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How the Growing CBD Demand is Impacting Real Estate

Episode 068

John Larson and the Real Estate Cowboys talk passive income real estate investing.

Hear new episodes every Sunday morning at 8 a.m. The Cowboys talk about how the CBD industry is impacting the real estate industry and what opportunities there are for investors.

Keep the #CowboyCoffee hot while listening to John, and the Cowboys talk about how to #BeACowboy and earn passive income in real estate.

Episode Transcript

Keith Weinhold: Hey, this is Keith Weinhold from the Get Rich Education podcast. You are listening to my friend John Larson and the Real Estate Cowboys. Don’t quit your daydream.

Robert Helms: Hey everybody, it’s Robert Helms, host of the Real Estate Guys radio show, and you are listening to the Real Estate Cowboys.

Announcer: Have you thought about becoming financially free through real estate investing, but don’t have the time or knowledge to get started? Welcome to the Real Estate Cowboys podcast. Each week we discuss passive income investment opportunities in the red hot Texas market. John Larson and the Real Estate Cowboys will show you how to leverage their team to build wealth in real estate through passive investment opportunities. And now here’s John.

John Larson: And welcome back to the Real Estate Cowboys. This is your host, John Larson. This week we are going to be discussing how the growing CBD demand is impacting real estate here in the U.S. Many of you may know, uh, ever since the passing of the Farm Bill in 2018, the CBD industry has been booming. While CBD has been under scrutiny by the government previously, it had never before been legalized for mass consumption. Now that regulation hurdles have been jumped, CBD, aka cannabidiol is being added to everything from gummies to breath strips, lotions, even our favorite beverages. Uh, even Coca-Cola is considering introducing a CBD-infused beverage to its line of sodas. So it’s evident that the public really wants more CBD. The demand for CBD is growing exponentially. Almost everywhere you look, retailers are stocking CBD products in response to requests from their customers. I’m seeing CBD stores popping up literally on almost every street corner, even out here in Dallas.

It’s unbelievable. We’re even actually just, I inked a deal earlier this week to open my first brick and mortar retail store. We’ll also be doing some fulfillment out of the back of that store for our e-commerce sales. But it’s amazing. I mean the landlord that I’m renting from, he’s also renting to a CBD company, just down the road actually across the expressway from where my store is going to be. That gentleman’s operating out of 800 square feet and he’s doing $2,800 a foot. So it’s pretty amazing the amount of money and opportunity that there are that there is right now in CBD. And so I just, I know we’re the Real Estate Cowboys, but I want to bring these opportunities to my investors. So you know, you can even find CBD in gas stations, health food stores, supermarkets, and even in your veterinarian’s office. CBD’s benefits for pets have been widely disseminated by pet owners, although veterinarians themselves have been slower to substantiate the benefits. But I give my dog little CBD treats and it really helps him with his anxiety. He’s a very hyperactive dog, he’s six years old. He acts like he’s a puppy still, but he definitely has anxiety, separation anxiety. I give him the CBD treats and it really seems to calm him down. So I’m a really big believer in it for, for pets as well. You will see that many veterinarians do stock CBD-infused pet products though, just simply to consumer demand because more and more people are finding out that it really is helping out their pets. And so what are the benefits of CBD? You may be asking yourself and some people I’ve heard they’re like, I think it’s a placebo. I just don’t really think it helps me. You may not be taking enough or high enough potency. You could be dealing with a product that really is not CBD-infused. It’s just possibly hemp oil. There is no CBD in there. So many people get confused about that. Just because it says hemp oil on the product does not mean it contains CBD. Okay. But the benefits of CBD range from relief from anxiety. It’s minimized epileptic seizures, helps with sleep, relief from joint pain. Many, many other things. But definitely I have seen that it helps with, for me, uh, with, with sleep for sure. Definitely with anxiety. Just getting through the day and, and like I said, it’s really, really been helping my pet. So definitely see the benefits when it comes to CBD firsthand. The scientific community though is struggling to keep up with all the claims. While study after study comes out proving that CBD has medicinal use. In fact, at least one pharmaceutical drug lists cannabidiol as one of its main ingredients. So something to look at.

So how has CBD produced? I believe a lot of people are kind of wondering that, asking those type of questions. You know, CBD infused products and CBD oil are produced from the hemp plant and agricultural crop. Okay. Hemp is grown on farms the same as any other crops like corn or soybeans. When the hemp is ready to harvest typically around October in the U.S. and may be processed to create biomass or dried to extract the oil to make CBD oil. If you’ve been following the Real Estate Cowboys, American Real Estate Investments and myself, you’ll know that we got involved in the CBD industry and we actually did a private money raise for CBD equipment extraction equipment for ourselves, which is just about to come online, two facilities in Colorado and we are prepped for the harvest. We’re pretty much right on schedule and so we’re very, very excited about that opportunity.

