Canada’s biggest cannabis producer, Canopy Growth Corp, has established a joint venture in the most western province by joining forces with a vegetable greenhouse operator.
Their partners have agreed to lease one or maybe even two of their greenhouse facilities, which will result in the development of up to 3 million sq. ft. of greenhouse growing capacity.
The new joint venture company will construct and operate 1.3 million sq. ft. of greenhouse growing capacity in BC, but aside from that, they will also have an exclusive option to develop a further 1.7 million sq. ft. of existing greenhouse infrastructure at a second BC location.
So far, Canopy Growth’s new partner has not been involved in any type of cannabis-related businesses, as their primary product so far were vegetables and fruit.
Canopy Growth Corp (TSE: WEED) announces funding
In order to fund the joint venture, Canopy Growth has announced a funding plan which roughly includes $20 million USD cash, in several tranches of course. Canopy Growth will also issue their greenhouse partners 310,316 common shares of Canopy Growth over two tranches and a further $2.75 million of common shares in two remaining tranches. Canopy Growth owns 66 2/3% of the Joint Venture.
“The Joint Venture allows us to expand our operational footprint for greenhouse production while increasing our institutional knowledge of operating large-scale greenhouses,” said Bruce Linton, Chairman, and CEO of Canopy Growth.
“Our cannabis expertise already operating the largest cannabis greenhouse in the sector combined with the experience of our new partner’s extensive large-scale greenhouse production record, is great news for our customers and investors.”
Canopy now has a combined 1.9 million square feet of production space either in operation or under construction. That number includes both indoor facilities — the main Smiths Falls plant and the major greenhouse at Niagara.
Applications have been submitted for both sites and subject to Health Canada and other standard regulatory approvals. The company is aiming to have a product ready by July 2018.
Read more: Alberta Unveils Legal Cannabis Framework