The Nevada MMJ Opportunity: An Interview with Greg Obbink

Nevada is often mentioned as one of the more attractive opportunities in the medical marijuana space.  Our webinar with Rob Hunt, President of GrowLife Hydroponics (PHOT) earlier this week confirmed this.  For those who missed it, the presentation and Q&A or a 8-minute synopsis are available at your convenience.

Greg Obbink is like many young entrepreneurs chasing the Green Rush.  He and his company Lvl Up Management, where he serves as CFO and Chairman, are pursuing the opportunity in Nevada, and I thought his perspective could help us to better understand the landscape.  Please note that while his company is pursuing capital, this should not be construed as a solicitation in any manner.  The interview closes with Greg's contact information should you wish to learn more.

How did you get involved in the medical marijuana market?

The excitement of anew sector being added to the economic system is the primary reason why the consideration was made to actively pursue such a venture.  Any time such a change takes place, it offers such an opportunity for a much smaller player to enter into a market and become highly successful.  As industries form and plateau, economies of scale take place and usually create a significant difficult barrier of entry. Another reason why our group is pursuing such a venture, is the oligopolistic market that is essentially being created by the State of Nevada by placing a numerical limitation on the amount of dispensaries allowed to operate. We believe that entering into such a market will allow us to specifically define our competition and through proper strategical measures become an industry leader early on.

Tell me more about your company and the other people involved?

Lvl Up Management Group is an asset management and business development firm.  The two companies that we are currently working on developing are a medical marijuana cultivation facility, The Green Grow, and a medical marijuana dispensary, The Herbal Centre.  The people currently involved are myself and Jeff Ho, as the primary shareholders and developers.  We are also being advised by Jim Travis, an industry expert who currently operates a successful cultivation facility in a neighboring state.  Rod Obbink, who has operated a successful construction company for over 3 decades, will assist in the buildout of the cultivation facility.  Lvl Up Management Group also is receiving legal guidance from Derek Connor of Connor and Connor PLLC.  Derek Connor is actively involved in the industry and the legislation.  He is advising our group on the licensing process as well as the legalities concerning the industry as a whole.  Lvl Up Management Group is also currently in negotiations with a dispensary operator for a seat on the board, as well as a horticulturist and a medical doctor.  As you can see, we are filling positions on both the board and advisory committee with individuals who have demonstrated knowledge of the medical marijuana industry as well as individuals who have successfully launched and operated industry focused businesses.

So, what's the opportunity in Nevada and the expected time-line for the licensing process?

 According to Senate Bill 374, in Clark County, Nevada, there will be 40 issued licenses or certifications for dispensaries. This will be based on an application process.  The application considers several merit criteria points and the understanding is that those businesses that are able to fulfill the requirements set forth will be the ones receiving the certification for operation.  As far as the certification for cultivation, The State is still finalizing the number of licenses to be issued, further, they are also discussing the amount of plants allowed to be cultivated per facility. Without any further delays, it looks as if the State will open up the application process in April of 2014. After the application window is open, those pursuing will be given 14 days to apply before the window is closed.

Nevada has four different types of licenses.  What are they, and which ones are you applying for?

The four licenses being issued are cultivation facilities,dispensaries, edibles, and quality testing laboratories.  Lvl Up Management Group, Inc. is actively pursuing both cultivation and dispensary.

What's the rationale for being both a dispensary and a cultivator?

  Originally, the group was only considering pursuing a retail dispensary.  However, as we began to research the market n States that had already established a legal framework for the distribution and use of medical marijuana, we discovered that one of the significant risks associated in this sector was the lack of sufficient product at the retail level.  To eliminate the aforementioned risk we decided that pursuing both licenses would allow us to control the market from seed to sale. This strategy also ensures quality consistency at both levels.

What are some of the things that are important to Nevada when reviewing the applications?

Presently there are several criteria of merits being considered for certification, they are as follows:

  1. The total financial resources of the applicant, both liquid and illiquid;
  2. The previous experience of the persons who are proposed to be owners,officers or board members of the proposed medical marijuana establishment at operating other businesses or nonprofit organizations;
  3. The educational achievements of the persons who are proposed to be owners, officers or board members of the proposed medical marijuana establishment;
  4. Any demonstrated knowledge or expertise on the part of the persons who are proposed to be owners, officers or board members of the proposed medical marijuana establishment with respect to the compassionate use of marijuana to treat medical conditions;
  5. Whether the proposed location of the proposed medical marijuana establishment would be convenient to serve the needs of persons who are authorized to engage in the medical use of marijuana;
  6. The likely impact of the proposed medical marijuana establishment on the community in which it is proposed to be located;
  7. The adequacy of the size of the proposed medical marijuana establishment to serve the needs of persons who are authorized to engage in the medical use of marijuana;
  8. Whether the applicant has an integrated plan for the care, quality and safekeeping of medical marijuana from seed to sale; 
  9. The amount of taxes paid to, or other beneficial financial contributions made to, the State of Nevada or its political subdivisions by the applicant or the persons who are proposed to be owners, officers or board members of the proposed medical marijuana establishment; and
  10. Any other criteria of merit that the Division determines to be relevant.


What are some big differences in the way Nevada is going about licensing compared to other states?

The most significant difference is the limitations on then umber of dispensaries allowed to operate. This number is determined on population figures, and as stated before,Clark County is being set at 40.  Another big difference is the perception of the industry by the general public.  Our interpretation from the legislation written in the Senate Bill is Nevada is really trying to make sure that medical marijuana is viewed as a form of medical treatment for patients, and as such,The State wants those businesses involved to demonstrate professionalism and follow the same guidelines that Pharmacies must abide by when considering signage, marketing, etc.  The State is looking to avoid some of the negatives connotations surrounding the market that many other medically legalized states are suffering from currently.

What aspects of the process have been most frustrating?

 Probably the most frustrating aspect of the process so far has been the clarification of rules and guidelines set forth by the State, and local jurisdictions.  According to our legal counsel, it seems that the final legislation will be set by the end of the year.  With this final legislation, our group will be able to implement a more defined strategy moving forward. 

I know that you guys are looking for outside investors (through a Reg D filing).  How can potential investors, who I believe must qualify as"accredited", learn more?

 We are currently seeking capital through a regulation D private equity offering.  We are searching for accredited investors that will realize return through dividends as operations commence.  Investors can learn more about how to become involved in this exciting venture through our contact page at our website www.lvlupmanagementgroup.com

Thanks so much, Greg!  Good luck with the process and please keep us informed of your progress.

Posted to Benzinga PotProfits on Dec 18, 2013 — 5:12 PM
Comments ({[comments.length]})
Sort By:
Loading Comments
No comments. Break the ice and be the first!
Error loading comments Click here to retry
No comments found matching this filter
Want to add a comment? Take me to the new comment box!