The supplied cannabis will mainly be dedicated to Harvest One's expanding cannabis-infused health, wellness, and self-care products
() (OTCMKTS:HRVOF) has acquired a majority interest in Ontario-based private group Greenbelt Greenhouse Ltd, which will supply the firm with high-quality greenhouse-grown cannabis from a 152,000 square foot facility.
Harvest One has bought $3.25 million shares of Greenbelt, representing an initial 52% controlling interest.
The Vancouver company's shares jumped 6.3% to C$1.01 in Canada, while US-listed shares added 4% to US$0.76 on the OTC Markets.
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The supplied cannabis will mainly be dedicated to Harvest One's expanding cannabis-infused health, wellness, and self-care products under the Dream Water and Satipharm brands.
It will also be used for expanding products from the recently announced acquisition of Delivra, following the closing of that transaction.
Greenbelt's facility also comes with a 42,000 sq ft headhouse which, Harvest says, 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.
The deal gives Harvest access to a potential 15,000 kgs, or more of flower, per year, once licensed.
"We are excited to acquire a majority interest in Greenbelt which significantly increases Harvest One's cannabis supply, as we continue our formulations on cannabinoid infused health, wellness, and self-care products across our house of brands," said Grant Froese, CEO of Harvest One.
"In addition to the exceptional greenhouse facility, this acquisition also gives Harvest One space to build out its own extraction capabilities upon licensing which fulfils our goal of vertical integration from cultivation, to processing, extraction and, ultimately, premium infused products."
Alongside Harvest One's investment, