TransCanna Holdings has finalized the acquisition of “arguably the largest vertically integrated cannabis centric” multi‐purpose facility in California, setting the stage for edification of a self-contained cannabis hub operation that includes integrated divisions for transportation and distribution, cultivation and nursery, lab extraction, manufacturing and packaging.
"The three-story, 196,000-square-foot facility is part of a larger 5.5-acre property purchase that the company envisions as green space, where up to 600,000 square feet of new structure can be built to grow TransCanna’s own biomass for its brands," the company explains.
“Simultaneous to putting our efforts into purchasing the facility, we’ve been searching extensively for the key individuals who will be overseeing the day to day operations. We’ve made great strides over the past several weeks and should be able to start making announcements by the end of the month,” TransCanna CEO Jim Pakulis stated.
The total purchase price was $15 million. The seller of the building agreed to a carry-back note of $6.75 million at seven percent interest for up to 13 months, with an initial maturity date of October 15 and the possibility of a six-month extension under a share and share warrant issuance agreement.
A brokered private placement for five million units of shares and warrants to help fund the purchase was increased to eight million units for gross proceeds of C$16 million after the investment vehicle was oversubscribed in March.
The seller completed $8 million in renovation improvements prior to the purchase to bring parts of the site’s potential up to U.S. Department of Agriculture standards for safety and sanitation in processing biomass, with cannabis packaging and processing equipment included. "Making the existing facility operational would require an additional investment of approximately $1.5 million. The structure has not yet been licensed for cannabis production, but we expect to use it for the varied aspects of its cannabis production and distribution operations as those permissions are granted," the company concludes.