Arizona’s American Green purchases Southern California ghost town for $5 million, intends to develop a cannabis tourism destination in the Mojave Desert.
BY ED MURRIETA
A publicly traded cannabis company has purchased an Old West ghost town in Southern California for $5 million and plans to turn the historic Mojave Desert hamlet into a cannabis tourism destination and cannabis production hub that taps the 80-acre town’s ancient underground lake and modern solar power.
Nipton, located 10 miles off the main highway between Los Angeles and Las Vegas, is a 112-year-old former mining town of approximately 20 residents in unincorporated San Bernardino County, about 3 hours east of Los Angeles and 1 hour south Las Vegas, a mile and a half from the California-Nevada border.
The buyer, American Green Inc. of Phoenix, hopes to develop what it’s likening to Disney on cannabis — the Epcot Center of Pot — offering cannabis-friendly tourist attractions, manufacturing and retail outposts, culinary events, bed-and-breakfast lodging, RV camping, artist-in-residence programs and mineral baths spiked with therapeutic cannabis.
Stephen Shearin, general manager of American Green’s Nipton project, expects to host Nipton’s first cannabis tourists in November.
“The infrastructure is there. All we have to do is open the doors,” Shearin said. “We’re here to show that, properly regulated, you could have a city and a cannabis destination that’s a benefit to county, state and federal government.”
The purchase of a historic town by a company in an upstart industry — California’s recreational cannabis market won’t begin until 2018 and Nevada just joined the ranks of four other states selling recreational cannabis — marks a new milestone in pot’s inexorable embrace by the mainstream.
“It’s hugely significant because you have a brand-new player — meaning it’s not a lodging company — who is coming out and putting their stake in the ground, saying, ‘We are a cannabis destination,’” said Pamela Johnston, a senior vice president at Electrum Partners, a Las Vegas investment consulting firm specializing in the cannabis industry. “This is sending quite a signal to existing tourism entities that have a very structured way of working.”
No Comment from Tourism Industry
Barb Newton, president of the California Travel Association, referred Leafly’s request for comment to the president of Visit California, Caroline Beteta, who also would not comment.
“Unfortunately, Visit California is not in a position to comment on the the story,” Visit California public relations director Jennifer Sweeney said in an email. “It’s too early to tell what impact marijuana tourism will have in California. We’re still watching and monitoring how the state will choose to implement and regulate Proposition 64.”
Contacted on Friday, a day after Nipton’s purchase was announced, Monique Carter of San Bernardino County’s Economic Development Agency, which oversees the county’s tourism marketing, declined to comment on Nipton and cannabis.
“The Economic Development Agency has not studied the economic impacts of the cannabis trade or tourism, or the value of the aquifers in Nipton,” Carter wrote in an email. “Unfortunately, we don’t have any data to share with you at this time.”
Geoff Hinds, CEO of the state-operated San Bernardino County Fair, said popular cannabis festivals like Abracadabs and Chalice have had an economic impact “into the millions” in San Bernardino County since 2016.
“These events at the fairgrounds impact the community by bringing in tourists and tourist dollars,” Hinds said. “People spend money not only at these cannabis events but at gas stations, hotels and restaurants.”
Even though Nipton is on the far eastern side of San Bernardino County, the largest county in the nation, Hinds said Nipton, as a popular cannabis destination, could help economies beyond Nipton.
“We may not be directly impacted by the destination,” Hinds said by telephone from his office in Victorville, two hours west of Nipton on Interstate 15, “but the route of tourism takes people directly through the county. I think that’s important.”
Johnston, who previously worked as the director of marketing for for tourist websites Vegas.com and LasVegas.com for seven years, wasn’t surprised by California tourism officials’ unwillingness to comment on Nipton’s cannabis tourism plans. Johnston said tourism officials in legal pot states like Colorado, Oregon and Nevada “aren’t spending tax dollar money for their tourism programs because they’re still attached to prohibition and they’re afraid of stigmas and power dynamics of the prohibitionists.”
Meanwhile, Johnston said, consumers are clamoring for cannabis experiences whether it’s on a sandy beach in Jamaica or the scorching Mojave Desert sands of Nipton.
“I don’t think it matters where it is,” Johnston said. “I think Nipton will do well by nature of what it is.”
Johnston said packaging cannabis vacation themes — joints around the campfire, cannabis-centric food and art, and in Nipton’s case, cannabis in the drinking water and in the spa water — “allows consumers to have multiple and elongated experiences, which is what consumers want in travel and entertainment to begin with. They want heightened experiences. They want amazing experiences. They want memorable experiences. You’re gonna start seeing those experiences all over the Caribbean and among hipper boutique hotels in bigger cities.”
