General Cannabis Corp (OTCQX:CANN) announced a $3 million dollar investment on Tuesday funded by Hershey Strategic Capital LP and Shore Ventures III LP, a pair of entities led by managing member Adam Hershey.
The infusion of cash is part of the company’s larger expansion strategy over the last two months. General Cannabis recently became the second publicly traded cannabis company to win approval from Colorado’s Marijuana Enforcement Division (MED) to acquire licensed cultivation, manufacturing and retail operations across the state.
Shortly thereafter, General Cannabis closed the acquisition of Boulder-based SevenFive Farm, a 17,000-square-foot light deprivation greenhouse.
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Last week, the company earned conditional approval from the MED, subject to additional local approval, to close its acquisition of Cannasseur, a Pueblo-based retail dispensary and 12,000-square-foot light deprivation greenhouse that produces a line of infused concentrates called Dabtek.
The $3 million investment is indicative of General Cannabis’ strong position, the company said.
“This significant capital infusion is a powerful statement about our team, our strategy, the market opportunity and our ability to build shareholder value,” General Cannabis CEO Steve Gutterman said in a statement. “We are excited to work with Adam Hershey to leverage the extraordinary market opportunity and competitive advantage offered by MED approval and build on the foundation of our SevenFive Farm acquisition and our planned closing of our Cannasseur agreement.”
“As an investor in the cannabis space, we evaluate many potential deals,” Adam Hershey said. “General Cannabis, which has a great team and a clear growth path, stood out from the rest. We couldn’t be more excited to become investors.”
Hershey Strategic Capital and Shore Ventures III are purchasing nearly $2.2 million worth of common stock in two tranches, the first $800,000 of which closed on May 29. The remaining $1.39 million tranche is expected to close by June 5.
General Cannabis expects to submit Hershey’s name for approval as an individual suitable investor to the MED and, if approved, will receive an additional $815,000 from the investors on the same terms.
General Cannabis, based in Denver, bills itself as the comprehensive national resource for the highest quality service providers available to the regulated cannabis industry. Although the coronavirus pandemic has imposed certain difficulties, Gutterman believes the company is set up for success.
“Even in the midst of the tremendous headwinds facing our country and the economy, we believe we are as well-positioned as any company in the space to succeed, and this investment is a further demonstration of that,” Gutterman said. “I want to acknowledge the extraordinary group of executives and professionals in our company, including everyone in our NBC division, our finance, accounting and M&A teams and our new colleagues at SevenFive Farm, whose hard work and focus have put General Cannabis in this position to succeed.”
Contact Andrew Kessel at [email protected]
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