Grown Rogue has signed a definitive agreement with EBC Ventures to enter the Illinois market. The venture entered into a definitive agreement on February 22, 2024, to acquire 100% of CannEquality, LLC, which holds a craft growers license with the Illinois Department of Agriculture ("IDOA"). The acquisition is subject to regulatory approval from the IDOA.
Grown Rogue will own 70% of the JV and has agreed to contribute up to US$6,000,000 to support the development of the facility. The buildout will initially include ~5,000 square feet of canopy and 4,700 square feet of dedicated processing and manufacturing space, with the ability to increase to a total of 14,000 square feet of canopy allowed under the license.
The JV agreement includes multiple purchase options, which ultimately give Grown Rogue the ability to acquire 100% of the membership interests of the JV.
"We are excited to announce our partnership with EBC, accelerating our ability to bring the quality and value of Grown Rogue products to the consumers of Illinois," said Obie Strickler, CEO of Grown Rogue. "We have been watching the Illinois market develop and believe this partnership represents a compelling opportunity to deliver great returns on our invested capital while enhancing the overall market for Illinois cannabis consumers. The Illinois market is particularly attractive to us as we believe there is pent-up demand for craft-quality flowers at accessible price points.
We have secured a great location close to Chicago that is right in our sweet spot of facility size, approximately 50,000 sq ft, and current regulatory rules allow us to develop up to 14,000 square feet of canopy while maintaining sufficient space to build out a manufacturing business. The manufacturing segment is another example of us looking to broaden our scope within the industry while staying laser-focused on producing high-quality, craft cannabis that delights our consumers," continued Mr. Strickler.
"This will largely be funded by cash on hand and the cash we anticipate receiving with the recent warrant acceleration announcement. The warrants are held by a small group of investors, and we expect most or all the eligible warrants to be exercised and lead to maximum proceeds for the Company of US$4.7 million."
For more information:
Grown Rogue
info@grownrogue.com
www.grownrogue.com