Pelorus Equity Group closed a $17.3 million debt financing agreement with Vassar Acquisitions Property Management and its cannabis operating entity, Canapa Valley Farms. The money will be used for building out Canapa’s 90,000-square-foot greenhouse and 8,500-square-foot processing facilities.
“With a deep understanding of cannabis operations and a high level of CPG experience, Vassar has already invested substantial equity into its Michigan facility,” said Dan Leimel, CEO of Pelorus Equity Group and manager of the Pelorus Fund. “This agreement will help accelerate Canapa Valley Farms’ cannabis-focused growth initiatives and collaborations, like its exclusive partnership to produce premium-quality flower and pre-rolls for award-winning Exotic Genetix in the Great Lake State.”
While some cannabis markets have shown signs of slowing, Michigan continues to flex its muscles. According to data published by the state Cannabis Regulatory Agency (CRA), the state logged $21 million in medical cannabis sales and $188 million in adult-use marijuana purchases in July 2022 – a total that is about $15 million greater than the previous monthly record set in April 2022. The majority of the sales for both markets were for flower products.
A new report, the 2022 Michigan Cannabis CFO Outlook, stated that 43% of companies are actively seeking capital at this time. Falling prices (50% over the past year) have impacted growers, but price stabilization is expected to occur in the next 1-3 years. Two-thirds (67%) of the companies surveyed that are considering selling their businesses are in the $26 to $100 million revenue range.