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255
Price : 750,000
Listing Type : Investment Opportunities
Status : ACTIVE
Size : 33 1/3% interest
Medical or Recreational : Both
Sale Type : Cash, Joint Venture
Utilities : Water, Electricity, Gas, Sewer, Natural Gas
Company Name : Bottle Rock Herb Medicine
Phone : 707 3376583

84 acres RL

We are looking for a partner for  a greenhouse and or outdoor cannabis cultivation business  

     First section of this  email is an investment proposal for a partner for an indoor cannabis cultivation business.                                                 The second section of this email is an investment proposal for a partner for an outdoor cannabis cultivation business. 
 
We are looking for a partner for a greenhouse cannabis cultivation business

 

Overview  

 
Bottle Rock Herbal Medicine,LLC is seeking an investor for the development of 88,000 square feet of cannabis cultivation, in greenhouses, in Lake County, California, for next seven years. The company may continue its operations for seven years thereafter upon further agreement of the parties.
 
Bottle Rock Herbal Medicine, LLC, intends to develop, on multiple, nearly adjacent parcels of land, 88,000 square feet of greenhouse cannabis, producing an annual recurring net income of $21,096,194.00 after the first two years of start-up costs.
 
Please see attached financial projections. The cultivation of cannabis is currently, for example, a much better agricultural investment, producing a much larger gross revenue, than that produced by one acre of Cabernet grapes.  In 2019, the average gross revenue in one acre of Cabernet grapes in Napa Valley was $23,192.00.   The per-acre annual gross revenue in one acre of greenhouse cannabis that same year was $16,830,000.00.
 
Lake County cannabis major use permits are valid for 10 years.  At a time when this industry remains small, but growing, investment in its evolving and expansive future is a commercial business opportunity that offers a unique advantage to investors.   
 

What is required to obtain a cultivation permit in Lake County, California

 

Lake County commercial cannabis cultivation regulations (ordinance No. 3084. 05/21/2019 allow property owners the ability to grow one acre outside or 22,000 square feet inside of cannabis for every 20 acres.  Lake County also requires a home on each site where the cannabis is grown.

 
Both the “larger ranch” and “smaller ranch” contain residences that comply with this county requirement, and both ranches qualify for cultivation permits.  Lake County offers an early activation permit process for growing cannabis, so cultivation can start this summer.
 
Bottle Rock Herbal Medicine, LLC, will be concluding the permitting process to grow cannabis on the property within the next few months.  Bottle Rock Herbal Medicine, LLC, as the applicant for the Lake County permit process, has already completed the county requirements for the “larger ranch”. This effort included a pre-application conference; an archaeological review; a biological review; a water board discharge permit, and the required fish and game paperwork. 
 
Bottle Rock Herbal Medicine, LLC, et al. will build one 22,000 square foot greenhouse by the summer of 2020.  Every 22,000 square feet of greenhouse should yield 6,600 pounds of cannabis flower per year. At a wholesale price of $1,400.00 per pound, this provides an exciting investment opportunity.  (See websites listed below for documentation.)
 

 

 

Project description:  Bottle Rock Herbal Medicine, LLC

 
Bottle Rock Herbal Medicine, LLC, is geared to produce premium organic, highly potent cannabis flower for the state-licensed cannabis marketplace.
 

Structure

 
Bottle Rock Herbal Medicine, LLC, will hire Charles Ewing to oversee the day-to-day operations of the cannabis cultivation business.  Our horticultural expert, Glen Bauer, has 25 years of experience in the horticultural field.  The crop management company that will be retained to undertake the preparation, maintenance, harvesting, and curing of the cannabis has 50 combined years of cannabis cultivation experience.
 

Return

 
There are two ways for a partner-investor to be a part of this cannabis business.  One option would be for one partner to invest 50%; alternatively, two partners could invest 25% each.  
 

Option one:  50% interest. 

 
A single partner-investor would fund the development of the commercial cannabis farm, as well as investing an initial $1,550,000.00, in exchange for a 50% interest in the Bottle Rock Herbal Medicine, LLC, business by partnering with our business on three parcels of land in Lake County, California, for 7 years, with an option to continue the partnership for another 7 years.
 
For the first year, the investor will receive all his/her initial investment capital back, plus 65% of the net income. There will be an additional cost to the investor of $1,902,272.00 in the first year to develop the cultivation facility and to grow three crops of cannabis in one 22,000 square feet greenhouse. The first-year net revenue is projected to be $3,017,042.00.
 
In the second year, it is projected that the investor should receive all capital back, plus 65% of the net income.
If the investor chooses to expand cultivation space, there will be an additional cost of $5,706,816.00 in the second year to develop an additional 66,000 square feet of greenhouse, the cannabis cultivation of three crops in those greenhouses, plus fencing, professional services, labor, insurance, permits, equipment, and power.  The net revenue for an expanded greenhouse network is projected to be $18,975,174.00.
 

By the third year, no further development will be needed, just yearly recurring production costs, which will be equally shared by the partners.  Third-year net revenue is projected to be $21,096,192.00, which will be shared as per partnership interest.                                    (Please see financial projections, below for 22,000 square feet of greenhouse.)

