- 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://cnw.fm/G24ol).
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://cnw.fm/vIQ8B).
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://cnw.fm/VZh4Z).
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://cnw.fm/Am03Y). A Cannabis Business Plan report predicts that California’s cannabis market will reach $7.7 billion in annual revenues by 2022 (http://cnw.fm/6QOcU), while BDS Analytics expects sales of cannabis to hit $5.1 billion this year in California alone (http://cnw.fm/KGqq2).
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://cnw.fm/TCAN
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