Lowell Farms has closed the sale-leaseback transaction with New Wilston Associates, LLC, pursuant to which Lowell SR LLC, a subsidiary of the Company, has sold its drying and midstream processing facility in Monterey County, California, for aggregate consideration of US$19.4 million, including the Buyer’s assumption of the existing mortgage on the Facility.
Concurrent with the closing of the sale, Lowell SR LLC entered into a 10-year lease agreement with the Buyer for the Facility. The Company will continue its permitted cannabis drying and processing at the Facility, as it has since it acquired the Facility in 2021. The Facility is a 10-acre, approximately 40,000 square feet facility which the Company utilizes for cultivation and processing of the Company’s cultivation and third-party partners. The Company purchased the Facility in June 2021 for an aggregate purchase price of US$19.2 million.
“The sale-leaseback is just one part of our ongoing restructuring efforts to implement cost-cutting measures and drive efficiencies in order to best position the Company to drive value for our shareholders,” says Lowell Farms’ Chairperson of the Board, Ann Lawrence.
“As previously announced on March 15, 2023, the Company entered into a letter of intent with the Company’s existing noteholders to sell certain intellectual property assets in exchange for the forgiveness of indebtedness, and while we had anticipated closing by May 15, we now expect the transaction to close by the end of this quarter.”
Total consideration received includes the assignment of the outstanding principal balance on the mortgage, accrued but not yet paid interest, and other accrued liabilities totaling US$10.3 million. The Company valued the real property and capitalized assets at approximately US$15.9 million and expects to recognize a gain of approximately US$3.5 million after closing and other transaction-related costs.
For more information:
Lowell Farms
www.lowellfarms.com