While some budding entrepreneurs in Illinois will enter the legal marijuana industry as novices, others are seeking a competitive edge by harnessing the expertise of those that are already well versed in the industry.
According to the Associated Press, Wellness Group Pharms, a licensed medical marijuana cultivator in Illinois, is being backed by AmeriCann (OTCQX: ACAN), a cannabis consulting company based in Denver. Wellness Group Pharms, licensed for District 22 in Illinois, was one of 18 cultivation centers awarded a permit by Gov. Bruce Rauner on February 2, 2015.
With the $25,000 non-refundable application fee and a required escrow account with $2 million, the cost associated with Illinois’ cultivation permit application provided the initial financial hurdle for applicants. Once awarded licenses, cultivators then had to pay a $200,000 permit fee for the first year.
If AmeriCann can help WGP transform marijuana into the ultimate cash crop, then the cost of the paperwork will have been worth it. WGP’s cultivation site is located in Anna, Illinois. According to WPSD, the site is made up of approximately 10 acres located right outside of city limits, potentially ready for harvest this summer.
A press release issued by AmeriCann stated, “AmeriCann will receive a performance fee on all sales, a royalty on AmeriCann’s infused product and extraction line, a monthly consulting fee and monthly lease payments.” However, the Associated Press reported the specifics: AmeriCann will receive “25 percent of cannabis sales, plus a 20 percent royalty from the sale of cannabis extractions and infused products” and “get an annual consulting fee of $240,000 and $6 per square foot lease payments.”
As other licensed cultivators are still seeking investors, WPG might have a slight advantage by receiving backing from AmeriCann; however, as of March 4, only 1,600 patients have been approved to use medical marijuana in Illinois, which isn’t enough to create a steady stream of revenue for any of the players in the state’s industry.