 
The business plan calls for the development of one 22,000 square foot mixed light greenhouse in the first year, expanding the year thereafter by an additional 66,000 square feet of greenhouse area until 88,000 square feet is under cultivation. The investor will also fund the development of the greenhouses. In return for his or her investment, the partner will receive an ownership interest comprised of a 50% interest in the business and development of 88,000 square feet of greenhouse cannabis production for 7 years, plus an option for an additional 7 years. For the first two years, the investor will receive 65% of the net income in exchange for funding the start-up costs for the business.
 

Option two: Minority Interests

 
 Should investors prefer a minority interest, we can negotiate alternative percentage arrangements.
 

Property

 
Project location:  Three properties located on Bottle Rock Road, Cobb Mountain, California. These pristine properties contain 83.8 acres of meadows, hills, creeks, and ponds. 
 
The “smaller ranch” consists of 22 acres and has a residence on the property, a statutory requirement for a growing permit.  This property also features a pond, Carter Creek, and several small and is eligible for a 22,000 square foot greenhouse.
 
The “larger ranch” consists of two parcels, totaling 61.8 acres, and includes a residence. A secluded estate with a double-gated entrance, this beautiful property offers plenty of employee housing, as well as a full-service 2,310 square foot commercial kitchen. This property also includes a one-acre pond, a well that produces 5.5 gallons per minute, riparian rights, and two 5,500-gallon water storage tanks. 
(See photographs below)
 

Revenue

 
There is much more price transparency in the cannabis market today than at any time in the past.  Currently, indoor-grown cannabis sells for as high as $2,000.00 per pound, but the figure of $1,400.00 per pound, as is reflected in our financial budget, is a more conservative estimate.e.  Bottle Rock Herb Medicine, LLC, et al, elected to use a conservative estimate in its financial projections to lower financial expectations to reduce the possibility of financial disappointment should cannabis prices fluctuate from current industry projections.  This approach would also lead to celebration and employee bonuses if the price of cannabis reaches $2,000.00 per pound, a 42% increase in revenue from the original conservative financial projections.
 
Naturally, cannabis prices vary by season, as well as in response to supply flow and consumer demand. The demand for greenhouse cannabis flower is much greater than for sun-grown cannabis. The benefit of greenhouse cannabis is the ability to control the environment by infusing CO2.  CO2 increases THC levels, which is the main psychoactive compound in cannabis that gives the high sensation.  Also, a more organic cannabis flower is produced in a greenhouse, and indoor growing allows for increased control of environmental factors, thus yielding greater price and less unpredictability in crop yield.  Enhancing potency in the cannabis flower allows for a resulting increase in retail price, as well as enhanced consumer demand.
 
There is a large market for cannabis flower and cannabis trim within the state of California.  In fact, by 2022, Marketnewsupdates.com projects the global cannabis market to be worth as much as $32 billion, a three-fold increase in just five years.  United States production is anticipated to fuel much of that growth, with an expected market value of $23.3 billion.  The largest group of cannabis buyers is predicted to be in North America:  Forbes projects it is increasing from $9.2 billion in 2017 to $47.3 billion a decade later.
 
For the top 10 trends in cannabis for 2019, see:
 

https://bdsanalytics.com/top-10-trends-in-cannabis-for-2019/

 
For the latest cannabis market news updates, see:
 

https://www.prnewswire.com/news-releases/california-cannabis-market-expected-to-reach-51-billion-market-value-685917412.html

 
For cannabis projections for California, see:
 

https://www.forbes.com/sites/irisdorbian/2019/08/15/california-is-worlds-biggest-legal-pot-market-says-new-report/#161e9d954cd7

 
Lake County Cannabis Alliance includes distributors and manufacturers as members of the alliance. Bottle Rock Herbal Medicine, LLC, is also a member in good standing of the alliance. Bottle Rock Herbal Medicine, LLC, has selected a manufacturer to buy the cannabis trim, as well as a distributor to dispense the flower from the Lake County Cannabis Alliance.
 

Investment

 

The internal rate of return (IRR) for this project for the entire indoor grow is 270%. This factors in an initial investment of $3,000,000.00 to develop indoor growing facilities .  If I cut the total expenses in half for the investor/partner, then the IRR becomes  140%

 

Risks  

 
The investor-partner should understand that there are certain risks that are assumed in investments in operations such as these.  Among them:  considerations of security, potential crop damage from operational errors, and power outages,  The banking industry is still working out how to deal with how to handle accounts for businesses legal in their own states, but not yet recognized by the federal government.  2020 is the first-year start-up for Bottle Rock Herbal Medicine, LLC.
 

