Real Experiences
in Real Estate
Curators of Kind Hotels
Real Experiences
in Real Estate
About Us
Investors and Developers of Hybrid-Use Hotels
HBU Canna Co. is an investor and developer of cannabis lifestyle hotels. Our investment criteria are centered around hotel real estate with a cannabis lifestyle component. We strongly believe that a hotel with an active cannabis program will drive departmental revenue for the hotel and significantly improve a overall RevPAR penetration. We also expect that a well-managed cannabis lifestyle hotel will attract institutional investment and realize a lower cap rate on exit, not dissimilar to full-service hotels.
HBU Canna Co. is actively seeking hotel assets greater than 100 rooms in the Northeast markets with legal recreational cannabis.
Why Serve it up Now?
The concept of "Cannabis Friendly" hotels has been around for a long time, primarily focused around on-premises use only. HBU Canna Co.’s strategy integrates cannabis as a departmental profit center of the hotel and addresses the operational constraints imposed by the regulations (regs).
So why 2023? Several reasons... after many years of growth for the cannabis sector, we are now entering the perfect storm of events driven by recreational legalization and latent demand for cannabis. Licenses are rolling out across several northeast states, providing availability of legal cannabis to 50 million people and over a 100 million visitors per year.
Highest and Best Use
When we conceived the idea for a hybrid-use cannabis hotel, we wanted it to appeal to institutional investors across the real estate, hospitality and cannabis sectors. We believe a well-managed hybrid-use hotel will provide higher returns and lower risk for the investor. There are four criteria to achieving the highest and best use. The overall development must meet this criteria.
- Legally permissible - location must allow for recreational cannabis
- Physically Possible - the building needs to adapt to legal regulations
- Financially Feasible - Minimum underwriting requirements
- Maximally Productive - The highest return expectation
Weighing the Risk
The hospitality business is considered high risk. The cannabis business is also high risk. Real Estate is a relatively safe investment. Individually, each business model can provide ample returns based to investor's requirements. We believe that the combination of all three subcomponents will amplify the returns while lowering and mitigating risk when compared to hotel investments without a cannabis component. Each subcomponent compliments the other and provides mutual benefits.
This begs the questions... Where and how do we find, acquire and entitle a hotel to achieve these maximum returns. HBU Canna Co. has created a business model that navigates the barriers to entry and develops thoughtful guest focused strategies on operations. Following acquisition and development, we turn our focus on operating the hotel and implementing an effective and customized cannabis strategy. As with most real estate, the disposition strategy becomes as important as the acquisition, development and operation.