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Advanced Indoor Cannabis Cultivation and Processing

After more than 11 months of negotiations, we have a signed purchase agreement to acquire arguably the largest and most advanced indoor cannabis cultivation and processing facility from one of the public Canadian LPs. They’ve invested over $200M USD into this 1.7M sq ft facility with 1.4M sq ft of advanced light deprivation greenhouses and 300k sq ft of warehouse with a 50-Megawatt power station expandable to 100 Megawatts. It has the capacity for 38 bays (each 30k sq ft and capable of producing 10,000 lbs of flower annually).

Our plan is to operationalize the first 6 bays that are nearly complete and get plants in the ground so that we can begin to cash flow in the first 10-12 months and then build-out another 18 bays (out of a total of 38) and lease the remaining space. The facility appraised last year at $66M USD however, cap rates have dropped several points so the appraiser believes it’s now worth close to $88M unfinished. Once it has been completed and fully occupied it is estimated to be worth $120-$130M USD.

Our purchase price is pennies on the dollar. Since we’re buying the company that owns the real estate, we’re also getting $200M+ in carry forward losses to offset future tax liabilities. There’s considerable upside with this real estate investment and we’ve mitigated the risks.

Seeking Equity Investors

We’re seeking equity investors for $10M to close on the transaction. Investors get 70% of the RealCo and a 7% annual cap rate ($2.5M in income) after debt service starts in year 2.

We hope to close in 30 days since we’ve been working on this for the past 11 months with both of our respective law firms in the US and Canada.

This video shows the scale and magnitude of this facility.

Also, here’s an article that came out this week regarding US groups going north to find growth and profits.
US cannabis companies tread cautiously into turbulent Canadian market.

Downloads & Links

One-Sheet PDF