We’re very, very excited about the opportunity to pay back our investors quickly on that money raised. Just finished out a raise for three more extractors just like ours for my attorney who also has a processing facility, a very large processing facility up in Kansas. He’s probably going to have one of the larger processing facilities in the U.S. at this point because he’s going to have a total of four machines once he has these next three delivered. So that’s pretty much how it is processed though. You have to go through an extraction step. After the Farm Bill was passed, it made it legal to grow hemp pretty much anywhere in the U.S. and really boosted the agricultural economy. So a lot of farmers got involved in growing hemp. So I do believe there’s going to be a very strong bottleneck coming into this year’s harvest where you’re going to see a lot of hemp biomass on the market and not enough extraction solutions. And we saw that. So we took advantage of that opportunity in that bottleneck to where we’re going to be able to charge somewhere around $20 to $25 an input pound on tolling agreements, uh, with farmers and people that have access to biomass to process that raw plants into the oil that then goes into the products that everybody’s seen popping up everywhere today.

Now let’s get into how real estate and the real estate industry is impacted by the growing demand for CBD. Okay. And this is the exciting part for real estate investors. You know, due to the increased demand for CBD products, farmers are under pressure to produce more hemp crops. And so in order to do that, they need land to do it, right. So once the crop is ready for harvest, manufacturing facilities are needed to do the pre-production stage for CBD-infused products. And for CBD oil, like we have. These are both land-intensive operations and you need a lot of land to grow hemp, you’re obviously going to need land to put a building or a building itself to put in equipment to process and do the manufacturing. And so, therefore, there is a growing demand, not only for CBD itself but also for the land and facilities to produce and process this biomass. And this demand has led to many more investment opportunities for those interested in real estate. There are many ways to get in on these related opportunities. So if you’re sitting there wondering, how can I invest in the CBD industry land purchase, if you want to take the private lending route, you could do that, which is very, very passive and you know, our private lending opportunities on our CBD raises are yielding our investors 12% annually fixed.

So really, really strong returns there. Um, and then I imagine more and more CBD companies are gonna start going public. So there’s opportunities there, um, on the stocks, on the stock market to, you know, get involved in investing in some growing brands, growing companies. Private lending, on processing facilities. I think right now is a great way to see substantial returns and really safe investments because of the amount of money that these machines yield. It’s, it’s insane. The cashflow is very predictable so you know what you’re going to get out of the machine once you turn it on. And as long as you have connections in the industry and access to bio-mass, there’s really no way you can lose. You know, a raise for a machine might be somewhere around a million to 1,500,00. You’ll make that back once you turn those machines on, which takes some time, there’s lead times to get the machines built and shipped to you and set up in your facility.

Once they’re turned on and dialed in, you can make 1,500,000 back in one month. So I believe due to that, these opportunities are very, very safe. And like I said, we’re yielding our investors 12%. So other CBD related processing opportunities exist at other companies as well, right? With private money lending, you could act as the bank, lending money and getting predetermined payout on a regular basis and often with double-digit returns is very, very attractive to my investors who are really just seeking cash flow, monthly cash flow and you know, supplementing income, replacing income, whatever it may be. There’s huge opportunities here and especially through a self-directed IRA or 401k which we talk about a lot.

So let’s say you want to go to the land investment route. If you want to get in on the growing side of CBD, you can invest in farmland. Like I said, you could buy farmland for growing hemp and lease it to a farmer who can’t afford to buy the land himself. Or you could go buy an existing farm and take a percentage of the profits for yourself. There’s a lot of opportunities there. And then think about the commercial side of things. You know, commercial retail investments. As I mentioned earlier, CBD products are flying off the shelves and CBD retailers are eager to set up shop in commercial spaces around the country. Even myself, just opening my first store and I’m seeing them pop up everywhere and I’m sure people who are listening to this show are seeing CBD stores pop up all over their towns, right? So think about it from that standpoint. Commercial retail space has really never been so popular. You could buy a commercial space and lease it to a CBD retailer whom you know is going to have plenty of business to pay your rent, right? That’s a pretty safe tenant to have in there at this point because that product is just in such high demand. I believe, you know, the CBD industry has been likened to the next gold rush and it is upon us and the time is now to get started in the growing market. So if you’d like more information about private money lending opportunities with CBD, please get in touch with us today. You can contact us through our websites, or the once again, just put your information in there. A member of our team will reach out to let you know the opportunities that we have right now. We don’t just have opportunities with CBD, we still are very active in the real estate market. I will not turn down a good real estate deal. It’s just in the nature of today’s market real estate deals are hard, very hard to come by. Good, good real estate deals.

So if you’re interested in learning more about becoming a private lender or working with us here at American Real Estate Investments and the Real Estate Cowboys, like I said, the best way to get in contact is just to go to our websites type in your info and we will get in touch asap. If you want to learn more about this passive income in general, how to generate passive income in real estate check out my book. It’s on Amazon. Very short read. It was designed that way. Just something to give you a good basis on how to earn passive income in real estate. You get that on Amazon. It’s The Passive Income Guide: What’s Your Return on Life by John Larson. Check out that book? Or you know, if you just would like to learn more about real estate investment opportunities, opportunities in the CBD industry, if you go to either one of our websites and there’s tons of content on there available to you and it’s free content, so take advantage of it, but that’s all we have for this week. This is your host, John Larson signing off. Always remember what’s your return on life. Have a great week everyone. Seen it next week.

Announcer: All opinions expressed by the host of the show are the opinions of American Real Estate Investments LLC and do not reflect the opinions of guests or sponsors. No personal or professional advice on this program should be considered an endorsement to follow a real estate financing or investment strategy. Before acting on any information, seek advice from your financial tax, mortgage or real estate advisor, as the information is not guaranteed and investment strategies have the potential for profit or loss.