GrowForce Raises C$38 Million

Canadian-based cannabis platform GrowForce Holdings Inc. closed its previously announced equity
capital raise giving the company more than C$38 million in gross proceeds. GrowForce plans to use the funding for cultivation expansion and strategic acquisitions of high-quality assets, and general working capital.

The offering was completed in connection with GrowForce’s previously announced proposed
reverse take-over (RTO) of Platform Eight Capital Corp. That deal is expected to be completed during the third quarter of 2018.

“With this capital raise, additional access to growth capital and key strategic partnerships in place,
GrowForce is well-positioned to consolidate a fragmented cannabis industry in Canada and
international markets,” said James Lowe, EVP of Operations for GrowForce. “Our growth strategy is
focused on leveraging our significant experience successfully operating cultivation facilities across North America for more than nine years to position GrowForce as the leading consolidation platform in the legal cannabis industry.”

GrowForce was created and spun-off by Denver, Colorado-based cannabis management company MJardin. According to the company statement, GrowForce said that it has entered into an exclusive cultivation, extraction and retail licensing agreement with MJardin, including exclusive rights to its cannabis management services and intellectual property portfolio in Canada and international markets.

Terms 

The statement said that GrowForce issued 7,832,716 brokered subscription receipts exchangeable
for common shares at a price of C$3.20 amounting to C$25,064,700. GrowForce also issued 4,115,521
non-brokered subscription receipts at the same price for gross proceeds of approximately C$13,169,700. The result is a cumulative raise of more than C$38 million. Cormark Securities Inc. and Canaccord Genuity Corp., acted as co-lead agent, together with a syndicate of agents, including Haywood Securities Inc., KES 7 Capital Inc., nd Mackie Research Capital Corporation, for the offering.

GrowForce Footprint

GrowForce possesses an existing Canadian footprint of cannabis assets with a planned cumulative capacity of approximately 60,000 kg of cannabis production per annum. GrowForce also plans to establish partnerships with various First Nations to build new facilities for large-scale cannabis cultivation, extraction, and retail. These partnerships will allow Indigenous Peoples of Canada to capitalize on economic opportunities in the cannabis space through the cultivation, distribution and retail sale of cannabis products.

“There are currently more than 100 licensed producers across Canada, with the majority moving from the construction of facilities to operations. Few of these licensed producers have the operating expertise to successfully execute this transition,” said Lowe. “GrowForce has significant access to capital with the operational expertise to be one of the top licensed producers as we execute our M&A consolidation strategy and unique retail distribution model.”

 

Debra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


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