Following its legalization of cannabis for recreational use
at the beginning of 2014, the performance of Colorado’s recreational and
medical marijuana markets have exceeded expectations. Last year, the state
recorded just shy of $700 million in total sales, beating market forecasts by
more than 20 percent, according to the Legislative Council of the Colorado
General Assembly. This sharp increase in demand produced a similar spike in
cultivation figures, with more than 500,000 plants being cultivated each month
as of December 2014. Cherubim Interests, Inc., through wholly-owned subsidiary
BudCube Cultivation Systems USA, is primed to capitalize on this cultivation
boom through its unique mini-storage business model.
While the term ‘mini-storage’ probably brings to mind small
garages packed full of antiques and holiday decorations and owned by companies
like Public Storage (NYSE: PSA) and AMERCO (NASDAQ: UHAL), Cherubim’s
innovative approach to the concept could be the perfect solution for meeting
the rising demands of Colorado’s cannabis industry while maintaining a low
barrier of entry for startup cultivation operations. Through its single tenant
‘micro’ units, Cherubim plans to enter into agreements with individual tenants
to acquire and develop an affordable solution to cannabis production. Likewise,
the company will offer ‘macro’ solutions to larger clients that can then be
subleased to individual tenants.
“Even though we will first market test leasing units in the
legal cannabis industry, there are many other practical applications for this
technology,” Patrick Johnson, chief executive officer of Cherubim, stated in a
news release. “Across the globe, massive food shortages exist due to extreme
drought conditions and this application will serve this market niche as well in
the future.”
Reaffirming the viability of Cherubim’s strategy, the
industrial real estate market in Colorado is currently thriving as marijuana
merchants scramble to locate ample space in which to house their legal cannabis
cultivation operations. This demand is illustrated by the current leasing rates
for industrial space in Denver, which are roughly four times the national
average at $17 per square foot. This demand is expected to continue its climb
in the coming months, with state budget officials predicting recreational sales
of $613 million over the next year.
As Cherubim continues to utilize a hybrid business model
that capitalizes on the performance of legalized cannabis markets around the
country while maintaining a focus on the acquisition and development of
residential and commercial rental properties, the company is in a favorable
strategic position to promote sustainable growth. For prospective shareholders,
this positioning makes Cherubim an intriguing investment opportunity moving
forward.
For more information, visit www.cherubiminterests.com
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