Las Cruces will pull $150,000 investment out of hemp manufacturing company
The Las Cruces city council voted to pay the state back $400,000 that was going to go to a new hemp manufacturing company.
The city planned to invest $150,000 of its own funding in addition to $400,000 that the New Mexico Economic Development Department gave the city for 420 Valley, LLC.
The city's decision to retract the money was due to the fact that 420 valley was unable to meet its hiring goals.
"They we’re going to provide up to 55 jobs at a certain income level by 2023, December 31st," said Las Cruces Mayor Ken Miyagishima. "And then there was also another stipulation that they would have at least 18 jobs by December 31st of 2020 and we don’t believe that they’re going to fulfill that.”
“We started reaching out to people for the hiring process, getting it lined up, but we didn’t have anybody that was fully committed to come work for us," said Rick Morales the co-owner of 420 Valley.
Morales said that the pandemic has had several impacts on the companies plans, including increasing the cost of CBD and increasing building materials that would be needed to get 420 Valley up and running.
"When we were getting started [CBD] was 45 hundred dollars a kilo, as a result of the pandemic coming and it ensuing and all the issues that its had, its decreased and decreased and decreased, literally today’s price is 270 dollars per kilo, so the huge profit margins that we were forecasted to make are no longer there," Morales said.
“In order to utilize 420 Valley, we were going to have to spend well over a million dollars to get that building up to code and the cost of building materials skyrocketed, in some cases it went 4 to 5x more for some of the types of lumber," Morales added.
Miyagishima said 420 Valley can always re-request funding when they're ready.
As a result of the city's decision, the $150,000 that the city planned to invest in 420 Valley will go back into the fund bond.
Miyagishima said the city previously considered investing the money in another company.
"There’s an organization that we had entertained a couple weeks ago called Bitwise Industries that we’re hoping to be able to give them some incentive money as well and this could obviously go that way," said Miyagishima.
According to Miyagishima, Bitwise Industries helps "train residents through computers, technology, things of that nature that normally you would learn in school whether it’s community college or New Mexico State.”
Bitwise Industries stated on its website that it has eight locations in California and one in Ohio.
"We’re hoping that they come here to Las Cruces," Miyagishima said. “I would definitely entertain that, and I would think my colleagues would as well.”
© 420 Intel