Diego Pellicer Worldwide Inc. opened a second high-end marijuana shop in Denver at the site of a dispensary raided by federal authorities in 2013.
The Seattle-based cannabis real estate developer says it’s collecting rent from the Denver store and the Sodo flagship as of March 1. Diego Pellicer says that’s an important milestone because the first phase of its business model relies on its branded tenants’ success and ability to pay rent.
“With rent commencing in all of our branded locations, Diego Pellicer can now focus on expansion and new acquisitions as we increase our market share and follow our growth strategy to drive shareholder value,” CEO Ron Throgmartin said in a news release.
Diego Pellicer Worldwide’ will continue to expand in Colorado and Oregon and has labeled California and Florida as “huge markets,” Throgmartin said.
Diego Pellicer Worldwide does not grow or sell marijuana products, but rather buys and develops real estate for marijuana shops and production facilities to rent to tenants that license its premium cannabis brand.
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Diego Pellicer Worldwide’s leasing model is based on a 20 to 30 percent return on investment in its properties, according to securities filings. The company’s business model also includes income from sales of branded non-cannabis products like pipes, vaporizers, lighters and other accessories.
The company is developing a network of branded tenants in states that allow the sale of recreational marijuana. It pre-negotiates deals to buy the businesses of its retail and marijuana-growing tenants, deals that could be triggered if federal law changes to allow Diego Pellicer Worldwide to own and operate a natiponal seed-to-sale business.
“With 27 jurisdictions legalizing marijuana, most having medical dispensaries and some legalizing recreational marijuana, there are almost more opportunities than time and money to execute” new Vice President of Real Estate Nello Gonfiantini said in a securities filing. “We are mobilizing to take advantage of this accelerating growth. … Lease revenue will provide premium recurring revenue for our company while having the option of capitalizing on consolidating a high-growth industry,
The newest retail location opened at Denver dispensary building formerly owned by VIP Cannabis (2949 W. Alameda Ave.). The property was targeted during the largest-ever federal raid on Colorado’s medical marijuana industry in November 2013.
Diego Pellicer also rents out the space for two marijuana growing facilities in Colorado.
“We’re confident that state-specific administrations will continue to support the cannabis industry as the legitimate, profitable, and innovative space that it is,” said Neil Demers, the CEO of independent brand licensee Diego Pellicer- Colorado.
Managing Editor Jim Hammerand oversees the Puget Sound Business Journal’s print and online news operations.