In November 2016, Dan Osborne voted “no” to Proposition 64 in California, the measure to legalize marijuana for recreational use.
He smoked pot in high school, but that was a long time ago, and his perspectives have changed. “I’m a dad and a grandpa. So we’ve got a responsibility,” says Osborne to Marcus Lemonis in CNBC’s special episode of “The Profit,” “Marijuana Millionaires,” airing Aug. 10.
Prop. 64 did pass, however, and goes into effect on Jan. 1, 2018. (Currently, marijuana is legal for medical purposes in the state.)
Despite Osborne’s personal views, he knows the legislation is going to be good for his wallet. That’s because Osborne, 55, is heavily invested in weed. He has already spent $16 million building indoor growing facilities in Desert Hot Springs, Calif., a sleepy town that is going through a revival thanks to its decision to allow indoor pot farming on an industrial scale.
His company, CLC Brand Labs, which he founded in 2016, sells marijuana to medical dispensaries. “Especially when it becomes legal — recreational — there’s gonna be a lot of demand. It’s gonna shoot through the roof,” he says. At that time, he will also sell to recreational retailers.
Osborne is readying himself and his business for the surge. In fact he recently paid $3.8 million for 3.8 acres of land to bolster his growing facilities. He knows $1 million an acre is way over market price.
“Are you just not good at real estate?” Lemonis asks Osborne.
“No, I’m good at investment,” he says. The profit margins on growing and selling marijuana are so high, he’s confident he will make back the money.
Osborne expects his growing facilities to reap $22 million in 2018. He’s on a five-year plan to complete building out 170,000 square feet of indoor growing space. And when he is done, he expects to be bringing in $35 million a year in profit.
That’s good business. But it’s also taken a toll on his personal life.
Before he decided to cash in on the cannabis craze, Osborne was a minister for eight years in Salt Lake City, Utah (though he’s not a Mormon). His conservative family does not approve of him working in the marijuana business.
“My son-in-law won’t even talk to me because I’m in this business. He’s a pharmacist in Utah. And he’s so against this,” Osborne says. He’s not included in Thanksgiving celebrations and he doesn’t get to see his grandchildren.
“That’s tough. That’s tough,” Osborne admits. “But when the kids grow up, when my grandkids grow up and they find out that their grandpa is in the medical marijuana business, I don’t think they’ll be surprised. They’ll like it.”
Regardless, Osborne has no intentions of slowing down.
“I’m gonna ride this business out until I sell,” he says.
Osborne’s goals with CLC Brand Labs are very clear. He wants to build the company until he can sell it for $120 million. According to business guru Lemonis, that’s not a high price tag for a business doing $35 million in profit.
“Well — I’m not — I’m not a greedy person,” Osborne says.