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When I was a kid, my parents were both, probably, middle class, but I just had an issue, I guess, listening. And so, I was kicked out, and I lived on the streets when I was 16 years old. It was definitely a different day back then. Like, now, I can't even imagine that. But back then, it was, "Look, you're not listening. You're not doing what you're told. You've got go out. You've got to get out of here."
And so, literally, from the time I was 16, I never lived with my parents again. I ended up going into a group home. And it really, I think, to some degree, developed the desire and drive in me to prove to everybody that I was worth being there. And I know I'm getting mushy right off the bat, but, really, I think, that was my driver. And I think that has a big driver. And anybody that's truly successful, there's got to be something that's eating a way at you that's making you want to do better, and better, and go for it. Does that make sense?
I ended up -- Because I had nowhere to go, I had no family for support, at that point, I needed going into the military. I was in the Navy for about three - four years. I lived in Hawaii. And it really gave me a good foundation to build upon. And so, when I got out, I got into some electronics. I was doing supervising stuff. And really just trying, It kept me wanting to do more, and more, and more. And I realized I needed to go back to college to do that.
And so, I ended up going to Portland State. I ended getting a -- I almost got a BA, and I ended up starting a sketch comedy group while I was in college. And that really transitioned me for the next four or five years because I was out running around, developing, and really being an entrepreneur at a young age going, "How do we get this comedy group to make money? And how do we live?" And so, we did that. And as we kept going, we tend to hit a block wall of where we couldn't get really any farther. And so, I ended up coming back down to California, and I said, "I've got to make a change. I want to make more out of my life. I know that I'm destined to be something."
And so, as we kept going through, and I was working, I ended up working at a gym and running a gym. And I just kept seeing the same thing over and over every single job I had. And it was always as, I was working at a company, I would shoot for the top, and then I would get frustrated because I was limited. And that's when I realized I needed to be an entrepreneur. And I think, you can identify with that, right?
I started working at a car dealership. And I love this story because I'm working with car dealership, and I hate it. I'm doing very well, and I was the top salesman, but I hated it because in order to work in a car dealership, you got to -- Look, I've got to tell your car's worth less than it is in order for us to make a profit. I didn't like that. So, I started writing down every day, I'm going to meet somebody that is going to change my life. I will meet somebody that is going to take me out of here. I'm going to meet somebody for the change of life. I literally started writing that.
Three months later, I met a gentleman who brought me on to a company called Aquagen, who, at the time, had one distributor that they were selling at. They had done $5000 that whole entire year. And the year that I came on, when I came on, within that year, we had already gotten it to $500,000, we were across the country to Texas, and we were blowing up. And then, my son got brain cancer and shut me down. And that's the point I realized I needed to be an entrepreneur. I needed to be able to control my own destination because I never wanted to be in a situation again where I had to work, and I couldn't take care of my family. I couldn't be there for my family.
And so, at that point, because of everything that I was doing, I ended up traveling two weeks out of the year working for like Robert Allen or Armando Montelongo, these real estate gurus, and I was out every weekend doing this. And the more I was doing that, the more I get that same feeling like when I was at the car dealership where, "Man, all these people talking about what they're doing." They're not really doing. They're just talking about it. I'm selling you on how to repair houses, but I'm not actually repairing houses because I think it's too dangerous right now. And that mentality was insane to me.
And so, at that point, I started a review. And it was really all about, how do we help people? There were two things. And the reason I'm telling you this story is because it leads into where I'm at now. When I was traveling around the country working with all of these different gurus, there were two things that kept coming up with every investor that came in. And the two things were they needed to make money now, but they needed to make money long term. And, really, what these programs would offer them one or the other. Look, you either can get wrinkles. And then, all your money is in this rental. And, now, you're making $700 or $800 a month. Or you can do this split, and, hopefully, this goes well because if it doesn't, you're going to lose everything. But if it does, well, great. Now, you have money, but you've got to do it again. See what I mean?
