Hero Technologies has finalized a real estate purchase agreement for a 10-acre property in Vassar, Michigan. The purchase price is $600,000. The company plans to use the property as its base of cannabis operations in the state, including indoor and outdoor growing, processing, wholesaling, and selling directly to consumers. The property is zoned for cannabis use. The purchase is expected to close in October or November of 2022. Closing is conditioned on obtaining cannabis licenses from the Vassar Township, signing a land contract, and completing the down payment. The company paid $10,000 upon signing the purchase agreement as an earnest money deposit.
Concurrently, the company signed a binding term sheet for a land contract that will finance the purchase. Under the terms of the term sheet, the seller, Vassar Enterprises LLC, will receive $75,000 as a down payment, a 4.75% annual interest rate, low monthly installment payments for three years, and the principal balance payoff due five years from the date of the final contract. The company would also have the right to prepay any or all principal. The purchase was negotiated directly between Vassar Enterprises and the company, with no broker fees.
As part of its purchase, the company would also receive any and all existing environmental reports relating to the property. The seller stipulated in the purchase agreement that the property has no known environmental issues.
Hero Technologies will lease the property to Blackbox. Hero Technologies' subsidiary in Michigan, BlackBox Systems and Technologies LLC, projects rapid growth after establishing operations in Vassar. BlackBox has already secured pre-qualification approval in Michigan for Adult and Medicinal Use cannabis licenses. The company's strategy focuses on greenhouses that use a proprietary aeroponic growing system and advanced quality and safety controls to produce high-yield, high-quality cannabis. The company expects to sell its cannabis products through wholesale and retail channels.
"We are delighted to report this important milestone in our company's history," said Hero Technologies' CEO Gina Serkasevich. "Michigan is a key market for us, with legal cannabis sales expected to increase as much as 55% in 2022 to $2.8 billion, according to data from the Michigan Marijuana Regulatory Agency. Our state licensing pre-approval is in place, and we have made substantial progress in planning to deploy our proprietary cannabis cultivation system. Accordingly, we think the company is exceptionally well positioned to capitalize on the booming Michigan cannabis market and generate a well-deserved return for our investors."