Harvest One Takes Majority Stake in Greenbelt Greenhouse

Harvest One Takes Majority Stake in Greenbelt Greenhouse
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Harvest One Cannabis (TSXV: HVT) (OTCQX: HRVOF) has acquired a 52% stake in Hamilton, Ontario-based Greenbelt Greenhouse Ltd.

Harvest One said the acquisition will boost its production by supplying greenhouse grown cannabis from Greenbelt’s 152,000 square foot facility. In addition to the greenhouse, the Greenbelt facility also has a 42,000 square foot headhouse, which is an ideal location for future extraction and processing capabilities.

Greenbelt has an application pending with Health Canada for a standard cultivation license and a standard processor license under the Cannabis Regulations.

As a result of the deal, Harvest One will now control significant production to supply new infused formulations of existing brands already controlled by the company.

“The transaction ensures good value for shareholders and provides economical access to a potential 15,000 kgs. or more of flower per year, once licensed. Offtake agreement ensures access to additional supply without further significant capital investment,” notes a Harvest One statement.

Deal Structure and Terms

Harvest One signed a securities purchase agreement with Greenbelt under which Harvest One acquired $3,250,000 of treasury common shares of Greenbelt.

In addition, under a share purchase agreement between Harvest One and certain existing shareholders of Greenbelt, Harvest One acquired additional common shares of Greenbelt, giving Harvest One a 52% controlling interest in Greenbelt.

In consideration for the shareholder shares, Harvest One issued 3,521,600 common shares, representing approximately 1.9% of the issued and outstanding shares of the company.

Additionally, Harvest One inked a loan facility agreement with Greenbelt to provide a secured bridge loan facility to Greenbelt of up to $3,500,000 bearing interest of 4.5% over a 1-year term. Greenbelt may draw down funds for the purpose of completing the planned retrofit of its greenhouse facility.

Further, Harvest One subsidiary United Greeneries and Greenbelt entered into an offtake agreement under which United Greeneries will be entitled to purchase a minimum of 50% of the offtake from Greenbelt’s harvest production following Greenbelt’s licensing

The deal is subject to final approval of the TSX Venture Exchange.