MMJ Group Holdings Ltd (ASX:MMJ) Canadian investee Harvest One Cannabis Inc (CVE:HVT) (OTCMKTS:HRVOF) has entered into an agreement to sell its United Greeneries cannabis cultivation and processing business to Costa Canna Production Ltd Liability Partnership for C$8.2 million.
Sale of the business in Duncan, British Columbia, and its related operations confirms Harvest One’s strategic transition to a cannabis-focused Consumer Packaged Goods (CPG) company.
The Canadian company will retain all assets and intellectual property associated with its Cannabis 2.0 product portfolio including, the company’s LivReliefTM cannabis-infused topicals currently on sale in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.
Harvest One chief executive officer Andrew Bayfield said: “The agreement to sell our Duncan Facility and its related operations represents a strategic step forward for Harvest One, further divesting from its capital intensive cultivation activities and firmly establishing ourselves as a cannabis-focused CPG company.
“We will continue to focus on expanding our core brands of LivRelief™, Dream Water™ and Satipharm together with the commercialisation of Cannabis 2.0 product offerings in Canada.”
Bridge financing facility
In addition, Harvest One has secured a C$1.5 million bridge financing facility from Costa LLP, which will be made available to the company upon signing the agreement.
It is the intention of the parties that this bridge facility will mature and be repaid in full upon the closing of the transaction.
In order to facilitate the availability of this facility, MMJ has agreed to subordinate its security interest in the Duncan Facility, to Costa LLP.
MMJ’s C$2 million loan facility will be repaid from the settlement of the Duncan Facility.