How We Plan to Mitigate the Risks

 
Bottle Rock Herbal Medicine, LLC, et al., will feature
 
  • Two gas generators for back-up power, if needed.
  • An experienced grower-caretaker living on the premises, seven nights per week.
  • Greenhouses surrounded by secure fencing.
  • Security system will be installed by Zions Security Alarms, a company with an A+ rating with the Better Business Bureau.
  • Efficiency of the security system will be verified by the Lake County Sheriff’s Department before operations begin.
  • Charles J. Ewing will oversee the day-to-day operations of the cannabis cultivation business.
  • The managers will be able to monitor operations through their cell phones, ensuring continuity of cultivation and harvesting practices.
  • Ladybugs and praying mantis will be introduced into the cultivation areas. These beneficial bugs help create a more organic cannabis product by decreasing the need for insecticides.
  • The budget reflects costs for a professional crop management company and a horticultural expert to oversee the preparation, maintenance, harvesting, and curing of the cannabis.
  • The properties have access to several legal water sources. The properties also have ponds for back-up water storage.
  • Background checks on all employees and persons who are involved in the business.
 
 
I am looking forward to hearing from you.  Should you wish to discuss specifics, I am available to meet with you at any time that is mutually convenient.  I wish to thank you in advance for your consideration and interest.
 
Sincerely,
 

Joleen P. Wignall

Starting Date: 2020            
 Per 22,000 sq. ft. green house            
 1 year  totals ( with 3 grows per year)            
  Cost Per Unit # of units Total One time Startup Yearly recurring  
Income            
Production of product on an average of 6600 lbs cannabis per year in 22,000 sq. ft green house $1,400.00 6600 $9,240,000.00      
Production of product on an average of 2200 lbs trim  per 22,000 sq. ft. green house $50.00 2200 $110,000.00      
             
    Total $9,350,000.00      
             
Expense            
2200 plants in 65 gallon containers, 10 ft spacing  in 22000 sq. ft. of green house            
Increase in THC in greenhouse with Co2 generator! 20% – 25%            
Green house with accessories- Mega green house store in Sacramento $500,000.00 1 $500,000.00 $500,000.00    
financing available @ 6% for 7 years  with some companies.            
Cost of plants (based on 22,000  sq.foot  green house with 3 grows/year) $10.00 6600 $66,000.00   $66,000.00  
Soil (0.310  yards soil per plant) $43.33 2200 $95,326.00 $95,326.00    
65 gallon bags  $10.91 2200 $24,002.00 $24,002.00    
Co2 generator $1,300.00 2 $2,600.00 $2,600.00    
Fence ‘ (30,000 sq. )            
  Gates:  48″ wide and 6′ high $100.00 2 $200.00 $200.00    
  (1) 10′ x 5′ gate  $289.99 1 $289.99 $289.99    
  3 heavy duty pipes for gates $370.00 3 $1,110.00 $1,110.00    
  Cement 1.1/2 bags per pipe hole @ $3.00 per bag $3.00 162 $486.00 $486.00    
200 ft  of covert to channel water to pond $20.00 200   $4,000.00    
6 foot cyclone  fencing with top rail, price per foot. approx. $1.40 500 $700.00 $700.00    
top rail  for the cyclone fence per code. $1.33 500 $665.00 $665.00    
8 ft.  post for cyclone fence  $13.29 50 $664.50 $664.50    
shade cloth for fence @$ 4.50/ft $4.50 500 $2,250.00 $2,250.00    
             
      Totals $529,122.00 $66,000.00  
Misc.            
Electrician and permits for pump house and booster pump and green house $5,000.00 1 $5,000.00 $5,000.00    
2200 one gallon containers $0.50 1122 $561.00 $561.00    
Paper suits and hair nets for 6 employees ($5.36/person/day for 365 days) $32.00 365 $11,680.00   $11,680.00  
2500  gallons water tank $996.00 4 $3,984.00 $3,984.00    
Booster pump  $800.00 1 $800.00 $800.00    
Netting @ $1 per foot  $1.00 6000 $6,000.00 $6,000.00    
Fertilizer and pest control/plant $90.00 3366 $302,940.00   $302,940.00  
Drip/irrigation system      $2,500.00 $2,500.00    
Fertilizer injector     $500.00 $500.00    
Drip repair     $500.00 $500.00    
Gravel for roads to comply with 20 ft. wide roads to grow site  $750.00 20 $15,000.00 $15,000.00    
2″ of gravel for 22000 sq. feet of greenhouse. $39.47 135.8 $5,360.00 $5,360.00    
Plus sales tax 9.25% of total product bought       $52,662.75 $35,207.35  
2  Modine heaters to heat greenhouse $3,900.00 2 $7,800.00 $7,800.00    
      Totals $100,667.75 $349,827.35  
             
Permits         ,  
Land studies $3,200.00 1 $3,200.00 $3,200.00    
Lake county early activation fee $9,000.00 1 $9,000.00      
Lake county annual fee is $2/ft  $44,000.00 1 $44,000.00   $44,000.00  
Water Board $1,000.00 1 $1,000.00   $1,000.00  
Fish and game permit $600.00 1 $600.00   $600.00  
surety bond $500.00 1 $500.00   $500.00  
Fish and game permit  no. 2 $4,000.00 1 $4,000.00 $4,000.00    
      Totals $7,200.00 $46,100.00  
             
             
             
property tax & insurance            
Insurance-liability (estimate)         $18,000.00  
Property tax         $5,900.00  
             
