LARGEST MICHIGAN GROW FACILITY COMING TO ADDISON, MICHIGAN

Commercial Property Developer 237 Addison, LLC has a vision: Create the Largest Indoor Cannabis Grow in the State of Michigan. We are very excited to have a vision that is coming to fruition. We are doing what no other developer or Cannabis Company is doing- building a state of the art facility utilizing green energy and doing it for less. 

“The amount of money being wasted in the cannabis industry is simply irresponsible,” said Max Harvey the developer of the Addison Development Park located in the Village of Addison, MI. Since when did a steel building cost $400-$500 per square foot to erect? I believe that inexperienced operators and investors are jumping into this industry and have no idea what the buildout or operational costs are.

I found an opportunity during the Covid crises and made an offer to buy the property for asking price the day I discovered it. After that, I assembled our team of professionals and we began to work. I was fortunate enough to find such a great community to work with. The Village of Addison is a small town of about 500 people, and they have embraced this opportunity. They understand that this will bring Jobs and revenue to the community.

We are putting in all the infrastructure and using local talent to do it. Stafford Engineering is the only out of town professional that we are using, and that is because Steven and I have a history working on Green Energy Projects. Mannick & Smith Engineers developed the site plan and topography taking us from corn to cannabis. When I called and told them I needed the topography done tomorrow, I forgot to tell them there was 24 acres of corn on it. Needless to say, they weren’t happily surprised, but Kevin and Todd and the rest of the Mannick & Smith team got it done.

We closed on the property in late September and we knew we were operating on short time before winter. The day after closing I made a deal to harvest the corn and began development. I had to call a special village council planning meeting. I was very excited that I got this project approved through Village Council and the Planning Committee without revisions. The Village has wonderful leadership and they are committed to growing their revenues through this one time opportunity. The day after it was approved, I drove to a job site to track down local contractor John Trumble of Trumble Excavating. John began working immediately to balance the land and create the pad for Phase 1. We have had excellent response to source building material from Addison Lumber and we are even getting our concrete locally from Darby Ready Mix. We promised to use local and we kept our promise.

It was really exciting but now it was time to work and we were running short on time, said Harvey. I hired Woodard Architects and purchased a red iron 40,000 square foot building. Even during covid, I was able to get people that wanted to get business done. I ordered the building the first week of October and it was due to arrive the November 30, but it got pushed back a week. Everything was moving fast, but that week was our window of opportunity. We were set to get our concrete delivered by another local company, Darby Ready Mix, but we just ran out of time before the snow slowed us down.

It was frustrating said Harvey, we wanted to be up and growing before summer. We didn’t let the winter stop us, we just reprioritized what needed to get done. Addison Development Phase 1 entered into a agreement to lease a turnkey facility to Humboldt Grow, LLC. We worked with our grower, Humboldt Grow, to create a turnkey facility that lowers the overall expense to cultivate cannabis with green energy that lowers the impact to the environment grow cannabis.

In Phase 1, Humboldt expects to harvest over 960 plants per week with zero waste in a perpetual grow. We know Michigan has a booming cannabis market, but we also know that farming can have a big impact on the environment. In fact, agriculture pollution is the leading cause of water pollution in the world. It is irresponsible not to consider the environmental impact that cannabis grows will have on the water supply if not addressed, said Harvey. Many growers have not considered the impact in their design phase, we have. Imagine growing hundreds of thousands of plants per year in a media that you can’t recycle. Where does that unused nutrient water and media go?

We recycle 100% of our grow water and capture the moisture from the dehumidification system. We then test the return nutrient water and re dose the plants with am inline feed system. We use energy efficient HVAC system heat pumps with a pond sourced water loop that allows us to keep the vapor pressure deficit in the proper range to prevent mold from hatching. There isn’t a more efficient system available. On top of that, the biochemist that designed the water system is able to achieve 40 ppm of oxygen at the root level of the cannabis plant. That technology is known as dissolved oxygen. Many confuse this with suspended oxygen- but the differences are vast says Harvey.

Dissolved Oxygen at 40 ppm promotes huge increases of cannabis growth. This allows the grower to get more yield and to decrease growing time, which increases the number of pounds you can grow per year. We also work with world class scientist and professor in the lighting field. Some of companies out there grow with trial and error, not science. They lack a fundamental understanding of what they are doing- we let science and technology control the process.

The Village of Addison has created the overlay district that encompasses the land that purchased for the Addison Park Development. We will be able to grow over 120,000 plants at scale from one location. At scale we estimate we will have over 30% of the market share. We will create the largest indoor grow complex at a fraction of the cost that others pay. We will deliver our Phase 1 facility under $4 Million or $100 per foot.

Our experience with green energy lighting, controls, solar, water, and HVAC systems is superior to other developers. In 2018 we completed the largest Michigan PACE (Property Assessed Clean Energy) project that has estimated saving if $15.6 Million. We recently completed building renovations in Toledo, OH for new entertainment center, Urban Air, using the PACE program.

A development this large does not come without challenges. After a setback from the winter snow, the project lost an agreed finance partner. The company just couldn’t deliver the money and execute pursuant to the signed term sheet said Harvey. We had to find a solution for funding. The problem for cannabis companies is that it is still Federally illegal. Cannabis is a Schedule 1 narcotic and that hinders banks from lending for cannabis.

Harvey has done what all entrepreneurs with challenges do- find a solution. After running into the finance challenge, I just thought about how I could create my own funding source. I went to the SEC and created a private equity fund pursuant to Rule 506 (c) of Regulation D. The fund was approved on March 2, 2021. Here it is one month later and we are moving forward on this vision.

The Securities and Exchange Commission has amended some requirements pursuant to the 2017 JOBS ACT under Regulation D that makes it possible for funds to advertise directly to potential investors under rule 506 (c) utilizing social media platforms.

On March 15, 2021 the SEC new rules for investor verification went into effect. This relaxed requirements for 506 (c) issuers. One specific provision allows verification for accredited investor status once every 5 years. This allows investors some flexibility to invest in multiple 506 (c) offerings. 

The offering is still only available to accredited investors, but the flexibility of the rule changes makes it a great vehicle for developers, Harvey added. We offer the investor an 8% preferred return which allows the investor to get their capital investment back, plus an 8% cumulative return compounded annually.

I think investors hear buzz words like “vertically integrated” and think that’s a good thing. You ever see tobacco company own a convenient store? That may be a great idea in another country, but I think we can agree that it didn’t work here. Why would you want to be in a business that has little barrier to entry with a shortage of market supply when the big growers have their own dispensaries? It certainly doesn’t make financial sense to continue to buy from a competitor grower that does have a retail distribution. Think about that- the grower who has their own dispensary can internally inflate the market price and sell to you at that high price level. You are putting yourself out of business while letting your competitor add to their profits.

That is the need in the market. Humboldt Grow will service all of the dispensaries that don’t have a grow. Humboldt Grow will be able to provide the market with high quality product at a lower production cost.

Accredited Investors may inquire about investment opportunities by reaching out to the Addison AG Tech, LP at [email protected] or [email protected] and you may find more information about the Addison Development Park at their website: www.AddisonDevelopmentProeject.com