LSU seeks $11.3M for medical marijuana grow site

Louisiana State University estimates it will need $11.3 million to build a state-approved medical marijuana cultivation complex and run it for about five years, when it expects to start turning a profit.

The venture could open the door for entrepreneurs to own and operate the cultivation center on behalf of the university.

LSU and Southern University, both based in Baton Rouge, are the only two institutions in Louisiana that will be permitted to grow medical marijuana under the state’s medical marijuana law signed in May.

LSU will seek the funding from outside investors and run the program by subcontracting a “production entity” that may own the facility directly or through a third-party property holding company, The Advocate newspaper in Baton Rouge reported. The AgCenter will present its proposal to potential investors on Oct. 28.

LSU’s AgCenter is pitching a grow site in a converted warehouse that will span about 15,000 square feet and contain a greenhouse, lab and production facility, the newspaper reported.

According to the AgCenter’s three business projections, medical marijuana sales won’t begin until 2018. The most modest forecast predicts 2018 sales will be $727,000 and increase to $13.1 million by 2024. The middling forecast anticipates 2018 sales to be $1.4 million and 2024 sales to be $16.1 million. The rosiest scenario forecasts 2018 sales will hit $2.4 million and surge to $20.1 million by 2024, The Advocate reported.

Estimated expenses include $400,000 for a security system, $675,000 for the cultivation areas, and $930,000 for labs, a vault and a 1,000-square-foot research lab, according to the newspaper.