And so, my thing was, how do we solve that? How do we solve that problem? And that kind of leads me up to Green Zone. Did we talk about that?
Because my thing ever since that was, how do I solve those two problems? How do I solve those two problems for our investors? And what we started to realize was when we looked at what was happening in cannabis, when we looked at what was happening in the country, we started seeing a trend. Colorado was like its own little thing. But then, it was Washington, and it was Washington DC. Then, it was Oregon. And you're having all these other thieves coming online.
And, really, what that was showing was this green rush. It was showing the ability of states to start making their own decision despite what federal government was doing. And a lot of times, people, right now, are going, "What is federal government going to do? What are the repercussions?" And the reality is, well, the repercussions be anything because it's a scheduled one drug. However, if you look at the past, for the last five years, Colorado has been making millions and millions of dollars.
In fact, in 2016. 85% of their income came from the black market. It came from the black market. Meaning the 85% of that money was going anyway. It was being spent on candidates, except it was being put into drug dealers' pockets. It was being sent out of the country. Now, it's staying in the country. And my biggest thing is whether you're four candidates are against it, wouldn't you want to control it to ensure that it's as safe as possible? And really everybody's answer is being yes, right?.
Going back to the Gold Rush, because of a lot of people are really assimilating the California Green Rush with the Gold Rush, right. And when I started thinking about that, I started thinking, "Well, who made money in the Gold Rush?" Very few people making gold or finding gold made money. Who made all the money? The people that were renting the hotels, the people that were selling the shovels.
How do we find the golden shovels? Where the golden shovels in cannabis? And here is where they are. There are two things that you need in order to have a life with to sell cannabis. Cannabis, by the way, by 2022, will be the largest impactor to our economy, period. It will be the largest single contributor to our economy because -- And I know I'm getting sidetracked but this is a really important point.
People think well cannabis is just cannabis, and it isn't. When you look at Desert Hot Springs, it's got 800 hundred acres being developed. These 800 acres are going to be employing a ton of people. Where are they going to stay? What are they going to do? Where are they going to eat? All of that infrastructure needs to be done and all of that infrastructure has nothing to do with cannabis. Cannabis is just the catalyst.
And that's what's happening. So, jumping back now, what do we need? Where are the two golden shovels? Well, the two golden shovels are real estate and testing labs. And here's why. In order to get a license in California, you must have real estate. It doesn't mean you have to own it, but it means that you have to have a location that is approved by the owner, or you have told the state this is what's happening in this location, and they've approved for that to happen in that location. You can't just grow cannabis anywhere. You have to have it in a green zone, which is why we need better company Green Zone.
So, if it has to be in the green zone, and if there's only a limited number, can that now become a shovel? So, we can be a landholder. We can own this property. They're getting two to three times the lease rates. And I mean, we're talking, right now, our current project, we've got calculated at $178 a square foot for sale, and there are already counts at 200.
So, literally, a half mile up the road from our location right now that we're in the middle of environing, they're already selling the properties for $200 a square foot. Our whole entire base is off of low $78. So, we've got another $25, 350,000 square feet that is in there. That's the buffer.
Entitlement can be really weird. You've got, like, for instance, in -- And I know you're not asking me this, but just for comparison's sake. We did high end in Laguna Beach. They meet once a year. I mean, man, talk about trying to get things approved, that it's very, very, very challenging if they're not meeting very often, right? Once or twice a year is not enough. Desert Hot Springs is meeting all the time. Their city almost went bankrupt in 2013 and 2001. And so, when you're looking at a city that's almost gone bankrupt twice now has a $50 million surplus, they're very excited to get cannabis in there because it's making a difference in their community.
This is what we did. We wanted to be really smart about this. The reality is there is a timeline on this. Everything is not going to have -- I mean, it's all about supply and demand. Right now, there's nothing. So, everybody can get a higher dollar amount. But as time goes on, that number is going to go down. And so, what we want to do is mitigate our risk. The way that we did that was to capitalize on both of the things happening right now. So, where we're building 10 buildings out in the desert, we're going to sell eight of them. By us selling eight of them, that puts us at about $11 million profit, and we own the other two buildings free and clear now.
