Fiore Cannabis has signed a non-binding Letter of Intent on February 15, 2021 to sell a surplus cultivation license for its Apex cannabis cultivation and production facility in Las Vegas, Nevada to Allied Corp. for US$1.5 million. A definitive agreement is expected to follow within 30 days. Allied is a company actively increasing its involvement in the international medical and speciality cannabis space.
"The licence sale we are negotiating with Allied pushes us further along our strategic path. We expect to work creatively and effectively with Allied's CEO Calum Hughes and his team to make the license productive and generate benefits for both companies. Funds from this sale can enable Fiore to speed up the expansion program for our Apex facility to enhance cultivation capacity and deliver additional cannabis products into the growing and high-margin Nevada market," said Erik Anderson, President and CEO of Fiore Cannabis.
The two companies have developed initial terms that will see them working together as Allied constructs a facility which Fiore would then operate in partnership. A revenue-sharing agreement for incremental sales from the facility will be negotiated between the parties. Due to its expertise, Fiore will be assisting with the genetics and selection of cannabis strains for the Allied operation as well as consulting on the marketing of eventual cannabis products through Fiore's already established medical and retail partnerships.
Fiore plans to apply the proceeds from this sale to its expansion program for the Apex facility. A significant increase in cultivation space is being considered at this time. Earlier this month, the Company reported successful crop results in January for the current footprint of the site which was sold immediately into the Nevada retail market.
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