Calif. town may be going to pot: Cannabis firm trying to create marijuana mecca

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American Green, a cannabis investment firm, has made an offer to buy a small town in the Mojave Desert.

NIPTON, Calif. — A cannabis investment firm is moving to buy a tiny town in the Mojave Desert outside Las Vegas, imagining a self-sustaining marijuana mecca where public pot smoking is welcome and entrepreneurs face fewer regulations.

The buyer, Arizona-based American Green, said it has made a binding offer to purchase the 80-acre town of Nipton and 40 acres nearby for $5 million. The town includes a hotel, trading post and RV park. American Green also is negotiating to buy a solar array that provides about half of Nipton’s power.

A geologist who once prospected the area assembled all the land under his ownership in the early 1980s. His widow and the current owner, Roxanne Lang, listed the town for sale last year.

“The town is the medium,” said Stephen Shearin, who is managing the project for American Green. “It becomes an icon. This is a legitimate effort to do something significant in this arena. It’s an idea whose time has come.”

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Shearin said he hopes Nipton can be a model for other small towns across America by spurring the creation of made-in-the-USA jobs and industry.

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Residents have wondered what the future holds since Nipton went on the market. Recent transplant Carl Cavaness estimates the permanent population at 18 or 19 people. A few weeks ago, Cavaness said, he and his wife were wondering whether marijuana could bring some much-needed traffic here.

“We get a lot of traffic through here that doesn’t stop,” Cavaness said.

California and Nevada both legalized recreational use of marijuana in 2016 — although it’s still illegal to carry the drug across state lines. That means Nevadans couldn’t come to Nipton, buy marijuana and take it home, but Californians could.

Dispensaries are booming in nearby Las Vegas, and California aims to have its marijuana stores running next year. 

Interstate 15, which is 20 miles northwest of Nipton, is the primary route from Los Angeles to Las Vegas. A red asphalt two-lane road through scrub brush links Nipton to the interstate and the Colorado River, and trains pass almost every hour along railroad tracks at the edge of town.

Today, Nipton’s businesses include a general store, an RV park and a five-room hotel, where the Cavanesses work. If the sale closes, American Green expects it will take about two years to update the businesses to cater to cannabis enthusiasts.

American Green is a publicly traded cannabis company best known for its ID- and age-verifying marijuana vending machines. It also sells non-psychoactive CBD products like mints, body balm and dog treats.

Shearin said the company has made a $200,000 down payment and is testing Nipton’s water as part of its due diligence. If all goes well, it will pay an additional $1.8 million in cash and take possession of the property.

Beyond the $5 million sale price, the company expects to invest up to $2.5 million more to improve the town’s infrastructure and expand the solar plant to offset the energy demands of marijuana production, Shearin said.

Broker Tony Castignano of Sky Mesa Realty said American Green is a “serious prospective buyer” but cautioned that the property hasn’t yet been sold.

In Nipton, the company plans to bottle CBD-infused water drawn from a nearby aquifer. CBD is a marijuana derivative lacking the compounds that give users a “high,” and CBD products are legal to sell in most states. Ultimately, the company said it wants to offer attractions ranging from CBD and mineral baths to cannabis stores, artists-in-residence programs and culinary events.

Nipton will be required to follow California’s marijuana rules, but Shearin hopes it will provide more flexible, business-friendly local regulations.

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For example, company officials said even in states with legal marijuana, many police departments continue to pursue marijuana crime, and thus suppress cannabis use. They want Nipton to be different.

“If you’re outside on your porch, you will not have to worry about the local constabulary swinging by to give you a ticket,” Shearin said. “It will be cannabis-friendly first, but there will be appropriate policies in place.”

Marijuana remains illegal at the federal level, and uncertainty over how President Trump’s administration will handle state-legal pot has scared off some investors. But entrepreneurs willing to make bold moves — like buying an entire town — are jockeying for position.

“One thing we commonly hear from cannabis investors is that, even if the Trump administration were to intervene in the industry, it would be short-lived due to the broad-based public support for cannabis legalization,” said John Kagia, the executive vice president of cannabis analytics firm New Frontier Data.

Many cannabis stores already are starting to move beyond storefronts. Ken Nisch, chairman of Detroit-area retail design firm JGA, has been working with Colorado-based dispensary company The Clinic to mimic the farm-to-table approach that many natural grocers have adopted.

“Short of making this consumer connection, cannabis stores will live in the retail purgatory, with little uniqueness differentiating one from the other,” he said.

Shearin said that’s precisely what American Green hopes to do with Nipton: make it a unique destination for everyone, from casual users to people who want to immerse themselves in the growing and production culture.

In Nipton on Wednesday, two motorcyclists from Nevada sat on railroad ties, talking about what might become of the Whistlestop Café next door, the town’s only restaurant, which closed in June.

“There’s been a couple of businesses here that try to make it, they just haven’t been able,” said Walt Mackin, gesturing to the boarded-up café. “You can see Nipton’s been hurting economically. (Marijuana) could be a boom.”

Murphy reported from Nipton. Hughes reported from Denver.

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