The latest sign of the marijuana industry’s move into the mainstream: a multimillion-dollar growing and processing complex planned for west Eugene by a publicly traded real estate company.
The project would have room for more than 30 pot ventures in steel buildings that would resemble tall storage units.
Grow Condos Inc., which is based in Eagle Point near Medford, submitted the plans to the city of Eugene last week. The documents detail nearly 50,000 square feet of potential growing space divided into 32 units of 1,500 square feet each in four buildings. The publicly traded company would sell or lease the units, which would be located in a West First Avenue industrial park.
The plans only indicate the units would be for “horticulture,” but according to the company, the more than 2½-acre “Nuggetville” project would be for marijuana. The company would market the industrial spaces for sale at $150,000 to $175,000 each.
A booming recreational marijuana growing and production market in Eugene, plus a generally healthy local economy, have gobbled up most available warehouse space. Grow Condos Chief Executive Officer Wayne Zallen hopes to capitalize on the situation, as he did with a similar 15,000-square-foot warehouse in Eagle Point. The company says it has fully filled its Eagle Point warehouse and has raised millions of dollars to build the Eugene project and other potential complexes.
“We are very pleased to be able to expand in this advantageous segment of the industry,” Zallen said in a news release. “We firmly believe that the greatest potential for a high level of success is when timing and opportunity meet. At this stage in the game in the cannabis industry, it’s evident that the revenue potential here can be exponential.”
The Oregon Liquor Control Commission last year began licensing the state’s first recreational marijuana growers.
Grow Condos stock is traded on the OTCQB, a marketplace run by New York-based OTC Markets Group Inc. The OTCQB is for small and early-stage companies. Grow Condos’ stock was trading for about $1.05 a share on Friday.
Grow Condos incorporated in 2014, but the roots of the company go back more than 15 years.
Before creating space for marijuana growers, Zallen and a business partner leased units in a commercial warehouse at an unspecified location to construction companies, such as roofers and cabinetmakers, according to Grow Condos’ disclosures. During the Great Recession, between 2007 and 2009, tenant after tenant left the warehouse. With the building empty, medical marijuana growers approached the owners about the space, and the concept behind Grow Condos grew from there, the company said. Along with growers, the condos may attract marijuana bakers, extractors and other creators of pot products.
Tangiers Global of San Diego agreed last spring to buy stock for $5 million from Grow Condos, according to Grow Condos’ annual report filed in September with the Securities and Exchange Commission. Zallen told the Medford Mail Tribune in April that he planned to spend $3.2 million on the Eugene project and the remaining money for another warehouse complex in Nevada.
The Eagle Point facility is the only bricks-and-mortar project the company currently owns, according to its disclosures.
Messages left by The Register-Guard last week for Grow Condos and Zallen were not immediately returned.
Grow Condos recently filed a site review application with the city of Eugene for the west Eugene site and paid a more than $5,000 site review fee. But the company likely needs only a building permit, city senior planner Gabe Flock said.
The land where Grow Condos plans to build is zoned for industrial use, and horticulture is an approved use.
“In this case it looks like it is allowed outright, and it is surrounded by other industrial uses,” Flock said.
He said the city would probably refund the site review fee to the company.
Grow Condos paid $326,629 for the vacant lot in the Pioneer Resources Business Park in March, according to Lane County property records. The company bought the land from the developers of the business park. Neighbors include diesel repair shop Oregon Fuel Injection and plumber Roto-Rooter.
Condo buyers would be responsible for having the proper state medical marijuana growing card or recreational marijuana growing license, according a published news report about the project. The Eagle Point condos have large electric panels, security systems and water hookups.
The Grow Condos buildings would be “designed and built by growers, with all the required electric, water, drains,” according to a company brochure. The units would feature 22-foot ceilings so owners or tenants could add a mezzanine, increasing growing space to 3,000 square feet, from 1,500 square feet, the company said.
The plans for Eugene call for a six-foot chain link fence with screening around the buildings.
The explosion of the marijuana growing business has caused the Eugene-Springfield warehouse market to become tight, said commercial real estate broker John Brown of Evans Elder & Brown in Eugene. “That industry has taken a lot of space off the market,” he said.