MJardin Group (MJAR.C) entered into an agreement with Harvest Health and Recreation (HARV.C) to sell their interest in GreenMart of Nevada, and more specifically their Nevada cannabis cultivation licensed facility in Cheyenne, Nevada.
The purchase price is $35 million and being financed by an existing Harvest lender. Harvest sourced $30 million on December 31, 2019, with the remaining balance due when the acquisition closes. MJardin intends to use the proceeds of the transaction to pay its debts and work on capital requirements for it 2020 plan.
“We are pleased with the return on our investment at Cheyenne. The proceeds from the transaction significantly reduce our debt while strengthening our financial position towards funding our working capital requirements in 2020. We are starting the new year on stronger footing with a clear view on accomplishing our profitability targets based on all of our key assets coming on line,” said Pat Witcher, president and chief executive officer of MJardin.
What is MJardin anyway
They’re a multinational cannabis management platform operating out of both Denver, Colorado and Toronto Canada, dealing in cultivation, processing, distribution and retail. They’ve been around for 10 years, wherein they’ve refined their cultivation methodologies, developed cutting edge facilities and implemented vertical integration both for and on behalf of licensed operators.
This acquisition doesn’t mean MJardin is leaving Nevada. Instead, they’re going to focus on growing operations in the Silver State through Cannabella, the extraction, distribution and consumer product company they acquired in the spring of 2019. Cannabella’s products have already penetrated 50 of the 68 retail dispensaries in the state, and the company is confident that it will be able to get into the new dispensaries being opened after the grant of approximately 50 additional licenses by the state.
Winnipeg facility
In other news, MJardin received its cultivation and processing license from Health Canada for Warman, their 120,000 square foot retrofitted cultivation facility in Winnipeg, Manitoba. They’ve already finished the first phase of the build’s construction and the company intends to get to work on cultivation immediately.
“This is a great milestone for our flagship facility in Winnipeg and a great day for the team. The timing of this achievement keeps us on schedule to reach full capacity in Manitoba by the end of 2020. It also allows us to focus more of our production on extraction at this facility and take full advantage of that high-value market,” Witcher said.
The company originally released the design plans for both their full phase 1 and 2 areas of the Warman facility this summer, and included a hybrid facility with both indoor and greenhouse production capacity, with full European Union good manufacturing practices certified extraction, processing and packaging capabilities. The buildout is expected to be finished in Q4, 2020, and will push their production capacity to approximately 4,500 kilograms of dried flower, and 800 litres of bulk oil for refined products.
In October of last year, MJardin received an $11 million toward their previously announced JV with the Peguis First nation, in which the nation purchased both land and buildings from the company, and assisted with the financing of a cultivation facility
“Our partners have been working very hard to get to this day and we look forward to reaching full production and employment capacity in 2020 and bringing this significant economic development project to full fruition,” said Glenn Hudson, Peguis chief.
On Oct. 4, 2019, MJardin announced that the company received an $11-million payment toward the previously announced letter of intent joint venture agreement with Peguis First Nation (51 per cent) that will see Peguis purchase the existing land and buildings from MJardin and additionally finance the capital expenditures required to complete phase 2 of the facility for approximately $20.5-million.
This marks MJardin’s third cultivation and processing licence in its Canadian portfolio, covering facilities in Ontario, Nova Scotia and Manitoba. The joint venture agreement is expected to close in early 2020.
—Joseph Morton
