CVIndependent

Sun11172019

Last updateTue, 18 Sep 2018 1pm

The Coachella Valley continues to grow as a cannabis destination—and no city is more prepared to reap the benefits than Desert Hot Springs.

The city has experienced an often-turbulent history, but when it comes to cannabis, it’s been the little city that could, because of its proactiveness and foresight in realizing the potential it has, because of what it has—land, and lots of it, as well as a natural mineral aquifer. Given that the state of Colorado just announced it had brought in $1 billion in revenue since marijuana legalization there in 2014, the potential for tax revenues is huge.

Most people in the Coachella Valley rarely go into DHS, given its reputation and its location on the opposite side of Interstate 10. In its heyday of the 1960s and 1970s, Desert Hot Springs was known for its restaurants and mineral spas; people came from around the world to enjoy the waters. However, in the 1990s, the city began to morph from a retirement community into a city of commuting working-class people—making the city less than attractive economically.

Desert Hot Springs’ mayor, Scott Matas, was born and raised in the city and has seen it change dramatically during his lifetime. The city has filed for bankruptcy—and almost did a second time; those financial challenges motivated DHS to take part in the formation of cannabis-cultivation policy for the state of California. The city at one point not long ago had literally $400 in the bank, and more than 70 percent of the city’s voters decided to approve dispensaries and large-scale cultivation facilities.

The city’s first cultivation facility was Canndescent; when it opened three years ago, it was the first in Southern California. Since then, the cannabis landscape has grown dramatically: There are currently 78 approved large-scale cultivation and dispensary sites. Eighteen are in the process of construction permitting; 12 are under construction; 21 are operational and producing tax revenue. These locations range in size from 2,000 square feet to more than 1 million square feet.

“In the next two years, we have 51 projects we expect to be producing and have seen $1 million in cannabis construction in the last year,” Matas said. “By 2021, we expect to see $3 million in tax revenue, and by 2025, we expect to see $5 to $6 million coming from these 51 operating locations within the city.”

One of the largest—and most fascinating—proposed projects is Tyson Ranch. The massive resort is slated to include glamping (glamorous camping), the world’s largest lazy river, a high-end hotel, a large event facility for conventions, a “university” dedicated to education about cannabis cultivation, and sports stadiums. It’s slated to be built over the next decade, and plans for the glamping facility should be soon submitted to the city—with a groundbreaking following not long after.

Desert Hot Springs calls itself as “The Spa City,” but has struggled since its heyday to attract the tourism that the mineral waters once did. Matas said marijuana is helping change that.

“The spas are revitalizing, and those spas bought during the tech era by people with technical backgrounds are now being purchased with cannabis in mind, and will be once again much-desired tourist destinations,” Matas said. These new and improved resorts include “bud and breakfast” or “soak and smoke” accommodations. Thanks also to Desert Hot Springs’ great views, Matas said, the city should once again become a place to enjoy the hot water and relax, with a focus on health and wellness.

The spas, new facilities and proposed consumption locations—modeled after wineries with tasting rooms—could lead to an explosion in job growth. The city is home to about 300 cannabis-industry jobs today, but Tyson Ranch alone could bring in 1,000 jobs, and the massive proposed Coachillin’ Canna-Business Park could be home to more than 2,400 new jobs once it’s built out.

What does this mean for the Coachella Valley? It means that for the first time in many years, people may actually want to drive into Desert Hot Springs for both enjoyment and employment. The economic future is bright for Desert Hot Springs and the Coachella Valley as a whole.

Robin Goins is a business consultant for DR.G Consulting and works extensively in the cannabis industry in the Coachella Valley. For more information, visit www.drrobingoins.com.

Published in Cannabis in the CV

The California cannabis industry is now in its second year of legalization—and excitement within the industry is building. Experts in the Coachella Valley have been diligently preparing their forecasts for 2019—so we decided to ask them what they’re expecting to happen.

One leader in the industry is predicting great things for 2019. Adrian Sedlin, CEO of Canndescent, which has a large grow facility in Desert Hot Springs, is expecting the industry to boom as legalization spreads globally.

Sedlin notes that in 2018, the adult-use cannabis market tripled in population size, and says that as the industry grows with adult use, so will production. He also thinks the political arena is looking better for legalization, as more political candidates are promoting federal legalization.

“Many critics argue that California made a mess of things in its first year regulating adult-use cannabis,” Sedlin said. “(The year) 2019 will prove far more prosperous for license-holders as operating a cannabis business without a license will finally become a felony.” 

The economic potential in the Coachella Valley is huge, considering the amount of open land and the potential for cannabis-industry growth here. Brent Buhrman, CEO of Nationwide Cannabis Funding and president of the Coachella Valley Cannabis Alliance Network, is predicting the industry in the valley “will see an explosion of growth as new cannabis development becomes vertical and operational.” Buhrman also expects real estate in the valley to hold its value, especially with many cannabis investors who were waiting for two things to happen that, well, just happened: the passage of the Farm Bill and the departure of Attorney General Jeff Sessions. These investors are “ready to play ball,” says Buhrman, “and the watchers are now ready to jump into the game.” Buhrman predicts the Coachella Valley will see a new wave of people and companies come forward as a result.

With the industry starting to mature, Sedlin does expect some—no pun intended—weeding out to occur. He foresees stocks changing drastically, and as a result, the “high-profile sackings” of two or three high-profile CEOs at publicly owned cannabis companies.

Other seasoned cannabis entrepreneurs see different transitions on the horizon. Eric Crowe, of Cathedral City-based Mystic Valley CBD, who has been on the forefront of the Colorado cannabis industry for the last 15 years, predicts Coachella Valley happenings will mirror much of what was seen in Colorado. Crowe is predicting a clearing in the industry, which will lead to legitimacy and credibility as well as a surge in canna-tourism. This surge, Crowe states, “will created unprecedented economic growth in the valley, which will include all ancillary business, such as construction, hospitality and all business trades.”

Crowe cautions that lessons learned from Colorado should be heeded as the Coachella Valley cannabis industry expands.

“All industry in the valley, in some way, will come to depend on the cannabis industry, and as it morphs and grows, oversaturation will happen,” he said.

As happened in Colorado, Crowe anticipates the quality and quantity of the goods in the market will reach capacity, which will result in price reductions and many companies closing as a result. Like Buhrman, he predicts this will allow a new group of players to come to the table. Crowe thinks some of the new business emphasis will be on medicinal uses for hemp, specifically 100 percent certified organic growth and production. He expects that the success of some within the industry will depend on new technology; for example, his company uses reverse-engineered sound-wave technology, which focuses on the DNA of the hemp plant in order to produce the highest level of CBD full-spectrum concentrations.

The economic outlook for the cannabis industry in 2019 and beyond looks very promising—but those in the industry will need to change along with the demands of the industry.

Robin Goins is a business consultant for DR.G Consulting and works extensively in the cannabis industry in the Coachella Valley. For more information, visit www.drrobingoins.com.

Published in Cannabis in the CV