- Cannabis sales are projected to increase as NUGS makes move to increase premium cannabis production
- MOU grants rights for NUGS to purchase 10% of the facility at a valuation of $15 million for the entire facility
- Agreement strengthens company’s status as an emerging leader in the vertically integrated California cannabis marketplace
As sales of high-quality cannabis in California, the largest cannabis market in the country, are projected to increase, Cannabis Strategic Ventures (OTCQB: NUGS) is taking strategic steps to ensure its position in the growing space. Most recently, the company inked a Memorandum of Understanding with Devine Solution Inc. with the end goal of increasing its cannabis production capacity (https://cnw.fm/fS4jr).
“Sales of legal adult-use cannabis are expected to increase greatly in the state of California between 2018 and 2024,” reported Statista (https://cnw.fm/LqioS). “Sales already reached 2.5 billion U.S. dollars in 2018 (the largest U.S. market) and are expected to grow to roughly 7.2 billion by 2024.”
Cannabis Strategic Ventures is aligning its long-term strategy with that growth in mind, as the company remains focused on shaping the future of the cannabis industry by striving for constant evolution in products, places and people. The MOU outlines NUGS’ plans relating to its proposed acquisition of an indoor cannabis cultivation facility owned by California-based Devine. Based on the terms of the recently signed MOU, NUGS is moving forward to purchase 10% of the facility at a valuation of $15 million for the entire facility; the agreement includes an option to purchase an additional 41% of the facility (which would comprise a controlling 51% stake) at this same valuation, which would results in a controlling 51% stake for Cannabis Strategic Ventures.
“This deal represents the potential to sharply increase our premium cannabis production capacity and materially augment our status as an emerging leader in the vertically integrated California cannabis marketplace,” said NUGS CEO Simon Yu. “We have already amassed years of experience refining our cultivation methods and strains in an outdoor framework with our NUGS Farm North site. Adding a top-tier indoor cultivation operation stands to help us further build upon that success and drive more volume in the premium flower market, which has powerful implications given our recent expansion into the dispensary marketplace with our MDRN Tree downtown LA dispensary location. The combination grants NUGS expanding operations at both ends of the farm-to-sale model.”
The 15,600-square foot facility is located in Sacramento, California, and has the potential to house an estimated 500 grow lights. The existing infrastructure has the potential to produce up to three pounds of premium exotic cannabis flower per light per harvest, with a projected 5.75 harvests per year. That would mean the potential for more than 7,000 pounds of premium cannabis flower per year for NUGS, which is one of the largest publicly traded marijuana cultivators in the United States.
Cannabis Strategic Ventures also has a wholly owned subsidiary — NUGS Farm North — that is a fully state legal licensed Cannabis cultivator in the state of California. The property has more than six acres of greenhouse. Cannabis Strategic Ventures cultivates and sells cannabis biomass and related cannabis products to the legal cannabis market.
For more information, visit the company’s website at www.CannabisStrategic.com.
NOTE TO INVESTORS: The latest news and updates relating to NUGS are available in the company’s newsroom at http://cnw.fm/NUGS
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