Last year, a Phoenix-based cannabis technology company by the name of American Green, bought an old mining town in California called Nipton. The company purchased the area for $5 million dollars with hopes of turning the ghost town into a go-to pot destination. One year later and they are selling the town.
Nipton was originally owned by Gerald Freeman. He was a Los Angeles-based geologist who enjoyed looking for gold. In the 1950’s he discovered Nipton but didn’t actually buy the ghost town until 1985.
Alongside his wife, Roxanne Lang, Freeman spent the preceding 30 years renovating the hotel and trading post in the town. He also had a hand in restoring the handful houses that were situated within 10 miles of the connecting interstate between Southern California and metro Last Vegas.
Over the last few years, Freeman’s health declined and the couple put the town up for sale. A year after the geologist died, Mrs. Lang sold the property to American Green.
When they first bought the 80-acre town, American Green planned to set up bud-and-breakfasts. They also planned on bottling cannabis-infused beverages derived from Nipton’s aquifer. After carving out a strong niche, American Green hoped to attract cannabis-themed boutique owners to the area. However, this hasn’t come to fruition as quick as they would have liked.
American Green cited their struggles with raising the money necessary to turn around the desert mining town as their reason for selling. As American Green explained in a statement,” Buying and building towns is very cash intensive. Up until now, the cost of attracting capital has been very expensive for our company.”
American Green made a profit on their investment by selling to Delta International Oil & Gas for $7.7 billion. This agreement included a provision that would still allow American Green to build a cannabis-themed resort. This development contract between the two parties is set to continue over the next five to ten years.
Per the sale, Delta will assume $3.7 million of the debt that American Green still has. Plus, American Green will receive $4 million in Delta stock.