Llorn Kylo, CEO of Cannabis-Rx (OTCQB:CANA), a real estate company focused on opportunistically acquiring, selling/leasing real estate, and assisting in the growth of the licensed cannabis industry specific to real estate and financing, today shared his perspective on the opportunities offered to real estate professionals by the regulated marijuana industry. Mr. Kylo’s commentary on the industry is as follows:

The continued growth of the licensed marijuana industry, or the “green rush,” has spawned no shortage of “ganjapreneurs” seeking suitable real estate to operate and capital to grow their businesses.

From grow schools to security firms, producers of ancillary products such as fertilizers and hydroponic lights to branding agencies, these individuals are looking for ways to capitalize on potentially lucrative business opportunities tied to this nascent industry.

The rush to capitalize on an industry that is projected to exceed $10 billion by 2018, according to The ArcView Group, a network of cannabis industry investors, has created excitement among entrepreneurs, real estate owners, investors, and even municipalities, cognizant of the attractive potential tax revenues.

Conversely, the rapid formation of these new canna-businesses has also shined a bright light on the inherent challenges associated with operating in both this highly regulated and scrutinized space, where state and federal laws differ.

The state-by-state patchwork of regulations has created an opportunity for entrepreneurs’ to capitalize on the strong fundamentals driving the demand for properties in the markets that are designated for licensed marijuana operations.

Whether it is a retail store front or a warehouse, what all of these canna-businesses have in common is that they need real estate and capital to operate. This in turn has created a unique opportunity to provide property and financing solutions.

When you strip away all the excitement around these opportunities, a key factor in the viability of most cannabis-based businesses will be identifying, securing and retrofitting the real estate in order to operate successfully.

For instance, the demand for property in Denver alone – which permits both medicinal and recreational marijuana use – is staggering. Currently, marijuana cultivation and manufacturing facilities occupy roughly 4.5 million square feet in Denver, according to commercial real estate information provider Xceligent Inc. This number is expected to grow steadily with continued investments in additional grow operations.

While the demand for space is high, it is well documented that many of these canna-businesses have limited access to capital as the traditional bank accounts, loans, and lines of credit are unavailable to them.

Limited access to funding has made it difficult for these budding companies to acquire buildings necessary to operate or pay the 30 to 40 percent premium, which is being driven by the current supply/demand dynamics and nature of the business to lease space in which to operate.

In addition to simply being able to afford space to operate, another unique challenge these businesses face is finding properties zoned for the licensed marijuana activities. Simply identifying a suitable property with the appropriate zoning oftentimes is not enough. The property often needs to be significantly rehabilitated in order to meet stringent state and city guidelines – adding to costs.

The aforementioned challenges create a major gap that needs to be filled for the licensed marijuana industry to realize its potential. And here is where respected real estate and financing specialists can pool their expertise to fill this gap, effectively serving as “canna-fund” companies.

Canna-fund companies that are well capitalized, understand the nuances of real estate and are familiar with unique requirements for marijuana-based businesses are able to offer ganjapreneurs appropriately zoned and rehabilitated real estate, along with funding to enable them to lease or purchase their property.

For instance, providing attractive terms on sale-and-leaseback financing arrangements with tenant purchase options provides flexibility for the tenant long-term, while efficiently capitalizing their growth and operations.

In turn, canna-fund companies may realize a steady stream of cash flow if the financing arrangements are prudently underwritten.

By providing real estate and capital to qualified canna-businesses, these undercapitalized organizations will have the resources to become financially viable and liquid, resulting in potentially lucrative long-term relationships for everyone.

This is a pivotal time for the marijuana industry – and a groundbreaking opportunity for canna-fund companies.

As laws change, the demand for expertise to make these canna-businesses viable will only increase. Canna-fund companies – or those with a keen vision as to what the future holds – can effectively position themselves as go-to partners for growth and success.

About Cannabis-Rx, Inc.

Cannabis-Rx (OTCQB: CANA) is a real estate company focused on opportunistically acquiring, selling/leasing real estate, and assisting in the growth of the cannabis industry specific to real estate and financing in states where it is licensed or permitted for medicinal and/or recreational purposes. In addition to strategically purchasing properties at a significant discount to replacement cost and rehabilitating the assets to enhance their value, the Company provides licensed cannabis-based businesses with capital and real estate opportunities to advance their growth objectives. Cannabis-Rx also plans to offer consulting services to licensed cannabis growers and operators. The Company does not, nor does it intend to, grow, distribute or sell cannabis. For additional information, please visit www.cannabis-rx.co

Cannabis-Rx, Inc.Phil Denning and Jason Chudoba, 203-682-8200cannabisrx@icrinc.comcannabis-rx.co

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