             
      Totals $0.00 $23,900.00  
             
             
Power            
 400  Amp service to pole to power up well,  green houses- and security cameras     $27,000.00 $27,000.00    
Build Pump house for well      $6,000.00 $6,000.00    
Electrical bills approx. –  housing employees and lights      $9,000.00   $9,000.00  
Security Wi-Fi 24/7 @ $673 per month     $8,076.00   $8,076.00  
Solar City /Tesla lease power @ $220 per month to cafeteria and cottage     $2,640.00   $2,640.00  
propane tanks to start seedlings etc     $5,880.00   $5,880.00  
Solar to front gate for security camera      $5,000.00 $5,000.00    
12 hours at 25 watts per square foot x 22.000 sq.feet @ .10 cents/1000 watts/hour (0.0001)            
550000 watts x 0.0001 x 12 = 660  ($55 dollars per hours) 3 grows/year- approx. $55/hour 4320 hrs $237,600.00    $237,600.00   
      Totals $38,000.00 $263,196.00  
             
             
Labor            
Employee criminal checks @ $170 per person for all employees $170.00 10 $1,700.00   $1,700.00  
Fence labor approx./acre     $10,000.00 $10,000.00    
Tractor with loader @ $60/hour $60.00 5 $300.00 $900.00    
 to blade the roads to 20 ft. wide pursuant to fire code     $1,200.00 $1,200.00    
Backhoe services to install covert $110.00 10 $1,100.00 $1,100.00    
Caretaker whom lives on premise- 12 months/year $4,000.00 12 $48,000.00   $48,000.00  
Labor $800/week/person (40 hrs. @ $20 / hr.) 2   workers $6,400.00 12 $76,800.00   $76,800.00  
Seedling labor – $4,000.00   $4,000.00   $4,000.00  
Work Comp Insurance estimate approx (11%)     $15,741.00 $1,452.00 $14,355.00  
             
      Totals $14,652.00 $144,855.00  
curing and processing            
Venting and doors for 4 cargo containers $2,000.00 4 $8,000.00 $8,000.00    
Electrician for metal building  to install lights and fans (approx) $2,000.00 1 $2,000.00 $2,000.00    
Permit for Cargo containers $779.00 4 $3,116.00 $3,116.00    
      Totals $13,116.00 $0.00  
             
Trimming             
Trimming machine $40,000.00  $40,000.00  $40,000.00     
Sales Tax on trimming machine @9.25%     $3,700.00  $3,700.00     
gloves and scissors $575.00        $575.00   
90% of cannabis trimmed with machine            
Price per pound is decreased            
Trimmers $200/day -independent contractors ($200/day x 66 days x 5 trimmers) $13,200.00  $66,000.00    $66,000.00   
We need 66 days @ 5 trimmers/day to trim 10% (660 lbs)            
 trimmers   2 pounds/person per day           
      Totals $43,700.00 $66,575.00  
Fees            
County application fee @ $9000       $9,000     
State application fee 
$4945/ year – Tier 2 mixed light
        $4,945.00  
State annual fee @ $44,517.         $44,517   
             
      Totals $9,000.00 $49,462.00  
             
             
Professional services            
Electrician for power  to cargo containers, green house and  grow site- for security system (approx)       $11,000     
Contract attorney       $9,000     
Real Estate attorney  property purchase agreement,        $5,000     
Civil engineer for site plan        $3,500     
Planning expert to review  paper work for county’s early activation program       $3,000     
Dig a approx. 300 foot well with 6 inch casing.       $23,000     
      Totals $54,500  $0   
Equipment            
solar pumps for well and pond $2,799.00 3   $8,397.00    
John Deer Mower (997S) lease @ $350 per month $350.00 12     $4,200.00  
1 all terrain vehicles @ $200/mo $200.00 10     $2,000.00  
All terrain insurance @ $200/mo. $200.00 12     $2,400.00  
security system for grow site, metal building,
cafeteria, cargo containers and gates with 17 cameras
$19,429.00 1   $19,429.00    
30′ x 80’x 15′ metal building for drying and curing on cement slab $81,600.00 1   $81,600.00    
      Totals $109,426.00 $8,600.00  
Post harvest tax            
trim testing and distributing is 12%         $13,200.00  
State cultivation taxes @ $9.25/oz for 6600 lbs (paid after harvest) Flower         $976,800.00  
State cultivation taxes @ 2.87 /oz for 2200 lbs  of  trim (paid after harvest) leaves         $101,024.00  
Distributor costs @ $100/lb $100.00 6600     $550,000.00   
(will test product)  testing fees approx. $17.80/lb 6600     $97,900.00  
BRHM LLC may decide to get  self distribution license             
      Totals   $1,738,924.00  
             
             
      Grand Totals (per 22,000  sq. ft Greenhouse ) $891,557.75 $2,757,439.35  
             
    Per GH Gross Income – first year    $5,701,002.90  
Head growers production cost @ 11% of gross Income     production cost (11%)   $627,110.32  
Charles Ewing- will over see day to day operations- of entire business@  9 % gross income.     production cost (9%)   $513,090.26  
             
    Per GH Net Income (with startup costs)   $4,560,802.32  
GH = a 22,000 sq. ft green house            
             
    Per GH Gross Income – recurring subsequent years    $6,592,560.65  
      production cost (11%)   $725,181.67  
      production cost (9%)   $593,330.46  
             
