SMITHS FALLS, ON, Oct. 11, 2017 /CNW/ – Canopy Growth Corporation is pleased to announce that it has entered into a definitive joint venture agreement, partnering with an undisclosed large-scale greenhouse operator to form a new company, BC TweedJoint Venture Inc.
The agreement includes the development of 1.3 million sq. ft. of greenhouse growing capacity in British Columbia with an exclusive option to develop a further 1.7 million sq. ft. of existing greenhouse infrastructure at a second BC location.
The company hopes to have product available from the Joint Venture as soon as July 1, 2018, the day when legalization is set to happen in Canada.
Under the terms of the agreement and subject to third-party approvals required by the Partner, the Joint Venture has conditionally agreed to lease a 1.3 million sq. ft. (30-acre) greenhouse facility located on a 55-acre parcel of land in BC from an affiliate of the Partner, with an option to acquire the property.
As consideration for entering into and operating the Joint Venture, Canopy Growth will, based upon various milestones and subject to required regulatory and stock exchange approvals, issue the greenhouse operator 310,316 common shares of Canopy Growth and a further $2.75 million of common shares. Canopy Growth owns 66 2/3% of the Joint Venture.
To fund the development of the Joint Venture, Canopy Growth will contribute $20 million in cash (of which approximately $1 million was advanced at closing), in exchange for Class A Preferred Shares with cumulative preferred dividends.
This Joint Venture will increase the total pro-forma greenhouse production footprint at Canopy Growth operation to approximately 2.3 million sq. ft., with an exclusive option to bring that footprint to 4.0 million sq. ft.
The Company has also announced indoor capacity expansion plans that will bring its total indoor production capacity to approximately 900,000 sq. ft.
Canopy’s undisclosed partner is an experienced large scale, low cost, hydroponic greenhouse operator, and this Joint Venture represents the sixth province with Canopy Growth operations.