Lucky's LeafsOne senior secured facility, first lien on entitled cannabis land, sized to carry itself to first harvest.
Acquisition and Year-0 site development of a ~17-acre entitled outdoor-cultivation parcel at 2100 Belvidere Road, Harmony Township, Warren County, NJ — under a letter of intent countersigned by the seller on August 10, 2026 at $2,495,000. Structured the way a cannabis real-estate bridge is written: interest-only, full interest reserve funded at close, repaid from the first harvest with a land-secured backstop.
Lend against the widest cost-to-price spread in the market.
New Jersey is one of the country's most supply-starved cannabis markets: wholesale flower printed $2,391/lb as recently as September 2025, more than double the U.S. index, and as of late 2025 the CRC counted just three fully-outdoor farms in the entire state. Nearly every NJ operator is locked into expensive indoor warehouses because their town won't permit sun-grown canopy.
This parcel sits in the rare town that permits it, and already carries municipal cannabis approval. The borrower grows at an outdoor cost base near $200/lb and sells into indoor-scarcity pricing. For a lender the spread is the repayment source, and it is structural: at the conservative $250/lb grow cost the crop's cash break-even is ~$290/lb — roughly an eighth of NJ's last print. Price compression is not a surprise scenario in this file; it is the base assumption. 2026's record declines are already modeled: the base case prices at the market's own structural floor, and the conservative case strips New Jersey out of the price entirely.
The repayment case is underwritten at $900/lb blended — the market's structural floor (indoor marginal cost plus the $40/lb excise), ~38% of NJ's last print. Every scenario carries the excise. The conservative case prices at $450/lb, the U.S. outdoor index with zero New Jersey premium.
Sized to your structure with flexible terms.
The plan itself is $3.73M. We have built the request the way we expect your term sheet to read: proceeds fund acquisition, site development and soft costs, plus origination and an interest reserve covering every payment through maturity, so no debt service depends on operations before harvest receipts. Pricing below is illustrative; your terms govern.
Sizing formula: net proceeds ÷ (1 − points − rate/12 × months). If your reserve convention or pricing differs, the facility resizes mechanically — the plan underneath does not change.
67% of net proceeds is the land. No expansion capex is carried on borrowed money — the plan replants the same 150,000 sq ft outdoor field each season.
The plan does not depend on a single source. The seller's public listing offers owner financing (the listing capture is in the data room, 2.6), and a sponsor equity layer is forming alongside this request. A seller-carried junior piece behind your first lien, or a smaller senior sized to your LTV, both work — the net project underneath does not change.
A billion-dollar sealed market; a model that is based on conservative market prices.
Demand has outrun supply since adult-use launched in 2022. Operational cultivators roughly doubled in late 2025 — about 24 to 46 — and 2026 brought record price declines. That compression is already in this file's numbers: the base case is the structural floor, and the conservative case is the U.S. outdoor index with zero New Jersey premium.
Two structural facts protect the repayment price. New Jersey is a sealed market — federal law bars interstate imports, so cheap Western outdoor can never undercut a NJ grower; every pound sold in NJ is grown in NJ, and today just three farms grow it under the sun. And in supply-short East-Coast markets sun-grown is not discounted the way it is out West: in New York, where most licensed canopy is outdoor, it prints near indoor prices.
| Product grade | Reported NJ range |
|---|---|
| Premium outdoor flower (A-grade) | $1,800–2,200/lb |
| B-buds / fresh frozen | $1,000–1,400/lb |
| Extraction biomass | $300–600/lb |
A conservative mix — 40% A-grade at $1,800 · 25% B-buds at $1,000 · 35% biomass at $450 — blends to ≈$1,130/lb. The underwriting books $900: it absorbs roughly 20% further compression across every grade plus the seasonal “Croptober” congestion dip before the model misses. Offtake is negotiated before harvest — the Casa Verde LOI is signed, with supply agreements priced separately for flower and extract-input material.
Industry-reported NJ ranges, spring 2026 — grade-level transaction data is not publicly indexed; directional, not a print.
Real property first; the operating assets behind it.
The land is the backstop, not the thesis: land plus Year-0 improvements covers about 54% of the gross facility, and the seller has publicly marketed the parcel at the contract price as a discount to a recent sales comparable, so appraisal is expected to be supportive of value above cost. The primary exit is the harvest.
If the exit is ever the land instead of the harvest, this is what the next buyer is buying.
