convenient location — three hours’ drive from Los Angeles and one hour from Las Vegas — make it an ideal spot to start bottling and distributing CBD-infused water, according to a CNN report.
As per the Desert Sun, American Green plunked down $200,000 for a down payment, and if final due diligence inspections go well (there are water rights and other details to be smoothed out), the company will pay out another $1.8 million in cash before taking title to Nipton and all it entails: An adobe-walled hotel built in 1910, a trading post, a schoolhouse, some eco-friendly cabins and an RV park.
For now (until the deal closes escrow) Nipton is the property of Roxanne Lang, whose late husband — a geologist and amateur gold miner named Gerald Freeman — bought the property in the 1980s. The couple lived there for a time, and after relocating to a planned community near Las Vegas, continued making improvements: There’s a solar-power array generating 80 kilowatt hours of electricity.
Lang first listed the property for $5 million last year, so in a way, American Green is scoring quite the deal.
News of the sale introduced Nipton to much of the world, and ditto for its purchaser. If you hadn’t heard of American Green before this shock announcement, it just means you’re a normal person — not a penny-stock shark.
Founded sometime in 2009, according to its founders, American Green is the “second-oldest publicly traded” cannabis-related company in the U.S. This doesn’t necessarily put the firm in esteemed company: Another publicly traded firm that also dealt in marijuana vending machines is, according to the federal Securities and Exchange Commission, both the first billion-dollar unicorn in the marijuana world and its first massive fraud.
Nonetheless, the move’s been profitable for anyone holding six figures’-worth of American Green Shares: After news of the sale appeared in national and international media, stock in the company more than tripled in value — from $0.0012 a share to $0.0045 cents a share. Then things cooled; stock is trading at $0.0022 cents as of August 10, but the pop was strong enough for someone to make some money.
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