Origin House Archives - Green Market Report

StaffStaffFebruary 5, 2019
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It’s time for your Daily Hit of cannabis financial news for February 5, 2019.

On The Site

Verano

Illinois-based Verano Holdings, LLC has acquired Four Daughters Compassionate Care Inc. of Sharon, Massachusetts and its provisional medical cannabis licenses for an undisclosed amount. The first cultivation and dispensary facilities in Sharon are expected to open in six to nine months. The company said it would hire 50-75 employees locally and train them for these sites in 2019.

As a result of the acquisition, Verano has begun building a cultivation and production facility in Sharon Massachusetts. The company is also renovating an adjacent building for the dispensary. The acquisition marks Verano’s expansion into an additional adult-use market and its expanding geographic footprint into the Northeast from its current 10 operating facilities in Illinois, Maryland, Nevada and Florida, with 45+ licenses under active development in Florida, Michigan, Ohio, Puerto Rico, and Maryland.

GTI

Green Thumb Industries Inc. (OTCQX: GTBIF) is acquiring For Success Holding Company, the owner of Los Angeles-based Beboe branded cannabis products for an undisclosed amount that will be paid in GTI stock.

Beboe is known as a premium brand for its high-end packaging including its iconic rose gold vaporizer pens. The products are available in more than 125 California and Colorado retail locations and via home delivery across California.

In Other News

Jushi

Sound Wellness LLC, a subsidiary of Jushi Inc. has received approval of its industrial hemp-CBD processor license application as part of the New York State Industrial Hemp Agricultural Research program, administered by the New York State Department of Agriculture and Markets. With this announcement, Jushi is proud to support the Western New York community, New York farmers, and the nation’s premier industrial hemp program. Sound Wellness’ hemp-CBD processor license supports the company’s initiative to create product innovations centered around the untapped potentials of hemp.

By investing over $5 million in a high-tech hemp processing operation on the east side of Buffalo, NY, Jushi expects to create approximately 30-65 jobs in the area. The facility will house a state-of-the-art lab, allowing Sound Wellness to create advanced product formulations using CBD distillate, CBD isolate, and water-soluble CBD.

The Flowr Corp.

The Flowr Corporation (OTC: FLWPF)  has submitted an application to list its common shares on The NASDAQ Capital Market and has filed a Form 40-F Registration Statement with the U.S. Securities and Exchange Commission.

Target Group Inc.

Target Group Inc. (OTCQB: CBDY) entered into an agreement to acquire Massachusetts-based CannaKorp Inc. CannaKorp is the holder of the patent-pending WISP vaporizing system.

The WISP™ is a pod-based, herbal vaporizing system that uses precisely measured, sealed and tested WISP™ Pods containing dried, ground botanicals. The WISP™  vaporizer, used together with WISP™  Pods, gives cannabis users the predictability and assurance to know what they’re inhaling with every use, without the hassle of grinding, measuring, or packing. For the rapidly evolving market of cannabis consumers who prefer vaporization, Wisp™ presents a proven method of delivery with unique bioavailability benefits and avoids the health concerns associated with the combustion of cannabis and other herbs.

Origin House

CannaRoyalty Corp. d/b/a Origin House  (OTCQX: ORHOF) entered into an agreement to provide strategic financing of US$704,000 to Humboldt’s Finest, an alliance of heritage cannabis farms representing Humboldt County. Humboldt’s Finest produces sun-grown cannabis flower on their farms in Humboldt County, California, which is processed into products including jarred flower, pre-roll flower joints, live resin dabs/jars and/or live resin cartr


Debra BorchardtDebra BorchardtDecember 4, 2018
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5min6160

CannaRoyalty Corp. also known as Origin House (CSE: OH) (OTCQX: ORHOF) has signed a binding term sheet to acquire certain business assets of California-based cannabis cultivator, Cub City LLC  for total consideration of $7,025,000. The deal is expected to close in March 2019.

Origin House will be purchasing a state-of-the-art craft cultivation facility with an annual production capacity of up to 1,400 kg of an ultra-premium flower. At that price, it would imply a purchase price of $5 per gram of funded capacity.

“This Acquisition was a logical next step for Origin House, led by the needs of our brand partners as we execute on our brand support and acceleration strategy,” said Afzal Hasan, President and General Counsel of Origin House. “Access to bespoke third-party cultivation is critical for new flower brands that want an authentic brand promise from seed to consumption. The existing alternative for brands is to use undifferentiated and mass-produced biomass available on the market. ”

Cub City was co-founded by a team that included Drew and Karen Duval of FloraCal. The facility and team have produced flower for some of the top packaged flower brands in California, as well as a prominent pre-roll brand.

In addition to the premium product that Origin House sought, the facility is located in close proximity to FloraCal’s 62,000 sq. ft. facility. Origin House said that the additional 24,600 sq. ft. cultivation capacity will be focused on third-party cultivation.

The company also said that both current and potential brand partners have highlighted the desire for bespoke exotic cannabis cultivation. This acquisition further expands Origin House’s brand support and acceleration platform and will allow the company to close pipeline opportunities with promising brands in California

Hasan added, “We are excited to continue growing our infrastructure and team to unlock further opportunities for growth that we have been cultivating with brand partners in California.”

Terms Of The Deal

The company statement outlined the following terms of the deal:

Under current Cub City management, the facility is undergoing construction with an estimated completion date of March 31, 2019.  Upon the completion of construction, the facility will be composed of a two-story building with 11,000 sq. ft of cultivation space, and 7,400 sq. ft of distribution, processing and packaging space in addition to 6,200 sq. ft of office space, storage, and common area

Within 30 days, Origin House will provide a construction loan facility (the “Loan”) to Cub City in an amount of up to USD$1,700,000. Funds advanced under the Loan will bear simple interest at 12% per annum and mature two years from the date of the first advance.  The Loan proceeds will be used for construction and equipment for the Facility

The Loan will be secured by a first ranking security interest on all present and future assets of Cub City and guaranteed by each of the members of Cub City on certain conditions

Key Assets

  • Some of the key assets, among others, to be purchased in the Acquisition include:
    • Cub City’s 20-year lease of the 24,600 sq. ft Facility; and
    • A 5-year local permit to cultivate, process, package and distribute cannabis. On Closing, Origin House will also have access to two state licenses: (a) a cannabis Type 11 Distribution License; and (b) a Small Indoor Cultivation license that may be used for future operations.

Included In Purchase Price

    • Forgiveness of the principal and interest accrued under the Loan (the “Loan Balance”);
    • $3,525,000 less the Loan Balance, in immediately available funds on Closing Date;
    • $3,500,000 on the one-year anniversary of the Closing Date (“Holdback Disbursement Date”). Cub City will have the option to receive the second payment in cash, shares of Origin House, or a combination of both but not less than 50% in shares.



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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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