So, not only did we make a great profit, but we, now, have two buildings that we can lease. And this is the whole idea of how I wanted to solve that initial problem with investors. They're able to get a check out right now of like a flip. But at the same time, we're holding two properties that they're now getting cash flow. And when we end up selling those in eight years, they get another big hit. It ends up turning like a $100,000 investment into, I think, 331% over 10 years just because of everything that we're doing in combination.
And again, this is always about how do we solve the investors cash now and cash flow problem. We also made it, so that they can get out after any project where our goal is to do this for about six years, but we know that things come up. I mean, somebody could have a parent that happens the way. Somebody could have a child that needs something. So, we wanted to make it, so that after each project, you can get your initial investment back as well. It was all about, how do we make this as accessible to the masses as possible, which is why we ended up doing the Reg A as well, so that we can not have accredited investors, but we can also create an opportunity and platform for anyone to invest in this cannabis boom.
We're looking at 2019 when we will have pay out. We already have two companies that want to literally buy the entire development from us. If we do that, we're obviously not going to be holding anything, but we will be moving back into another property that we're looking at acquiring just literally right along the freeway. So, if that happens, then that's fine. All that does is turn the $11 million and I think it's like $15 million or something. So, everybody just makes a lot more money right now, which I don't think anybody will have a problem with.
If not, we have about 15 people that want to either buy a building or lease one of the condos. Here's the other thing we did that really make this accessible. The reality is 57% of cultivators are mom-and-pop organizations earning less than $500,000 a year. They don't understand real estate, they don't understand development, and they certainly can't put a large project like this together. So, what we did was we cut. We have a 162,000 square feet and 10 buildings. Well, they're subdivided. In fact, that's one of the process that we're going through right now, getting a track map. As long as we have that, we can pre-cell. We're subdividing those into 50 condos.
Now, the rules are you can either have a 5000, 10,000, or 20,000 square foot license right now. However, you can't just have 5000 square feet. You also need 10% to 20% overage for offices and bathrooms. So, the reason we cut it in the 3000-square-foot increments was because if you buy two, you're in a 5000. If you buy four, you're at 10,000 license. If you buy eight, you're at a 20,000 license. So, we wanted to make it so that it was maneuverable and flexible.
The other thing that is awesome about that, if anybody has ever done developing at all, one of the scariest things with developing is, "What color do we paint the door? What color do we paint the outside? We're doing residential, right?" Look, we know all the money in the kitchen and the bathroom. And so, we've got to make sure we do all this great stuff. We're building vanilla shelf. I'm not even putting an HVAC because I don't know who's going to be a cultivator, who's going to be an edible company, who's going to be a testing lab, who's going to be a manufacturing lab. A manufacturing testing lab and edible company ain't no weighing the same amount of HVAC as a cultivator.
So, by doing this, we allow the build process to be super fast. I mean, we're doing metal buildings. So, either be metal or panel. There will be a step up from green house, a step down from shelf tops. But the reality is where they're where at, we're best for the price points, and that they're going to be up in six to nine weeks, we can literally have a building up. And so, that's why we know as soon as we get through this process, we've already got people lined up. One of the other aspects we want to do is pre-sell the whole development. So, that way, again, we mitigate as much risk. We've got so many different safety factors in from calculating cost to build at $73 dollars versus our actual is $38, so that we have a $4 billion buffer in build just in case there is something that comes up because as we all know, something always comes up, right?
So, we just want to have enough buffers that we cover all those something that comes up, and we're still able to give more returns. It's always about under-promising, over-delivering.