‘Duplicate This Over and Over’
This is American Green’s first hospitality play. To date, American Green’s business interests have included cannabis cultivation, manufacturing and extraction, retail and biometric age-verifying dispensing machines.
American Green’s purchase of Nipton culminates a years-long effort to locate and purchase a town in which American Green can influence and control the local government, establishing regulatory and business models that can be replicated in other towns it hopes to purchase and control in other legal cannabis markets and tourist-friendly areas in the United States.
Shearin said American Green identified nine cities in seven states — including Tiller, Ore.; Bedrock City, Ariz.; Hell, Mich.; and Stoner, Colo. — and evaluated each on factors like legalization, population and political climate.
“Nipton wound up being the most favorable to execute on our goals,” Shearin said. “The plan is to prove the concept here, and as soon as we know we’ve done the right thing we will duplicate this over and over until it catches on nationwide.”
But there’s a hitch: San Bernardino County, which governs unincorporated Nipton, bans all cannabis businesses — including growing, processing, retailing.
Shearin said American Green will seek to incorporate the town and puts its own pro-cannabis ordinances in place, or possibly seek a variance from the county.
“We wanted our own town that embraced appropriate regulatory actions,” Shearin said.
The deal includes a small adobe hotel built in 1910, two historic houses, a cafe, a schoolhouse, RV camping spaces, four rustic eco-lodges and 40 additional acres of land 3 miles from Nipton that the new owners plan to use for staging and storage during Nipton’s expansion and eventually for housing for 2,000 workers that Shearin said Nipton and its projects will employ when fully developed.
Shearin said American Green will invest about $2.5 million to develop Nipton to its full potential, which will include new and expanded lodging, edibles and infused products manufacturing facilities and a bottling plant that will monetize Nipton’s Pleistocene=era aquifer, infusing the pristine water with CBD, the therapeutic cannabinoid that soothes pain and anxiety without producing mind-altering highs.
“That’s a million-year-old aquifer and the water is very pure and drinkable,” said Tony Castrignan, a Las Vegas real estate broker who represented the seller.
Although its exact size and capacity is unknown, Shearin said Nipton’s aquifer measures “several hundred million acre feet” — an invaluable natural and political resource in the parched West.
“Its capabilities go beyond our wildest dreams of growth,” Shearin said.
Nipton already is a tourist destination, popular with naturalists, bikers and Europeans.
“People come from all over the world,” Castrignan said. “Nipton’s the gateway to the Mojave National Preserve. People stay here to explore the desert lifestyle.”
With plans to purchase a train that will run from Los Angeles to the railroad depot in Nipton that serviced gold miners and cattle ranchers a century ago, Shearin said American Green can ship Nipton’s edibles and bottled water and broaden Nipton’s appeal to international tourists seeking authentic American experiences.
“Let’s say you flew from Germany to see the Old West,” Shearin said. “What would you do? Drive around hoping or jump on the Nipton Express?”
Dreams of Power Independence
Nipton has a rich history as a mining town and social hub in a sparsely populated region. Silent-era movie star Clara Bow owned a ranch nearby and stayed at local hotel.
Nipton today is the unlikely dream of Gerald Freeman, a Malibu gold miner who bought the ghost town in 1984, intent on turning the tiny town into a community running on clean power entirely of its own making. A solar array left behind by a company that went bust continues to produce energy for the town’s needs and generates enough to sell back to the grid. Freeman died last year at age 84.
The region has attracted other solar companies, including Ivanpah Solar Electric Generating System, which operates on 3,500 acres of Bureau of Land Management land across from Nipton.
“Our interest is in forwarding Gerald Freeman’s vision and being able to sell power back to the state of California and being a glowing representative of a town’s that’s energy independent,” Shearin said.
Shearin said American Green intends to expand the existing solar farm and make Nipton a model for the cannabis industry’s role in stimulating and accelerating the rebuilding of struggling economies in small towns throughout the United States where cannabis has been legalized.
“Infrastructure. That’s the deity of commerce,” Shearin said. “That’s what American Green wants to set as the goal for other parts of America, whether it’s cannabis or something else: Utilize your area, respect the inhabitants and grow with the surroundings with regulations and proper administration. We want to be a shining example of people saying, ‘We should do that here.'”
Bloomberg reported that shares in American Green, which was founded in 1998 and has traded over the counter as a penny stock under the name ERBB, jumped in value by more than 40 percent after the sale was reported Thursday but its shares are still worth well below 1 cent. Following a rally in 2016 spurred by more states legalizing cannabis, American Green had lost about half its value this year through Wednesday, Bloomberg reported.