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Cannabis producer The Green Organic Dutchman Holdings Ltd. (TSX:TGOD) (OTCQX:TGODF) has sold its Valleyfield, Quebec-based facility to Cannara Biotech Inc. (TSXV:LOVE) for $32.7 million.
Under the previously announced deal between Cannara Biotech and TGOD's subsidiary Medican Organic Inc., Cannara agreed to buy all industrial and agricultural land, main hybrid greenhouse, rooftop greenhouse, as well as all support buildings and certain related equipment located in Valleyfield.
The sum includes a $27 million purchase price and a $5.7 million deposit refund from Hydro-Quebec that Medican received, the Toronto-based company disclosed Wednesday.
In addition, Medican entered into a three-year lease and cannabis supply agreement with Cannara for roughly 80,000 square feet of the facility's cultivation and processing space, also located in Valleyfield, which will commence once the initial two-year lease expires.
Simultaneously, TGOD settled its senior term debt through an approximately $31.8 million payment.
BMO Capital Markets acted as the exclusive representative and financial counsel to TGOD for the transaction, while Langlois Lawyers LLP served as its legal advisor.
The acquisition, which TGOD's CEO and interim CFO Sean Bovingdon called "a major transition point for the company," significantly reduced its debt while right-sizing operations in Quebec without disruption.
"Our portfolio of products is receiving positive reviews across the country, and we look forward to providing Quebec with locally grown products as demand continues to increase," Bovingdon said earlier.
Photo by Elsa Olofsson on Unsplash
