Canadian-based private company The Green Organic Dutchman announced on Tuesday that it had entered into an agreement with a group led by PI Financial Corp. for a private placement valued at C$20 million. The deal consists of 4,242,500 units of the company at C$1.65 for gross proceeds of C$7 million.
In addition to that deal, the company will engage in a non-brokered offering of 7,879,000 units at C$1.65 for gross proceeds of C$13 million. In a statement, the company outlined the warrants associated with the units as such, “Each Unit will consist of one common share and one-half common share purchase warrant. Each whole Warrant is exercisable into one Common Share at the exercise price of $3.00 per share and has an expiry date that is the earlier of (a) 36 months from the date the Common Shares commence trading on a recognized stock exchange, and (b) February 28, 2021.”
So far, The Green Organic Dutchman has raised C$41.5 million from 2,400+ retail shareholders. The company has positioned itself to be one of the lowest cost producers in Canada specifically due to its low-cost power solutions. It noted that Quebec has some of the least expensive power in Canada that includes government incentives.
It recently secured a 75-acre property near Montreal with the ability to expand to 820,000 square feet. The company is currently financing phase 1 of its expansion of 220,000 sq. ft. which will include an indoor and hybrid greenhouse facility and add an annual capacity of 22,000kg or product. The company also has a newly designed extraction laboratory that is expected to be online in the fourth quarter. This lab has the capacity to process up to 12,000kg of raw material per year and produce C$170 million worth of organic cannabis oils.
The Green Organic Dutchman is known for its organic products that are free from pesticides, herbicides, and synthetic nutrients. Organic cannabis commands a 28% premium pricing over regular cannabis and the Canadian organic industry has grown by 38% from 2013-2015.