Outdoor cannabis is effectively banned across most of New Jersey — towns must opt in, and almost none have: as of late 2025 the CRC counted three fully-outdoor farms statewide. The lien is on scarce, entitled dirt, and the same scarcity that protects the collateral's value protects the borrower's margin.
Outdoor cultivation is expressly permitted
Harmony Ordinance O:24-06 (May 2024) authorizes cultivation "on the exterior portions of a lot." That clause is what makes sun-grown economics legal here — and what makes the parcel hard to replicate elsewhere.
Municipal cannabis support on this parcel
Township Resolution 24-24 granted municipal support for a Class 1 Cultivator + Class 2 Manufacturer at this parcel — the local approval that gates the state license. The site has cleared that bar once already.
3.5 outdoor acres ≈ a full Tier VI license
NJ's top cultivator tier, Tier VI, allows up to 150,000 sq ft of mature canopy, and NJ allows one cultivator license per owner group — the 3.5-acre field (152,460 sq ft gross, planted to the cap) fills a Tier VI license on its own. Greenhouse and indoor canopy add later, CRC-approved case by case.
One of NJ's best aquifers, on-site
The state's own hydrogeology puts the parcel on the Allentown dolomite, where area wells yield 1,500+ gpm — ample for irrigation, pending a standard NJDEP agricultural water registration.
Entitlements substantially in place
Minor subdivision is county-approved, the tract sits in FEMA Flood Zone X (exhibit 2.7), and utility service is confirmed by JCP&L — the slow, discretionary work is largely behind the asset.
Cultivation-pure, no retail entanglement
Harmony keeps dispensaries and distributors out — a focused cultivator selling into NJ's 300+ dispensaries, with no zoning conflict and less competition for the land.
Close, license, plant, harvest, sell, repay — inside the term.
| Milestone | Window | What happens |
|---|---|---|
| Term sheet → PSA → close | Months 0–2 | Deposit posts 3 business days after PSA; 28-day diligence (Phase I, title, water/utility, entitlement); close within 30 days after diligence. Buyer-named municipal support resolution runs in parallel from PSA. |
| License & site build | Months 2–8 | CRC Class 1 (Tier VI wraps the field) with the prior applicant's counsel and consultants; well, irrigation, perimeter security, field prep from the $210K line. |
| Plant · harvest | ~May → ~Oct | 3.5-acre outdoor season; offtake pre-negotiated ahead of harvest (Casa Verde LOI signed; supply agreements with pricing to follow). |
| Sell & repay | Months ~14–18 | Receipts land Oct–Apr. Base case: ~$6.1M received by month 18 → ~$4.4M crop cash after grow cost and excise, ≈0.89× the facility. Principal repaid from harvest; any residual refinanced into term debt on a licensed, operating asset. |
We show this on purpose. At the U.S. outdoor index with no New Jersey premium the operation is still profitable and never needs additional capital, but the first harvest alone does not retire the facility; the exit is a refinance of a licensed, cash-flowing, land-owning company. Your position is first lien throughout.
At independent industry-average midpoints (7,250 lb · $1,000/lb — see the market-check tab in data room 4.1), first-harvest crop cash is ~$5.5M and retires this facility from the harvest alone at ~1.1×. Refinance (incl. NJEDA's documented cannabis program) is the backstop for the deliberately conservative $450/lb case, not the plan.
A proprietary cultivation program the repayment case doesn't lean on.
The outdoor program runs a proprietary methodology engineered for New Jersey's climate, targeting 1.5–2.0 oz per square foot — roughly 14,300–19,000 lb across the field at full performance. That target is a company engineering estimate, and none of it is in the numbers shown to you: every scenario in this file is underwritten at or below 1 oz/sq ft, and the base case assumes the plain industry average.
Every pound above the base is additional repayment cushion, not a promise. Program specifics are available in diligence.
Drying and processing run on leased 53-ft refrigerated trailers — the industry's standard low-capex path for an outdoor harvest of this size (roughly 5–7 trailers over a ~30-day window) — covered by the $175,000 harvest processing & drying allowance inside this facility's use of proceeds, with farm equipment carrying its own $100,000 allowance. The operator who runs it has built and licensed cannabis facilities before (Sponsors, below). Nothing about the harvest plan depends on money outside this facility.
The same field, every season, from reinvested profits. The refinance backstop gets stronger each year.