    Per GH Net Income    $5,274,048.52  
Footnotes:            
Bottle Rock Herbal Medicine, LLC.            
1.  Estimated pound production at 1 lb. / plant = 6600 lbs per/year in 22,000 sq. ft greenhouse.            
2. First year we will develop a 1 medium mixed light tier 2,         greenhouse. ( Apn. 011-039-37)            
3. Second year develop two additional 22,000 sq. feet of greenhouses with (Apn. 011-039-38 & 37)            
4. Second  year, also develop an additional 22,000 sq. feet of greenhouse at  (Apn  011-065-12)              
5.  Land owner has 3 parcels to develop. All parcels are almost adjacent to  each other .            
6. Investor will be required to purchase  50% interest in the business and  for the land use             
for an initial investment of $1,550,000.  This includes a total of  83.8 acres of land.            
7. In Lake County with every  20 acres we are allowed 1 acre of outside cannabis or 22,000 sq. ft. inside.            
8.The growing permit from the county expires in 10 years.            
             
 INSIDE CULTIVATION FINANCIAL                 PROJECTIONS ABOVE            
 

We are looking for a partner for a outside cannabis cultivation business

 

Overview  

 
Bottle Rock Herbal Medicine, LLC, is seeking a partner for the development of 5 acres of cannabis cultivation, in Lake County, California, for the next seven years. The company may continue its operations for seven years thereafter upon further agreement of the parties.
 
Bottle Rock Herbal Medicine, LLC, intends to develop, on multiple, nearly adjacent parcels of land, five acres of sun-grown cannabis, projected to produce annual recurring net income of $7,746,410.00 after the initial start-up costs.
 
Please see attached financial projections. The cultivation of cannabis is currently a much better agricultural investment, producing a much larger gross revenue, than that produced by, for example, one acre of Cabernet grapes.  In 2019, the average gross revenue in one acre of Cabernet grapes in Napa Valley was $23,192.00.   The per-acre annual gross revenue in one acre of sun-grown cannabis that same year was $3,600,000.00.
 
Lake County cannabis major use permits are valid for ten years.  At a time when this industry remains small, but growing, investment in its evolving and expansive future is a commercial business opportunity that offers a unique advantage to investors.   
 
 
 

What is required to obtain a cultivation permit in Lake County, California

 

Lake County commercial cannabis cultivation regulations (ord. No. 3084. 05/21/2019 allow property owners the ability to grow one acre outside plus 40,000 additional square feet for every 20 acres.  Lake County also requires a home on each site where the cannabis is grown.

 
Both the larger ranch and smaller ranch on Bottle Rock Herbal Medicine’s property contain residences that comply with this county requirement; both ranches qualify for cultivation permits.  Lake County offers an early activation permit process for growing cannabis.
 
Bottle Rock Herbal Medicine, LLC, will be concluding the permitting process to grow cannabis on the property within the next six months.  Bottle Rock Herbal Medicine, LLC, as the applicant for the Lake County permit process, has already completed the county requirements for the larger ranch. This effort included a pre-application conference; an archaeological review; a biological review; a water board discharge permit, and the required fish and game paperwork. 
 
Bottle Rock Herbal Medicine, LLC, et al. will develop five acres by the spring of 2022.  Every acre should yield 3,600 pounds of sun-grown cannabis flower per year.  At a wholesale price of $1,000.00 per pound, this provides an exciting investment opportunity.  (See websites listed below for documentation.)
 

 

 

Project description:  Bottle Rock Herbal Medicine, LLC

 
Bottle Rock Herbal Medicine, LLC, is geared to produce premium natural, aromatic cannabis flower for the state-licensed cannabis marketplace.
 

Structure

 
Bottle Rock Herbal Medicine, LLC, will hire Charles Ewing to oversee the day-to-day operations of the cannabis cultivation business.  Our horticultural expert, Glen Bauer, has 25 years of experience in the horticultural field.  The crop management company that will be retained to undertake the preparation, maintenance, harvesting, and curing of the cannabis has 50 combined years of cannabis cultivation experience.
 
The business plan calls for the development of two acres of outside cultivation during the first year, expanding the year thereafter by an additional three acres until five total acres are under cultivation.  The partner will fund the development of the cultivation.  In return for his or her investment, the partner will receive an ownership interest comprised of a 50% interest in the business and development of five acres of sun-grown cannabis production forfor 7 to 10  for seven years, plus an option for an additional seven years.
 
 
 

Return

 
There are two ways for a partner to be a part of this cannabis business.  One option would be for one partner to buy into a 50% interest; alternatively, two unrelated partners could invest at 25% each.  
 

Option one:  50% interest. 

 
A single partner would fund the development of the commercial cannabis farm, as well as investing an initial $1,550,000.00, in exchange for a 50% interest in the Bottle Rock Herbal Medicine, LLC, business, partnering on three parcels of land in Lake County, California, for seven years, with an option to continue the partnership for another seven  years.
 
In the first year, the estimated cost to develop the cultivation facility and two acres of sun-grown cannabis will be $2,347,646.00. The first-year net revenue with startup costs is projected to be $2,271,700.00.  The partner will receive 75% of the net income until all of his or her initial investment capital is recouped.
 
