Cannabis company Red White & Bloom Brands Inc. or RWB said Thursday it has agreed to acquire the issued and outstanding shares of Cannabis Capital Partners Inc. or CCP.
CCP is a special purpose vehicle that has the rights to concurrently purchase medically and recreationally-approved tetrahydrocannabinol or THC cultivation center licenses in the State of Illinois.
RWB’s acquisition of CCP also includes a 23,572 square feet active cultivation and manufacturing operation, the associated inventory, and the real estate assets including two acres of land.
RWB said it will acquire the issued and outstanding shares of CCP by issuing up to 22 million common shares, based on certain milestones. This includes the approval of the license ownership transfer and the approval, if sought, of the relocation of the license.
CCP has agreed to acquire the licensed Illinois THC Cultivation Center and related assets from the current operators for $32.5 million. CCP will pay $16.25 million at closing of the transaction, which is expected to be in the first quarter of 2021, and another $16.25 million in the form of an 8 percent, interest only, 18-month note to the seller. Upon closing, CCP shall become a wholly owned subsidiary of RWB.
RWB noted that the current cultivation and manufacturing operation, located in Shelbyville, Illinois, was one of the original 21 medical marijuana cultivation center permits. The facility is currently operated by a not-for-profit entity.
Upon closing of the transactions and approval by the Illinois Department of Agriculture or IDOA, RWB plans to migrate the cultivation licenses to Mid-American Growers Inc.’s 3.6 million square foot cultivation facility in Granville, Illinois. Mid-American Growers is RWB’s wholly-owned subsidiary.
RWB has been cultivating premium cannabidiol or CBD and novel cannabinoid flower at the Granville facility for over one year.
RWB said it would be permitted to expand the plant canopy to 220,000 square feet, translating to about 450,000 square feet of total cannabis operations when including the non-canopy areas as well as processing and manufacturing.
Further, RWB will be able to launch its Platinum Vape brand as well as the its exclusively licensed ‘High Times’ brand throughout Illinois, as the cultivation center license allows for the processing of extracts as well as manufacturing of infused goods.
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