Green Horizons begins construction on 1-million-square-foot campus in Southern California, bolstered by special tax rates and cost-effective utilities
The Green Horizons vision for California’s Coachella Valley is as simple as it is expansive. With the first step in its plans for a 1-million-square-foot “canna-campus” now under construction, Green Horizons hopes to make Coachella the “epicenter of global cannabis.”
The first-of-its-kind facility, a combination state-of-the-art greenhouse and connected brand development operation, is a partnership between lawyer Carlos “Los” Arias, California real estate mogul Michael Meade — both of whom also have years of experience in the legal cannabis space — and fashion icon Tommy Hilfiger. According to Arias, the company’s CEO, the goal is to use the facility to produce top-shelf cannabis for less than $300 a pound, and then package and sell the product through premium lifestyle brands that can be licensed throughout the world, with Hilfiger playing a key role in the brand-building enterprise.
“That brings a lot of credibility to the brand side and a million square feet is nothing to sneeze at,” says Arias. “So we have ample square footage there to really befit our vision.”
The company also hopes to use its size and influence to help Coachella — which lends its name to the world-famous music festival that is actually hosted by neighboring Indio — become the “Napa Valley of the South” for cannabis, a pitch that led to a sweetheart tax deal that gives Green Horizons a distinct financial advantage over rivals throughout the state.
“What’s really interesting about Coachella is they were really hip to the idea and love the vision,” Arias says. “Michael came in with millions of dollars, he bought a million square feet of real estate and they worked with him hand-in-glove.”
Power, water and taxes
The goal for the new Green Horizons facility in Coachella is to “produce premium cannabis at greenhouse cost,” according to Arias, and the location is key. Arias says Meade, the company president, saw that vision six years ago when he purchased more than 20 acres of property in the desert.
“His thesis was simple: You’re going to need scale in a municipality that can deliver on the core segments that contribute to a low cost for infrastructure, specifically, power, water and taxes.”
By working to convince the city that cannabis could help monetize the “global brand” (the city sees no revenue from the music and arts festival in Indio), Arias says Meade was able ensure the property was properly rezoned and that the city brought sewer lines to it. Though there is a well on site, Meade also entered an agreement with the Imperial Irrigation District to supply the land with Colorado River rights as well as power. According to Arias, the IID agreement gives the company 25-30% savings compared to competitors on Southern California Edison.
Finally, Meade was able to secure a 2% flat tax across the board for the entire development as part of “spearheading the zone.”
“So our competitors around us, even in the city of Coachella are paying a lot more in taxes locally,” Arias says.
Cultivation
On top of those advantages, Green Horizons’ new facility, which began construction in April, is designed to further keep down costs. The first phase of the Green Horizons campus will consist of a 101,787-square-foot, sealed greenhouse with automated light deprivation. Phase II adds an additional 125,000 square feet that will serve as the company’s corporate headquarters as well as its brand incubator, along with additional light deprivation greenhouse cultivation space, all designed to capitalize on the region’s 300 days of sunshine each year.
Arias and Meade were partners on a previous project called Desert Horizon, an indoor “ultra-premium craft cultivation operation” in Cathedral City.
Arias, who says there is a “long lineage of shamanism” on his Brazilian mother’s side, says cannabis has been part of his life since he was young and he has developed a green thumb for growing cannabis. While still in law school, Arias was involved in a cannabis operation in Colorado with a friend, helping raise money for the project in exchange for equity in the company — RiverRock — and the promise of personal lessons in the cannabis industry, often shuttling back and forth between Denver and law school in California.
After being connected with Meade, who had previously secured a cultivation and retail license in 2006 as part of California’s medical industry, Arias says they became “fast friends” and Meade told him of the vision for the Coachella project. The pair began their partnership in 2018 with the 20,000-square-foot indoor cultivation facility in Cathedral City, funded though money raised by Arias from the same investors that backed his Colorado operation, which they exited in 2021 to focus on Green Horizons.
House of Brands
The final piece of the puzzle to bring the whole Green Horizons project together is the “house of brands” to be supplied by the cultivation facility, through both licensing deals and new brands created in-house, all of which is owned by the company.
That’s where fashion icon Hilfiger comes in.
“Tommy obviously has his participation in those brands too, vis-à-vis his ownership in Green Horizons; he’s a co-founder and a partner,” Arias says. “We have him and his team meticulously involved, helping curate what this next generation of brands could look like.”
Hilfiger is responsible for the company’s first brand partnership, with an existing apparel brand from the 1970s and ‘80s with a “rebellious” history that Arias says has always “winked” toward the cannabis culture. Though still embargoed until later this year, Arias has been wearing the brand to cannabis events to see what the reaction from the industry would be and says the response was “overwhelming” and positive.
Taking “a page from the Cookies book,” Arias says a deal has been worked that will give Green Horizons the rights to the brand for cannabis, as well as getting a cut of sales from the projected boost the clothing line should get from its new cannabis line, expected to be launched this fall.
The team has also created the company’s first in-house brand that pays homage to the Coachella Valley, anticipated for summer 2023, Both brands will be grown with proprietary genetics bred by Green Horizons, something the company anticipates to be a “differentiator” for its entire portfolio.
Altruism
Because both Arias and Meade are cancer survivors who used cannabis during their treatment and recovery, Arias says they are driven by more than money and want to further the message of plant medicine in the larger conversation.
And with a prime location, low-cost utilities and a city willing to support their endeavors, Green Horizons hopes to be part of that movement for a long time to come. Arias says there is also a heavy social justice component to the Green Horizons goal.
The company is partnering with the city of Coachella in launching the “Build the Valley Initiative,” which will consist of two prominent initiatives: first, building infrastructure for the community; and second, advocacy for expungement and job creation for which Green Horizons will create a dedicated Coachella Valley program.
“And that’s really our secret sauce. What moves us is more altruistic than capitalist,” Arias says. “Our entire thesis and, personally, why I wake up every day and work as hard as I do, is that this industry is going to prove to be the gateway medicine to all of the other medicines.”