So, the way that it works with cannabis is that in the area, the city has to allot that for cannabis cultivation zone or a cannabis zone. That gives you the CUP, the conditional use permit. The conditional use permit stays with the building. So, whether they stay, they leave, if we're renting it to them, and they leave, the CUP stays. However, you have to have a CUP in order to get a license. So, the license will stay with the business. The CUP stays with the building.
We own the largest real estate group on LinkedIn, and we have a large data base. And we have been doing and raising money for traditional real estate the whole time for other people, and then doing some of our own stuff. I was in a car with somebody talking about how their parents had gotten ripped off, and it just, all of a sudden, dawned on me that, man, California was legalizing things. Let's shift everything we're doing into this opportunity.
We're talking about something that's been illegal for over 18 years, and it's only grown in popularity. We're talking about a product that, literally, we just read this in a law firm that it has, as for the avoidance of any doubt, there is not a single recorded incident of anyone anywhere ever overdosing on marijuana. And that's huge. When we're talking about the opioid crisis and all of the opioids that are used for pain management, they get them and take them that they can overdose on that. They had people do overdose on. And then, you've got marijuana that is a great pain supplement that can help it, and it doesn't have the same effects. It's just crazy.
We went, "Look, we know that there's going to be an uphill battle. We know that there are still going to have to be the people that change their mind that realize that this is not a scheduled one drug like everybody is trying to say, but let's really shift," So, we started pushing all of our content about this project that we're doing. And we've had mixed reviews. Some people have said that they don't like it for this reason or that reason. But, again, a lot of those reasons are stuck from the '50s, from the Nixon era. They're stuck from inaccurate information. And that's the sad part.
That's the kind of push about it, I think. What was the connection between wanting to build a plant, which is one thing, and figuring out how to actually show it to everybody? I mean, was it using Reg B or Regulation A+? How did you come across that option?
I wanted the ability to allow everybody in. The reality is when you look at some of the big players in this, they're mad men. They just spent $$684 million on acquisitions. The largest acquisition, cannabis acquisition, in history so far. But I mean, it hasn't been that long. So, when you look at that, it's like, "What normal person can get into that deal?" They can't. Those guys are going to make a killing off of that acquisition. But, typically, people don't have $600 and something. So, what can we do?
And that's why we put together the Reg A because we wanted to put together a real 420 fund that anybody can get into for only $420. So, that's, on them, a hundred shares at $420,20.
Now, we have a lot of people that buy 1000 or 10,000 shares. I mean, it's not the minimum. But what it does allow is that single mom that is working paycheck to paycheck to be able to make a difference in her future. It allows that 20-something-year-old, that millennial to be able to do something and make an advance towards their future. That's what we wanted to create with the Reg A. We wanted to allow everybody access to the same awesome opportunity that, typically, only very wealthy people get.
In our parallel Reg 506(b) is going to be $50,000 minimum. That's going to be the pay out that we were talking about. On the Reg A, that's going to also be testing labs. So, the Reg B only focuses on real estate. It doesn't touch the plant in any way, shape, or form. The Reg A will focus on the real estate. It will be able to lend to our Reg B to be able to capitalize and see some of those returns. If we're going to have 120% return on our Reg B, why would I not want to put some of the Reg A money in there for all of our investors there to get a piece of that return as well.
In addition to that, the Reg A will also work on testing labs because boosting a huge deficit in testing labs. If you're involved in testing labs, you can't be in any other aspect of the business, so nobody wants to do it because they all want to grow. They all want to have their brands or whatever. They're straying. For us, it was, how do we really make money, and really ensure quality? And by us being in testing labs, we can make sure that everything that everybody is getting is what they think they're getting. We can ensure consistency and ensure the continued safety of the product.
The biggest challenge with the Reg A was just the time it takes to get together, I mean, efficiently. We've been working on this for about 11 months now putting it together because there's just is so much involved and very expensive. But, again, it's the platform that allows anybody to invest in. And then, we wanted to create that opportunity for everyone.
