The Green Organic Dutchman Holdings (TGOD.T) figured out what to do with their underproducing Valleyfield greenhouse site today.
Valleyfield came about during the cannabis industry development phase where the company with the biggest buildout got the biggest stock bump. TGOD wanted in on that and they started dotting both Ontario and Quebec with greenhouses and facilities. Unfortunately, that time ended and the market moved in the direction of outdoor grown cannabis, TGOD was left holding the bag.
“The Canadian cannabis landscape has evolved since legalization and so have our real estate requirements. With our shift to the value-added part of the production chain, large indoor cultivation facilities such as Valleyfield are no longer necessary to continue growing our business. Selling a portion or the totality of the greenhouse will result in a significant reduction in operating costs while providing capital to reduce debt and reinvest in future growth opportunities, including considerations in the US,” said Sean Bovingdon, TGOD’s chief financial officer and interim chief executive officer.
The shift to outdoor cultivation put a serious crimp in the business plans for many Lps, including TGOD, which saw themselves with considerable biomass surpluses. Now they’re thinking that unloading the greenhouse is probably the best option, as it would potentially put them back on the path to adequate sizing and profitability. They can handle their present export obligations with their existing production capacity and have an option to buy cannabis biomass form other producers for extraction, including in Quebec, if the need arises.
In 2019, they decided to use it for processing, while keeping the cultivation angle open in case they need it. Now, two years later, they’ve gotten themselves a commercial real estate advisory to help them find buyers for the Valleyfield site, which they think will be lucrative because of the greenhouse they’ve installed. They’re already accepting bids and the company is thinking the transaction could end up as either a complete or partial sale for the site.
There’s not really any appreciable change on the news, more like half a penny, and TGOD Is presently trading at $0.415.