Omni Health Inc (OMHE)

[BubbaInSC]

Worth Reading Again

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City of Hialeah-Omni's location has banned dispensaries while working out their own zoning rules and whether dispensaries will be allowed to operate within city limits. They may opt out completely, and according to various local articles I've read, there's a growing number of moritriums and even entire counties have requested a ban in their communities.

State Lawmakers are still writing the law, so no one knows how this will develop. They have 6 months to write the law and one year to implement it.

There's quite a bit of coverage online on the subject and as far as it's being reported...

There's currently a cap on 7 growers/dispensaries which may increase with more registrants, however the grower's nursery must be at least 30 years old and the nursery business should currently possess at least 400,000 plants.

The fee for a license under the Compassionate Use Act was $300,000 plus $5 million performance bond with a yearly maintenance fee of approximately $50k. The applicant should be able to prove they can manage the huge startup expenses (estimated ~$2 mil) and the bond ($5 mil) to be able to be licensed, however state Lawmakers are still writing the law, so NO ONE can say with any certainty if they'll make it more affordable or continue along the same lines.

My understanding is Florida is a conservative hard line state, and since their Pain mill epidemic that made national headlines for years was erraticated, is facing fierce opposition from opponents...you know -- the "not in my backyard" crowd, and Lawmakers find themselves grappling with similar fears, and therefore less inclined to make this an easy, affordable, or accessible proposition for new dispensaries/growers.

According to Miami Herald coverage Lawmakers have 3 options...

? Create a new set of laws for a larger medical marijuana program with a number of licenses available for growers, dispensaries and others in the industry. (Unlikely)

? Do little or no expansion of the existing program, allowing the current nurseries with marijuana licenses to maintain control of the market. (Likely)

? Do nothing and allow two separate cannabis programs. (Possibly)

One important caveat with jumping into the cannabis space (beside the high start-up costs and needing to be a established 30 year old farm) is common sense...

Omni reported in their recent financials that they use quite a bit of conventional financing, which as soon as they merge into that space, those loans will be recalled and they'll no longer have access to funding in a traditional manner -- unless of course they opt for funding from toxic lenders, which may happen either way since they already have ~1.7+mil debt on the books.