GTEC Holdings (GTEC.V) sent its video evidence package to Health Canada for its Tumbleweed Farms facility to complete the regulatory process and start growing cannabis.
The video shows how GTEC fulfilled its requirements under the Cannabis Act for Tumbleweed Farms. If the facility is approved it will be issued a standard cultivation license to allow Tumbleweed to grow their ultra-premium flower.
GTEC Holdings completed construction on the facility at the end of January 2019, but decided to postpone the regulatory process while their consultant, Cannabis Compliance, performed a review to find, assess and solve any unforeseen problems that might arise.
Tumbleweed Farms is located eight kilometers from a major highway just outside of Kamloops, B.C. and has 10,000 square feet for indoor cultivation. The facility sits on 23 acres of land with access to an artesian well.
In addition to seeking regulatory approval, GTEC amended their Aug. 12, 2017 definitive share purchase agreement with the vendors of Tumbleweed Farms on March 4, 2019.
The agreement replaced the previous cash milestone payments offered in the original deal with an issuance of $2,250,000 worth of common shares at a price per common share equal to the 30-day volume-weighted average price after submitting the evidence package for a Health Canada cultivation license.
Raising money to make money
GTEC jacked up its brokered private placement from $8 million to $10 million on March 6.
Now that the company has added a new facility to its arsenal, it will need the financial power to back its plans in 2019.
GTEC put out a private placement to help them raise their cannabis-growth output capacity to 14,000 kilograms a year, according to Norton Singhavon, founder, chairman and CEO of GTEC.
Sprott Capital has led the offering since the placement started in January, and has exercised its option to boost the offering by 25% twice.
The first tranche of the private placement closed on Feb. 28, 2019, after the issuance of 11,126,153 company units totaling $6,119,714.15.
The second tranche is expected to close on March 19, 2019, pending regulatory approval or unless Sprott decides to exercise its option again to raise the offering by another 25%, which it can do at any time up to 48 hours before the final closing date.
GTEC will issue a total of 2,272,727 units at $0.55 each as part of the offering. Each unit is the equivalent of one common share in the capital of the company, and one-half of one common share purchase warrant.
Each warrant will be exercisable at $0.90 for two years from the date they were issued.
Sprott Capital will take home a 6% cash commission on the gross proceeds of the offering, and an additional 6% of the number of units sold in broker warrants.
Welcome to Saskatchewan
GreenTec Holdings, another GTEC subsidiary, established a joint venture with BATC Investments called GreenTec Retail SK in early January.
BATC is a private company and the investment division of the Battlefords Agency Tribal Chiefs.
Unlike most Canadian provinces, the Saskatchewan Liquor and Gaming Authority has decided to turn cannabis retail over to the private sector. GreenTec announced in June 2018 that they were attempting to enter the Saskatchewan cannabis market, and applied for a dispensary license.
The agreement received TSX Venture Exchange approval “to facilitate the acquisition of cannabis genetics” in January of 2019.
–Joseph Morton
Full disclosure: GTEC Holdings is an Equity.Guru marketing client.