Denver's Adagio Bed and Breakfast is being acquired by the company that's been operating it as a "bud and breakfast" for nearly a year.
The MaryJane Group Inc. (OTCBB: MJMJ), which has tried various pot-related ventures since starting early last year, has had the most success with the B&B, at 1430 Race St.
The MaryJane Group, also based in Denver, will pay $1.5 million for the property. The company said $1 million will be financed by the B&B's current owners.
Helen Strader owns the Adagio. The purchase is expected to close by May 15.
Although Colorado has legalized the use of recreational marijuana by adults, smoking pot in public is against the law, which created an opportunity for MaryJaneGroup to offer a place for people to indulge.
The MaryJane Group in April 2014 signed a one-year lease for the Adagio, paying a monthly rent of $9,000 and 2.5 percent of monthly gross lodging revenue, according to a company filing with the Securities and Exchange Commission. The company also agreed to issue the Adagio's owners 10,000 shares of its stock, which at the time had a fair market value of $75,000.
As part of the lease agreement, The MaryJane Group received the exclusive option to buy the B&B for $1.5 million.
The company, which formed Bud and Breakfast LLC to operate the B&B, said in its SEC filing: "This is our most successful business operation and we plan to focus a majority of our efforts pursuing and developing this opportunity. We are actively seeking additional locations to expand our line of lodging."
The MaryJane Group in September signed a one-year lease for the Mountain Vista Bed and Breakfast in Silverthorne, at a rate of $3,500 a month plus 2 percent of the monthly gross lodging sales. The company also has an option to buy the B&B, although the price has yet to be determined.
The startup reported $277,232 in net revenue for the six months ended Oct. 31, with a month-over-month increase in revenue during that period primarily because of the B&B business.