In the second year, Bottle Rock Herbal Medicine, LLC will expand by three additional acres of cannabis cultivation.  The projected cost of developing three more acres of sun-grown cannabis is $3,521,469.00, including fencing, professional services, labor, insurance, permits, equipment, and power.  The net revenue for an expanded cannabis network is projected to be $6,506,114.00.  Again, the partner will receive 75% of the net income until all of his or her initial investment capital is regained.  
 
By the third year, no further development is anticipated to be needed, just yearly recurring production costs. The partner will receive 75% of the net income until all of his or her initial investment capital is regained.  Third-year net revenue is projected to be $7,746,410.00.
 
By the fourth year, the partner should have regained all of his or her initial investment capital. If for any reason this was not accomplished, then, the partner will receive 75% of the net income until all of his or her initial investment capital is recouped.  Thereafter, the net revenue will be shared as per partnership interest.  (Please see financial projections, attached, for one acre of sun-grown cannabis.)
 

Option two: Minority Interests

 
 Should investors prefer a minority interest, we can negotiate alternative percentage arrangements.
 

Property

 
Project location:  three properties located on Bottle Rock Road, Cobb Mountain, California.  These pristine properties contain 83.8 acres of meadows, hills, creeks, and ponds.  Lake County’s air has been rated cleanest in the nation by the American Lung Association for the last four years, rendering it a perfect site for outdoor organic agricultural production.
 
The smaller ranch consists of 22 acres and has a residence on the property, a statutory requirement for a growing permit.  This property also features a pond, Carter Creek, and several small wells, and is eligible for a 42,000 square feet of cannabis cultivation.
 
The larger ranch consists of two parcels, totaling 61.8 acres, and includes a residence. A secluded estate with a double-gated entrance, this beautiful property offers plenty of employee housing, as well as a full-service 2,310 square foot commercial kitchen. This property also contains a one-acre pond, a well that produces 5.5 gallons per minute, riparian rights, and two 5,500-gallon water storage tanks.  (See attached photographs.)
 

Revenue

 
There is much more price transparency in the cannabis market today than at any time in the past.  Currently, Lake County sun-grown cannabis sells for as high as $1,300.00 per pound, but the figure of $1,000.00 per pound, reflected in our financial budget, is a more conservative estimate.e.  Bottle Rock Herb Medicine, LLC, et al. elected to use a conservative estimate in its financial projections to lower financial expectations, reducing the possibility of financial disappointment should cannabis prices fluctuate from current industry projections.  This approach would also lead to celebration and employee bonuses if the price of cannabis reaches $1,300.00 per pound, a 30% increase in revenue from the original conservative financial projections.
 
Naturally, cannabis prices vary by season, as well as in response to supply flow and consumer demand.  Lake County is known to produce “the best cannabis in California,” according to master grower Richard Derum.  Lake County has the ideal weather to grow outside cannabis.
 
Sun-grown cannabis has six times longer shelf life than indoor cannabis.  Also, the aromatic oils (terpenes) in sun-grown cannabis are 30% stronger than in indoor-grown cannabis.  
 
There is a large market for cannabis flower and cannabis trim within the state of California.  In fact, by 2022, Marketnewsupdates.com projects the global cannabis market to be worth as much as $32 billion, a three-fold increase in just five years. 
 
United States production is anticipated to fuel much of that growth, with an expected market value of $23.3 billion.  The largest group of cannabis buyers is predicted to be in North America:  Forbes projects it increasing from $9.2 billion in 2017 to $47.3 billion a decade later.
 
. For the top ten trends in cannabis for 2019, see:
 

https://bdsanalytics.com/top-10-trends-in-cannabis-for-2019/

 
For the latest cannabis market news updates, see:
 

https://www.prnewswire.com/news-releases/california-cannabis-market-expected-to-reach-51-billion-market-value-685917412.html

 
 
 
For cannabis projections for California, see:
 

https://www.forbes.com/sites/irisdorbian/2019/08/15/california-is-worlds-biggest-legal-pot-market-says-new-report/#161e9d954cd7

 
Lake County Cannabis Alliance includes distributors and manufacturers as members. Bottle Rock Herbal Medicine, LLC, is also a member in good standing of the alliance. Bottle Rock Herbal Medicine, LLC, has selected a manufacturer to buy the cannabis trim, as well as a distributor to dispense the flower, from the Lake County Cannabis Alliance.
 

Investment

 

The internal rate of return (IRR) for the entire outside growing project is 220% over seven years.

 

Risks  

 
The partner should understand that there are certain risks that are assumed in investments in operations such as these.  Among them:  considerations of security, potential crop damage from pests and weather. The banking industry is still working out how to deal with how to handle accounts for businesses legal in their own states, but not yet recognized by the federal government.  2020 is the first-year start-up for Bottle Rock Herbal Medicine, LLC.
 

