MJBizMag February 2023 - 45

Sustaining Ownership
Oregon cultivator believes in importance of maintaining control over property
By Kate Lavin
W
hen Jesce Horton began
looking for his first
warehouse to cultivate
cannabis in Oregon's regulated
market, landlords for Portland
properties routinely charged
marijuana companies three to eight
times as much per square foot as their
mainstream counterparts.
" We were in a really unfavorable
lease, one that we were excited to
have, " Horton told MJBizMagazine
of Lowd's entry into the regulated
marijuana market.
In order to secure a lease on the
property, Lowd prepaid a large
portion of the rent, only to lose
the lease because of some fineprint
zoning issues. The story was
a common one in the early days of
regulated marijuana, Horton said.
ONWARD AND UPWARD
Today, the craft cannabis producer
is operating out of its longtime
headquarters while building out a new
campus about 5 miles from downtown
Portland.
Lowd first signed a purchase
agreement for the new location,
formerly an auto-wrecking facility, in
2016. Licensing and permitting issues
delayed the project, and the purchase
finally went through in 2021.
" It was a five-year purchase
agreement at 0% interest, with all the
money going toward the purchase
price, " Horton said. " So, it was a really
great agreement, but there were a
lot of ups and downs in between that
prevented us from being able to get in
there and operate. "
Language in the purchase
agreement for Lowd's campus
property specified that the company
Jesce Horton of Lowd Cannabis is building out a new cultivation site in Portland, Oregon.
Photo by Sam Gehrke
could assign it to another party.
During the five-year span between
purchase agreement and sale, Horton
said he was approached several times
by groups offering a sale-leaseback,
though ultimately he decided
against it.
" Being a Black entrepreneur, the
idea of owning real estate is something
that we've always strived to do. So, I
had a lot of things holding me back
from seriously considering the saleleaseback, "
Horton said.
REARVIEW MIRROR
Now that Lowd is actively building
the facility, Horton said he is pleased
that his company maintained
ownership.
" I certainly understand the
temptation of doing a sale-leaseback.
Given this investment market ...
you've got to do what you've got to
do, " Horton said. " However, in a more
saturated market like Oregon-one
that is also very depressed from an
investment standpoint-the ability
to get funding, even when you are a
top brand or are doing fairly well, is
very bleak.
" When we go to the investment
market, we can say. 'Hey, we've
got about $2 million of equity.' ...
And it is way less risky for people
to say. 'OK, sure, we'll give you this
amount of money,' " he said. " I don't
know how we would have been
able to continue moving forward,
investing in our brand and in our
company, without having that real
estate. I think it would have been
impossible. "
mjbizdaily.com | February 2023 45
http://www.mjbizdaily.com
MJBizMag February 2023

Table of Contents for the Digital Edition of MJBizMag February 2023
