Indie Growers Association Subsidiary Signs LOI to Sublease Land to Cannabis Grower

Indie Growers Association Subsidiary Signs LOI to Sublease Land to Cannabis Grower

By: Tomas Ronolski - News

Wednesday, October 1, 2014

The marijuana industry has been relatively quiet in recent months after sharp run ups in countless pot plays at the start of the year on the back of changes in legislation in several states to legalize cannabis in one way or another. Part of the calm has been underscored by the Securities and Exchange Commission launching investigations and halting trading on several stocks in the marijuana sector. Further, the SEC issued an investor alert exhorting caution due to possible scams involving marijuana-related investments. Since edging just over 1,000 in March, the 420 Marijuana Index has fallen about 75 percent to 235 currently. Indie Growers Association (OTCQB:UPOT), which is not a member of the index, has languished alongside its pot brethren since late in March. The company skyrocketed in the first quarter from around 25 cents per share to a high of $32.40, a mind-numbing gain of 12,860 percent, but has felt a cataclysmic fall since that time heading back down to around 51 cents through Tuesday’s close. Technically speaking, the chart seems to have found a support at 50 cents.

Based in Washington, one of only two states where both medical and recreational marijuana are legal, Indie Growers is focused on the real estate opportunities available in the marijuana industry. The company invests in agricultural, light industrial and commercial properties that are suited for licensed industry players (i.e. growers, suppliers, distributors) and designs and manufactures state-of-the-art cannabis production facilities through an in-house construction team.

In its land portfolio, Indie Growers, through its subsidiary River Ridge Sunshine Farms, holds a 10-year renewable lease on a 14 parcel agricultural property in Prosser, Washington and says on its website that it plans to add to its holdings “in the up and coming states legalizing” cannabis. Currently 23 states and the District of Columbia have legalized cannabis under varying guidelines, with legislation pending in Florida, Ohio, North Carolina and Pennsylvania.

One of the 14 parcels has already been subleased to the licensed medical marijuana grower Cannabliss Organic Gardens, who is awaiting its Tier 3 license. Tier 3 licenses allow large-scale cannabis growers to produce between 10,000 square feet and 21,000 square feet of dedicated plant canopy. Indie Growers projects that, at $9.52 per square foot, it will generate about $200,000 per month in revenue from its tenants with Tier 3 licenses.

The company said on Wednesday that River Ridge has penned a Letter of Intent with Hydro Pro, a private Washington grower, to sublease one of the remaining parcels of land. Per the deal, which needs to be followed with a definitive agreement, Hydro Pro will sublease the parcel under a 10-year renewable lease of farmland and supporting infrastructure from River Ridge at $9.52 per square foot of garden canopy per month. The proposed lease will consist of fenced land with private gated access, approximately 1,500 square feet of warehouse space, 21,000 square feet of garden canopy, and a security camera system.

Indie Grower’s business model is still in its infancy, but if the revenues come to fruition, the company would certainly be getting off on the right foot with $400,000 in monthly revenue, or $4.8 million in annual revenue from two parcels. Volume in early trading on Wednesday is light, with only 22,000 shares changing hands, but the stock price is up 17.6 percent at 60 cents.

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