How We Plan to Mitigate the Risks

 
Bottle Rock Herbal Medicine, LLC, et al., will feature
 
  • Two gas generators for back-up power, if needed.
  • An experienced grower-caretaker living on the premises, seven nights per week.
  • Cultivation sites surrounded by secure fencing.
  • Security system will be installed by Zions Security Alarms, a company with an A+ rating with the Better Business Bureau.
  • Efficiency of the security system will be verified by the Lake County Sheriff’s Department before operations begin.
  • Charles J. Ewing will oversee the day-to-day operations of the cannabis cultivation business.
  • The managers will be able to monitor operations through their cell phones, ensuring continuity of cultivation and harvesting practices.
  • Ladybugs and praying mantis will be introduced into the cultivation areas. These beneficial bugs help create a more organic cannabis product by decreasing the need for insecticides.
  • The budget reflects costs for a professional crop management company and a horticultural expert to oversee the preparation, maintenance, harvesting, and curing of the cannabis.
  • The properties have access to several legal water sources. The properties also have ponds for back-up water storage.
  • Lake County weather channel projects a ten day forecast.
  • Background checks on all employees and persons who are involved in the business.
 
 
I am looking forward to hearing from you.  Should you wish to discuss specifics, I am available to meet with you at any time that is mutually convenient.  I wish to thank you in advance for your consideration and interest.
 
Sincerely,
 

Joleen P. Wignall

 
 
 
OUTSIDE CULTIVATION FINANCIAL PROJECTIONS BELOW     Per Acre    
Starting Date: February 2020          
           
 Income Cost Per Unit # of units Total One time Start up Yearly recurring
Production of product of an average of 3600 lbs cannabis per acre 1 $1,000.00 3600 $3,600,000.00    
Production of product of an average of 1800 lbs trim per acre 1 $50.00 1800 $90,000.00    
    Total $3,690,000.00    
Expense          
           
  Cost of plants (based on 1 acre)  $10.00 1800 $18,000.00   $18,000.00
  Optional:  Cost of clones (option for this based on 1 acre) $20.00 1800 $36,000.00   $36,000.00
  Soil (0.75 yards soil per plant) $110.00 1350 $148,500.00 $148,500.00  
  200 gallon bags $17.48 1800 $31,464.00 $31,464.00  
           
Fence 180 ‘ by 333’ (60,000 sq. ft. cultivation site with 43560 sq feet canopy space)          
  Shade cloth $4.50 1026 $4,617.00 $4,617.00  
  Gates:  48″ wide and 6′ high $100.00 2 $200.00 $200.00  
  (1) 10′ x 5′ gate  $289.99 1 $289.99 $289.99  
  3 heavy duty pipes for gates $370.00 3 $1,110.00 $1,110.00  
 Cement 1.1/2 bags per pipe hole @ $3.00 per bag $3.00 162 $486.00 $486.00  
200 covert to channel water to pond $20.00 200      
6 foot cyclone  fencing with top rail, price per foot. approx. $1.40 1000 $1,400.00 $1,400.00  
top rail  for the cyclone fence per code. $1.33 1000 $1,330.00 $1,330.00  
8 ft.  post for cyclone fence  $13.29 100 $1,329.00 $1,329.00  
      Totals $190,725.99 $54,000.00
           
           
 Misc.          
Electrician and permits for pump house and booster pump.  $2,000.00 1      
1800 one gallon containers $0.50 1800 $900.00 $900.00  
Paper suits and hair nets for 6 employees ($5.36/person/day for 246 days) $32.00 246 $7,872.00   $7,872.00
2500  gallons water tank $996.00 4 $3,984.00 $3,984.00  
Booster pump  $800.00 1 $800.00 $800.00  
Netting @ $1 per foot for 333 linear feet x 36 rows $1.00 11988 $11,988.00 $11,988.00  
Frost Control Cloth is 1000 ft for $149.00 $3,576.00 1 $3,576.00 $3,576.00  
Fertilizer and pest control/plant $125.00 1800 $225,000.00   $225,000.00
Drip/irrigation system      $2,500.00 $2,500.00  
Fertilizer injector     $500.00 $500.00  
Drip repair     $500.00 $500.00  
Gravel for roads to comply with 20 ft. wide roads to grow site  $750.00 20 $15,000.00 $15,000.00  
Plus sales tax 9.25% of total product bought       $21,318.84 $26,535.66
           
      Totals $61,066.84 $259,407.66
           
           
           
Permits         ,
Land studies $3,200.00 1      
Lake county early activation fee $9,000.00 1      
Lake county annual fee per acre $60,000.00 1 $60,000.00   $60,000.00
Water Board $1,000.00 1      
Fish and game permit $600.00 1      
surety bond $500.00 1      
Fish and game permit  no. 2 $4,000.00 1      
      Totals $0.00 $60,000.00
           
           
Insurance          
Insurance-liability (estimate)         $18,000.00
           
           
           
      Totals $0.00 $18,000.00
           
           
Power          
200 Amp service to pole to power up well – and security cameras     $22,000.00 $22,000.00  
Pump house for well           
Electrical bills approx. –  housing employees and lights           
Security Wi-Fi 24/7 @ $673 per month          
Solar City /Tesla lease power @ $220 per month to cafeteria and cottage          
propane tanks 5 gallon x2 – ($28/x3/24 hours x 10 weeks) to start seedlings          
Solar to front gate for security camera           
           
