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Cannabis company sells California town it envisioned as a marijuana resort, but pipe dream isn't dead

Cannabis company sells California town it envisioned as a marijuana resort, but pipe dream isn't dead
A man tends to signs beside a road leading into Nipton, Calif., in August 2017. (Marcus Yam / Los Angeles Times)

Could plans to turn an old California ghost town into a marijuana mecca be going up in smoke?

Cannabis technology company American Green Inc., which bought Nipton for $5 million last year, has sold it to another company in a deal worth $7.7 million, acknowledging that it struggled to raise the money needed to remake the old desert mining town on the Nevada border about 60 miles south of Las Vegas into a pot paradise.

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"Buying and building towns is very cash intensive. Up until now, the cost of attracting capital has been very expensive for our company," Phoenix-based American Green said in a statement this month.

That responsibility, the company added, now falls on the new owner, Delta International Oil & Gas, a Scottsdale, Ariz., company that previously has focused on buying properties for exploratory drilling.

However, American Green says the sale includes the provision that it continue with its project to transform the 80-acre town on the edge of the Mojave Desert into a cannabis-themed resort.

After buying Nipton last year, American Green unveiled ambitious plans that included remodeling its modest Old West-style hotel into a "buds and breakfast" inn and bottling and selling cannabis-infused beverages drawn from Nipton's desert aquifer. There were also plans to attract cultivators and marijuana-themed boutique owners such as glassblowers.

Still other plans called for the company to bring back Nipton's post office and bank and expand its solar farm to serve the town's handful of residents, making Nipton green in more ways than one.

How much, if any, of that has happened couldn't immediately be determined. A clerk who answered the phone at the Nipton Trading Post said he was the only person there but too busy to talk and hung up. A publicist for American Green said she would reach out to Nipton's project manager.

Once a booming mining town served by stagecoach and rail lines, Nipton was a ghost town when Gerald Freeman, a Los Angeles geologist who liked to look for gold in his spare time, rediscovered it in the 1950s. He and his wife, Roxanne Lang, bought it in 1985, and he spent the next 30 years restoring its hotel, trading post and its handful of houses, 10 miles off Interstate 15 in far eastern San Bernardino County.

The couple put it up for sale after Freeman's health began to fail. Lang sold it last year after he died.

Under terms of this month's sale, American Green said, Delta International assumes $3.7 million of American Green's debt and gives American Green $4 million in preferred Delta stock.

Meanwhile, American Green says it signed a contract to continue to develop the town for the next five to 10 years.

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