The company’s tenant grower has told the company to expect the first harvest within weeks, with full-scale production capacity at ‘The Park’ expected in September.
“With harvests now underway in California along with our Washington tenant weeks away from its first harvest, the Company is now at a turning point. The Company expects four of its six tenant licensees to harvest at its farms, with each set to begin cash flowing in Q4 2018.” –CROP Infrastructure Director and CEO, Michael Yorke
The company’s Wheeler Park facility, referred to as ‘The Park,’ is a state-of-the-art facility with a 35,000 square foot greenhouse designed to yield 12,000 lbs of cannabis annually once fully operational.
Crop Infrastructure’s Q2 financial statements report cash assets of just over CAD$1.1 million, with loans and advances totalling $6.1 million, and a net loss $4.28 million over the same period. It should be mentioned that Crop Infrastructure has only just started growing, and Yorke has said he expects cash flows to begin in Q4 2018.
Crop Infrastructure’s business model
Crop Infrastructure’s properties span the United States, Jamaica and Italy. In total, its portfolio totals 176,000 square feet of production space either in-development or completed, and has an additional 134,000 square feet of space scheduled for construction.
Unlike more traditional cannabis companies which own land and employ workers for production, the company purchases real estate which is then leased to a licensed producer/processor.
The company supplies the necessary equipment and services necessary for maintaining a functioning greenhouse for a fee. Once harvests start, and cash begins to roll in, Crop Infrastructure receives a 60% preferential payback via lease and management fees until it recoups its investment.
Once it’s investment is repaid in full, the company maintains a 30 percent interest in the real estate & infrastructure and will continue to receive dividends from its partners.
EG’s Lucas Kane compiled Crop Infrastructure’s many recent announcements in a story published last week. Here are the highlights:
On August 23, 2018 Crop Infrastructure announced the appointment of Greg Douglas to the company’s executive advisory board to lend his expertise to company’s operations in Jamaica.
“Greg can be considered one of the foremost authorities on the Jamaican cannabis industry. He will be of considerable assistance to Crop as the business develops there.” -Crop Infrastructure CEO, Michael Yorke
On August 22, the company announced that its unnamed Nevada subsidiary had successfully leased an additional 750 acres of “contiguous agricultural farmland,” increasing the company’s total Nevada acreage to 1,065 acres, with 240 acres under pivot irrigation.
On August 09, Crop Infrastructure announced that its Humboldt County, California tenant had begun harvesting cannabis from 10,000 square feet of greenhouses.
On August 15, 2018 Crop Infrastructure announced that its San Bernardino dispensary application had passed the first stage of the application review process. Once granted, Crop plans to finance the purchase of the dispensary’s real estate.
On August 2, the company published an update on its Italian joint venture, a 25-acre Xhemplar hemp farm in Italy: the property produced roughly 600,000 healthy hemp plants in under two months.
On July 31, Crop Infrastructure announced the signing of a zero-cost JV lease agreement for five acres of agricultural land in the fertile area of Westmoreland Parish, Jamaica. The company holds 49 percent interest in the property which has been designated suitable for cannabis production.
Crop Infrastructure has put out a laundry-list of news recently and it has been good news all the way. The company’s first harvest will provide more information, but it’s looking encouraging so far.
~~Ethan Reyes with notes from Lucas Kane
Full Disclosure: Crop is an Equity Guru marketing client and we own stock.Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.
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