This page last updated on 04/22/2019
Details about the sale of Nipton is more complicated than it appears on the surface and has been hard to piece it all together. In September 2017, Nipton was purchased by American Green Inc., for $5 million USD with plans to turn the town into a cannabis tourism destination. The CEO of American Green Inc hoped to make this into the first "Pot Town, USA". However, after failing to attract the capital investment necessary to continue the project, American Green Inc. sold the town in March of 2018 to Delta International Oil & Gas for a total of $7.7 million USD in debt assumption and Delta preferred stock, along with a provision that it continue with the project to transform the 80-acre town on the edge of the Mojave Desert into a cannabis-themed resort.On March 15, 2018, American Green, Inc. announced that it has agreed to transfer its holdings in Nipton, California to Delta International Oil & Gas, Inc. for consideration totaling more than $7.73 Million. Under the Agreement, American Green will manage Nipton and associated projects for 5 years with a 5-year option. Delta will seek to acquire additional properties subsequent to the Nipton acquisition. Both parties intend for American Green to manage those properties as well. At closing, Delta will assume approximately $3.73 Million in American Green debt, and issue $4 Million in Delta Series A Secured Convertible Preferred Stock (“Series A Stock”), convertible to 160,000,000 shares of Delta Common Stock. The Series A Stock will pay a 5% annual dividend, in stock or cash and will be secured by a lien against the Nipton properties.
It should be noted here that some of the initial news stories surrounding American Green Inc.'s purchase of Nipton generated in the press falsely characterized the purchaser’s intent to immediately begin leasing land to cannabis growers, or even growing cannabis itself. This is not and never has been the company’s intent for the area. Only when, and if, American Green (as manager) and Delta (as owner) receive full approval from the relevant controlling authorities, would Nipton move, responsibly, into the cannabis product development sector. As the Nipton Project develops in the future, the company will continue to interact with all state, county, and, hopefully federal, agencies to ensure it is acting entirely within the requisite legal guidelines in this, and all other projects the company undertakes. Though California has approved the growing and use of marijuana, it is restricted by county.
It was noted initially, that American Green planned to spend $2.5 million over the next 18 months transforming Nipton into a town that includes hundreds of hotel rooms, mineral baths, a craft brewery, farm-to-table dining experiences, a cannabis farm, artist-in-residence programs, and plenty of marijuana-related businesses, such as cultivators and glassblowers. American Green also planned to build a production hub for cannabis-based products starting with bottling and distributing cannabidiol-infused water directly from a local aquifer. Cannabidiol—or CBD, as it is commonly known—is the nonpsychoactive part of cannabis that has anti-inflammatory and anti-anxiety properties but does not give users a high. The cost of CBD products in Nipton is higher than other states due to the state tax imposed by California. Who is responsible for making current projects and improvements and who will be actually steering these efforts in the future, American Green or Delta International, is not clear.
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