GroEstate Business Overview
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Acquire warehouse real estate, to lease to cannabis companies for growing.
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In addition, cannabis grows have specific requirements relating to security and to electricity that make it such that a cannabis company cannot simply rent any warehouse.
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Purchase either existing grows or warehouses that can be upgraded to the specifics for the grow & rent out the space, under long term (10+ years), fixed price leases.
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Investors will receive cash flows from the lease + appreciation of the property.
Token Returns
Fixed return from the rents paid to the property, quarterly basis in the form of either USDC or ETH.
Annual returns (property rents) = 6% - 8% .
Properties’ total expected appreciation = 8% - 12% .
Total expected annual returns = annual cash flow + property appreciation = 18% - 22% .
Market
Banking
The cannabis industry still faces significant challenges, including federal prohibition in the United States, which limits access to banking and makes interstate commerce difficult. Traditional business loans can be disqualified for businesses that are engaging in federally illegal activities like cannabis.
All banks that participate in banking activities are required to have a bank charter. There are two different types of charters, the main difference being whether the permit to do business was granted by the state or the federal government. Banks must comply with regulations associated with the grantor of the charter. Due to cannabis not being legal under federal law, federally chartered banks usually will not issue loans to cannabis companies.
In the states where cannabis is legal, some state chartered banks have agreed to assist in financing cannabis businesses but substantial fees due to the industry may be applied. In addition, all banks receive federal insurance from the FDIC and so even many State chartered banks are wary of doing business and issuing mortgages to cannabis companies.
Regulatory
Recreational cannabis use is now legal in 21 States for adults over age 21.
Medical cannabis is now legal in 37 States for 18 or older with a physician’s recommendation/prescription.
Market Size
The legalization of cannabis presents significant growth opportunities, including the expansion of the cannabis industry into new markets and the development of new cannabis products, such as cannabis-infused beverages and cosmetics. The use of cannabis in medical research also presents significant growth opportunities for pharmaceutical companies and research institutions.
Additionally, advancements in technology and production techniques can help to improve efficiency and reduce costs for businesses in the cannabis industry. Across the world, cannabis businesses have financial hurdles like legal red-tape and stigmas even in countries where it is legal, but these stigmas are changing, and more and more people are looking to get into the business.
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The global legal cannabis market was valued at $17.5 billion in 2019 and is projected to reach $73.6 billion by 2027, growing at a CAGR of 18.1% during the forecast period (source: Grand View Research).
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In 2020, North America had the largest share of legal cannabis sales worldwide, accounting for nearly the entire market (Statista).
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California is the single largest cannabis market in the world, larger than the entire country of Canada (Statista).
Operations
GroEstate Token Flow
Alberta, Canada
1st GroEstate Property
(to be acquired)
Initial Property
The planning management has already identified the initial [3] properties that it is to purchase to be part of the GroEstate Token. The first property is located in Alberta, Canada. It is a facility that was purchased by a cannabis grow less than [4] years ago. Between the purchase price and leasehold improvements, there is more than CAD $30 million invested within the property. The lease will pay approximately CAD $100,000 in monthly rent plus an additional premium of [4%] of sales as a royalty. We expect total monthly payments to exceed CAD $120,000.
Other Properties are under negotiation and all properties will have similar characteristics.
T7X Exchange
GroEstate Token will be available to be purchased and traded on the T7X Crypto Exchange. The exchange has been established to list and trade only tokens that have an intrinsic value and are backed by real assets. This token will be the one of the first two tokens that will be available for purchase and trading on the T7X exchange.
In addition, the exchange will be the mechanism for delivery of dividends to the holders of these tokens. The holder of the tokens at the time of the declaration of the distribution will receive these distributions. T7X is in the process of registration in Lithuania and is open to all non-US based people and institutions.
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