The Cannabis License Black Market - $50,000,000 for a Florida Seed to Sale?

florida cannabis license

Would you pay $50 million for an approved cannabis license in Florida?

The headlines these days are all about black market vaping products verse legal market products. Is it what is being vaped or the actually process of vaping? We will delve into that in a future article but for now, the cannabis black market has had a bright light shined on it regarding quality of product and testing. But there are other black markets, if you will, in cannabis, ones that involve license transfers and sales being done on the up and up and other being done on the down low.

Massachusetts, which can’t seem to get out of its own way as far at bad headlines goes right now, is clamping down on license transfers and sales after it was discovered large MSOs (Multi State Operators) had moved into the state, and to avoid the restrictions placed on the number of dispensaries you can own, were buying up smaller licenses and dispensaries but using shell companies or having hand shake agreements with owners to keep their names on the license. Basically, in order to get around the “one group may only own 3 locations” rule, they were cutting side deals and being evasive to the state of Massachusetts about the true ownership of certain locations.

How big is the license transfer space and black-market arena for approved cannabis licenses in restricted states? Big. One broker in Florida is now searching for a buyer of an already approved seed to sale license in Florida, the asking price, $50,000,000.

Would $50,000,000 make sense in a state like California or Oregon, not in a million years. Florida is a “seed to sale state license” so it is completely vertically integrated. There have been a limited number of licenses made available for medical marijuana so they carry an expensive price tag. It is a long and draining process to apply for a license in Florida, both economically and emotionally. The application must be completed with a specialized attorney and can take anywhere between 6 to 18 months carrys a fee of around $61,000 to get the license application turned in and reviewed. If the Florida application is approved to be reviewed, the next step, a $5 million bond, must be posted within 10 days of the application being reviewed for the next step.

Florida is strictly a medical state for now, but it has enormous potential for recreational use. A little over 300,000 patients have been approved for the Florida medical marijuana patient program and there are petitions being worked on now to add a recreational cannabis vote or amendment to the 2020 elections. With a large elderly population retired there and over 1,000 people a day moving to the state, it is a very valuable place to land a cannabis license. Trulieve, the largest cannabis dispensary operator in the state by far controls about 60% of all medical marijuana sales in the state. Florida is projected to be on of the largest cannabis states in the country when full scale legalization happens, with some experts predicting Florida could be a $2.5 billion market.

Behind California and New York, Florida could turn into the Southern Capital of Cannabis because they have the largest population of Baby Boomer wealth in the US, and seniors are the fastest growing segment of cannabis sales right now. It is a perfect storm, no pun intended for Florida, of the wealthiest slices of the US population all having health concerns like arthritis and sore hips and backs, all having access to medical marijuana. It also helps that many of those Baby Boomers are retired and don’t have to worry about a surprise drug test at work or what an employer might say if they found you had a medical marijuana card.

Is a Florida cannabis license, seed to sale, worth $50,000,000 right now? Probably not, but that is just the asking price, not necessarily what it will sell for down the road. Much like Florida real estate, you can ask any price you want for your penthouse on Miami beach, what you actually sell it for is what matters.

The good news? Owner financing of the $50 million is available to qualified buyers.

Let me see how much my home equity line has left now.