The big costs associated with doing the Reg A could be anywhere from just setting it up. It can be anywhere from $50,000 to $100,000. And then, where do you get an audit? We've not been doing this. So, we had to get an audit of a bank account that wasn't even in existence. They don't like people in. I mean, there was all these miscellaneous things to get it set up, so that it was as transparent and see-through as possible because that's one of the big things is that Reg A, our destination for it is to be a publicly-traded company.
We've just hired a CMO. She is working on our whole plan. And that's part of what are our November launch is, is that we're getting all of the pieces put together to really have a solid marketing plan to go out because this fund is about a $42 million fund. And so, we really want everything together. We're planning on doing a few different states. But the end goal of this Regulation A fund is to be the largest cannabis testing lab in the country, period.
It's funny. We've actually had a lot of our investors that get involve and want to be more involved. They really like the idea of what's happening, and they want to be a part of it. So, I see all kinds of abilities. The thing about it is cannabis, at this point, literally, probably touch 90% of the country lives in some, way whether it'd be their grandma that was using it for this, their child that was using it for this. I mean, one of our newest employees that we brought in, I would have never guessed she knew anything about cannabis but they had breast cancer. And so, they were using cannabis to get through that treatment. And it's like this really does impact every single aspect of our lives and every person. So, we want to create the reality and the opportunity for people to be able to do that. If I can do one one other thing, it would be to create a delivery service because that's absolutely the way it's going.
The reality is there's a lot of testing labs that are starting to shift from food to cannabis because they get paid a higher dollar amount. But some can't because they're on a federal contract, but here's what's going to change. One of the other things that we found that just blew me away was White House will unveil Federal Cannabis Reform very. So, showed Dana Rohrabacher, a Republican from California, is talking about that after the midterm elections, the White House has dedicated itself to re-engineering, I guess, or what did they say specifically? I've been reassured that the president intends on keeping his campaign promise of fixing the marijuana situation.
So, I mean, I honestly believe by 2020, federally, it's not legal, but it's going to be the major -- That's going to be the major point. It's going to be cannabis because you're talking about California. By the end of the year, we'll have the first -- It's the sixth largest economy in the world, and we were looking at doing, what, $2.8 billion without having it legalized. Now that it's was legalized, we're going to jump tremendously.
And look, at the end of day, it's all about money when it comes to politics, when it comes to Washington. And if Washington sees this much money coming in from a product that has zero death on the record. You can only die from cannabis if it's a thousand times your effective level. So, if it takes you, let's just say, if anybody out there has ever seen like 100-milligram bars, it would take you 100,000 milligrams to get a lethal dose. Nobody would be intake that to be passed out. Do you know what I mean? Like-
Yeah, it's just crazy. So, the fact that there's a lot more acceptance is great, but there still needs to be more understanding that, look, here's the biggest thing, me, personally, I lost 100 pounds because I started using cannabis. I started three different companies. Cannabis doesn't make me fat. It doesn't make me lazy. It doesn't make me stupid. It doesn't make you any of those those things. Will you adjust? I mean, I hate to sound like that guy in the corner that told you these lies that we were told as a kids by the government in order to control the situation. And it is what it is. But none of those are true. It's not a gateway drug. It's not a drug that makes a lazy. It's not a drug that makes you stupid. None of it.
There are three other companies that we know with cannabis being the Reg fund. One was approved in 2015 with the intention of leasing real estate to cannabis operators, but nothing ever became of that company. So, they're basically gone. Then, you got two that earlier this year obtained Reg A fund, one with High Times. So, it's a magazine, and it's focused on publishing magazines and trade shows. So, nothing to do with what we're talking about. And then, the other one is all about the development of products with cannabis in them. So, they're focused on the real estate aspect or the lab aspect. We are the only Regulation A company fund that does that.
And the other really cool part is there's only a handful of regulation funds that have ever been even approved. I mean, maybe 25. right? I mean, it's not like you've got a ton of them. So, they're difficult to get. There's a lot of things you have to jump through, and it's just an amazing opportunity for us to be able to work through it and get it.