- TransCanna
Holdings’ purchase of a 5.5-acre site in Northern California with a
196,000-square-foot facility onsite is expected to set the stage for the
company’s self-contained ecosystem to create or acquire 15 premium brands
by controlling all aspects of production, distribution and sales
- Cannabis
sales in California are expected to reach $5.1 billion this year and climb
to $7.7 billion by 2022
- TransCanna’s
site purchase advances plans for an additional 600,000-square-foot
facility for biomass growth
- A
successful, oversubscribed private placement raised gross proceeds of C$16
million to help fund plans for the site
Cannabis branding and distribution company TransCanna Holdings Inc. (CSE: TCAN) (FSE: TH8) has
finalized the acquisition of “arguably the largest vertically integrated
cannabis centric” multi‐purpose facility in California, setting the stage
for edification of a self-contained cannabis hub operation that includes
integrated divisions for transportation and distribution, cultivation and
nursery, lab extraction, manufacturing and packaging.
The three-story, 196,000-square-foot facility is part of a
larger 5.5-acre property purchase that the company envisions as green space,
where up to 600,000 square feet of new structure can be built to grow
TransCanna’s own biomass for its brands.
“Simultaneous to putting our efforts into purchasing the
facility, we’ve been searching extensively for the key individuals who will be
overseeing the day to day operations. We’ve made great strides over the past
several weeks and should be able to start making announcements by the end of
the month,” TransCanna CEO Jim Pakulis stated in a news release (http://ibn.fm/xHbpX).
The total purchase price was $15 million. The seller of the
building agreed to a carry-back note of $6.75 million at seven percent interest
for up to 13 months, with an initial maturity date of October 15 and the
possibility of a six-month extension under a share and share warrant issuance
agreement.
A brokered private placement for five million units of
shares and warrants to help fund the purchase was increased to eight million
units for gross proceeds of C$16 million after the investment vehicle was
oversubscribed in March (http://ibn.fm/GcpSK).
The seller completed $8 million in renovation improvements
prior to the purchase to bring parts of the site’s potential up to U.S.
Department of Agriculture standards for safety and sanitation in processing
biomass, with cannabis packaging and processing equipment included. Making the
existing facility operational would require an additional investment of
approximately $1.5 million. The structure has not yet been licensed for
cannabis production, but TransCanna expects to use it for the varied aspects of
its cannabis production and distribution operations as those permissions are
granted.
“We believe the consistency in our ecosystem that we can
offer, and the scale that we can create, will result in TransCanna owning a
portfolio of premium brands that will materially benefit the retailer and their
customers,” Pakulis added (http://ibn.fm/eEASP).
Analysts at Arcview Market Research, partnering with BDS
Analytics, forecast a legal cannabis market in the United States that will
experience double-digit growth from 2018 to 2022, passing $23 billion in sales
by 2022 with a 22 percent CAGR (http://ibn.fm/L7j2G). A Cannabis Business Plan report
predicts that California’s cannabis market will reach $7.7 billion in annual
revenues by 2022 (http://ibn.fm/30cwH),
while BDS Analytics expects sales of cannabis to hit $5.1 billion this year in
California alone (http://ibn.fm/Kby5q).
For more information, visit the company’s website at www.TransCanna.com
NOTE TO INVESTORS: The latest news and updates
relating to TCAN are available in the company’s newsroom at http://ibn.fm/TCAN
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