Grown Rogue International's majority held subsidiary GR Michigan, has entered into a purchase agreement with Golden Harvests, a fully licensed Michigan based operator with an approximately 80,000 sq. ft cultivation facility located in Bay City, Michigan. "The agreement provides Grown Rogue the option to acquire a 60% controlling interest of Golden Harvests ("Option") pending Municipal and State regulatory approval," the team with the company explains.
"Michigan remains an important location for our continued growth and Grown Rogue has been committed to finding the right, fully-licensed partner for a successful expansion into this market," said Obie Strickler, chief executive officer Grown Rogue. "By leveraging over a decade of operational, grow and sales experience in Oregon, we plan to build on Golden Harvests’ solid foundation to increase yields, develop new grow rooms and establish partnerships with the best retailers in the state."
Golden Harvests facility and management service agreement
"Approximately 10,000 sq ft of the facility is already online and operating with three separate flower rooms, vegetative, clone, packaging, trimming, and other infrastructure required to operate a best-in-class cultivation facility," the company points out. "Golden Harvests is currently producing approximately 600lbs annually and with improvements by the experienced Grown Rogue management team, it is anticipated production in 2020 will approach 1,500lbs and 3,500lbs in 2021."
Grown Rogue has also signed an exclusive management services agreement with Golden Harvests to immediately begin providing consulting services for a variety of business functions primarily focused on cultivation, sales, branding and marketing, and compliance.
"Grown Rogue has mastered the art of indoor flower production during its past three years in Oregon, which has been proven out through numerous awards, and will bring expertise in facility design, improved growing techniques and methods and facility build-out/expansion to the existing operations. In addition, Grown Rogue has committed to investing an additional $1,200,000 of capital improvements at the facility to increase efficiencies and cultivation capacity."
"Grown Rogue takes great pride in its team, who are some of the top talent in the country, and we bring a level of experience not yet seen in Michigan," said Strickler. "We are relocating our most experienced indoor grower to Bay City to ensure this facility produces at the same quality and consistency our customers have come to expect from our flower. In addition, our sales, marketing, and operations leadership will all be spending significant time in state to ensure that the SOPs that have led to success in Oregon are duplicated here."
"Golden Harvests was one of the first licensed Michigan operators receiving a Class C grow license in late 2018 with their first harvest in the spring of 2019. Building upon the positive reputation and strong sell in of Golden Harvests flower, Grown Rogue has already begun conversations with retail partners across the state to understand their needs and present a plan that will build long lasting relationships that drive top line and profitability for all parties while inspiring, educating and empowering consumers.
"Grown Rogue has proven to be one of the top producers in the industry and their unrelenting focus on quality, consistency and consumer education made this partnership a natural fit," said Dave Pleitner, founder and owner of Golden Harvests. "The Michigan market has untapped growth potential and with Grown Rogue’s help, we plan to lead the charge with best-in-class flower cultivated right here in Michigan."
Grown Rogue & Decibel terminate letter of intent
As Grown Rogue shifts its attention to the tremendous opportunity in Michigan, it has also announced that the letter of intent previously signed with Decibel Farms, Inc. has been terminated by mutual agreement. Obie Strickler, Chief Executive Officer of Grown Rogue commented, "The current market conditions forced both companies to evaluate our short- and long-term goals and it became apparent that continuing forward with the proposed acquisition was not in the best interests of either Grown Rogue or Decibel shareholders". The agreement has been terminated with a full release and no further obligations for either party.