      Totals $22,000.00 $0.00
           
           
Labor          
Employee criminal checks @ $170 per person for all employees $170.00 10 $1,700.00   $1,700.00
Fence labor approx./acre     $10,000.00 $10,000.00  
Tractor with loader @ $60/hour $60.00 15 $900.00 $900.00  
 to blade the roads to 20 ft. wide pursuant to fire code     $1,200.00 $1,200.00  
Backhoe services to install covert $110.00 10 $1,100.00 $1,100.00  
Caretaker whom lives on premise- 12 months/year $4,000.00 12 $48,000.00   $48,000.00
Labor $600/week/person (40hrs. @ $15 / hr.)          
Seedling labor – $4,000.00   $4,000.00   $4,000.00
  March   $2,400.00 2 $4,800.00   $4,800.00
  April $2,400.00 2 $4,800.00   $4,800.00
  May $2,400.00 2 $4,800.00   $4,800.00
  June $2,400.00 2 $4,800.00   $4,800.00
  July $2,400.00 2 $4,800.00   $4,800.00
  August $2,400.00 2 $4,800.00   $4,800.00
  September $2,400.00 2 $4,800.00   $4,800.00
  October $2,400.00 2 $4,800.00   $4,800.00
  November  $2,400.00 2 $4,800.00   $4,800.00
           
Work Comp Insurance estimate approx (11%)     $12,111.00 $1,452.00 $10,659.00
           
      Totals $14,652.00 $107,559.00
           
           
curing and processing          
Venting and doors for 4 cargo containers $2,000.00 4      
Electrician for metal building  to install lights and fans (approx) $2,000.00 1 $2,000.00 $2,000.00  
Permit for Cargo containers $779.00 4      
                                                                              Totals $2,000.00 $0.00
           
           
Trimming           
Trimming machine $40,000.00       
Sales Tax on trimming machine @9.25%          
gloves and scissors $175.00        $175.00 
90% of cannabis trimmed with machine          
Price per pound is decreased          
Trimmers $200/day -independent contractors ($200/day x 78 days) $15,600.00  $78,000.00    $78,000.00 
We need 78 days @ 5 trimmers/day to trim 10% (360 lbs)          
November trimmers begin  2 pounds/person /day         
December  2 pounds/person /day         
January   2 pounds/person /day         
February   2 pounds/person /day         
           
      Totals $0.00 $78,175.00
           
           
Post harvest tax          
State cultivation taxes @ $9.25/oz for 3600 lbs (paid after harvest)         $532,800.00
Distributor costs @$100/lb $100.00 3600     $360,000.00 
(will test product)  $14.00 3600     $50,400.00
      Totals $0.00 $943,200.00
           
           
           
Permits/state tax for cannabis          
County application fee @ $9000          
State application fee 
  $1555/acre. 
      $1,555.00   
State annual fee @ $13,990/acre         $13,990 
           
      Totals $1,555.00 $13,990.00
           
           
Professional services          
Electrician for power  to cargo containers and  grow site- for security system (approx)          
Erin Carlston Esq for preparing 3 operation agreements. 1/acre/LLC          
Real  Estate attorney  property purchase agreement,           
Civil engineer for site plan           
Planning expert to review  paper work for county’s early activation program          
Dig a approx. 300 foot well with 6 inch casing.          
      Totals $0  $0 
           
Equipment          
solar pumps for well and pond $2,799.00 3   $8,397.00  
John Deer Mower (997S) lease @ $350 per month $350.00 12      
1 all terrain vehicles @ $200/mo $200.00 10      
All terrain insurance @ $200/mo. $200.00 12      
security system for grow site, metal building,
cafeteria, cargo containers and gates with 17 cameras
$19,429.00 1   $19,429.00  
30′ x 80’x 15′ metal building for drying and curing on cement slab $81,600.00 1   $81,600.00  
      Totals $109,426.00 $0.00
           
    Clone Option Grand Totals (per acre) $401,425.83 $1,534,331.66
           
    Per Acre Gross Income – first year (per acre)   $1,754,242.51
Head growers production cost @ 17% of gross Income     production cost   $473,645.47
Charles Ewing- over see day to day operations- @ 10% gross income.          
    Per Acre Net Income (including start up costs)   $1,280,597.00
           
           
    Per Acre Gross Income – recurring subsequent years    $2,155,668.00
      production cost   582,030.00
           
    Per Acre Net Income    $1,573,638.00
           
           
Footnotes:          
           
1.  Estimated pound production at 2 lb. to 5 lbs. / plant = 3600 lbs per acre to 9000 lbs per acre. Most growers in Lake County are getting $1200 to $1300  per pound in 2019 for sun-grown cannabis.          
2. Starts seeds in march and plant in June          
3. First year will be clones if start date is in 2020.          
4. First year develop 2 acres of outdoor cannabis cultivation.          
5. Second year develop 3 additional acres of cannabis    cultivation.          
6. Partner gets 50% of business and use of 83.8 Acres for and initial $1,550.000 investment.          
7. 75% of net profit to the partner for the first three years and or initial all his/her initial investment capital is paid back.          
           
           
           
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 


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