This facility funds land and first season only. Every later season replants the same 150,000 sq ft field — the state's single-license maximum — from the harvest before it. For a lender that means no future capital calls competing with the lien, and no additional debt planned ahead of or beside it.
| $M | Yr 1 | Yr 2 | Yr 3 | Yr 4 | Yr 5 |
|---|---|---|---|---|---|
| Revenue | 6.3 | 6.3 | 6.3 | 6.3 | 6.3 |
| EBITDA | 3.9 | 3.9 | 3.9 | 3.9 | 3.9 |
| Net income | 2.8 | 2.8 | 2.8 | 2.8 | 2.8 |
Every year repeats the outdoor season under the single 150,000 sq ft Tier VI license (NJ allows one cultivator license per owner group) and holds prices at or below structural floors. Illustrative, not a guarantee of results.
The refinance backstop is not hand-waving: by the end of year 2 the asset is a licensed, cash-flowing cultivator with EBITDA in the millions on owned land — the profile NJEDA's cannabis program and conventional term lenders both bank. The deliberately conservative $450/lb case exits that way; the base case never needs it.
The town has already said yes to this use on this lot. We inherit the team that got it done.
In New Jersey there is no separate municipal license: a governing-body resolution of support is the local approval the CRC requires. Harmony Township adopted that resolution for cannabis cultivation and manufacturing on this exact parcel in June 2024 (Resolution 24-24, certified copy in the data room). It names the prior applicant, so it re-adopts in our name.
The discretionary vote is known
The township committee has voted yes for this use on Block 31 Lot 7. Same parcel, zone, ordinance and use — the ask is the same decision with the applicant's name updated.
The playbook and people transfer
The prior applicant's NJ cannabis counsel, its consultants (CannDelta — full application work product delivered at PSA execution), and the township relationships that produced the first approval support Lucky's Leafs through the re-vote and CRC licensure until we hold the identical approvals.
Everyone is paid when it lands
The seller closes on $2,495,000 only when we close; the LOI ties their exclusivity to the PSA. Seller cooperation on municipal support and licensure and the CannDelta handover are covenants in the countersigned LOI (§4, §5); the full transition is being papered into the Purchase Agreement.
Residual risk, stated plainly: a township that already approved this use declining the identical use with the same team in the room. Mitigants: the buyer-named resolution is run from PSA in parallel with diligence, and closing is conditioned on it.
The people your lien stands behind — operators who have licensed and built before.
John Franco · Founder & CEO, majority owner
25+ years building and running customer-facing businesses in New Jersey, including growing a shop into a profitable fixture employing 15–20 people. Holds the vendor, dispensary and community relationships the offtake depends on.
Brandon Rumann · Chief Financial Officer
Aerospace engineer and project manager across NASA (ISS, VIPER lunar rover) and Blue Origin (Orbital Reef). Owns capital strategy and the financial model behind this file — and has personally invested $145k+ in the company. Skin in the game precedes yours.
Jamie Fillipuzzi · Chief Operating Officer
Built a Health Canada–licensed cannabis facility from the ground up and secured five cannabis licenses. Runs cultivation, quality systems and compliance — the execution risk in this file sits with hands that have done it before.
Rodrigo Savonne · Director of Sales
Hands-on New Jersey cannabis experience from TerrAscend, one of the state's largest operators — machinery, NJ compliance, and the dispensary relationships that move first-harvest product.
Structure & traction. A dedicated property-holding subsidiary is in place to take title where the lender prefers a PropCo/OpCo separation, with single-purpose-entity covenants available. Early demand is contracted, not claimed: a signed letter of intent with the Casa Verde dispensary plus verbal commitments from additional independents anchor first-harvest offtake.
Risk mitigation plan and strategies
Acquisition, capex to date, remaining capex.
- Site control — LOI countersigned by Harmony Holdings Development LLC, Aug 10 2026
- Legal parcel — subdivision plat recorded, Warren County Map #877 (May 1 2026); County File 25-003 conditions satisfied
- Use right — Ordinance O:24-06, cultivation "on the exterior portions of a lot"
- Municipal precedent — certified Resolution 24-24 on this lot
- Water — M2 Associates hydro study, Allentown dolomite; power — JCP&L will-serve; flood — FEMA Zone X, whole tract, no mandatory flood insurance (determination in data room 2.7); Highlands Planning Area
- Demand — signed Casa Verde LOI · Model — live workbook, balance sheet ties $0 every year
Prepared for prospective senior lenders. Confidential. Illustrative facility sizing at assumed pricing for discussion only; final terms per lender term sheet. Projections are based on documented assumptions and cited market data; not a guarantee of results. Contact: Brandon Rumann, CFO · (832) 244-9139 · info@luckysleafsnj.com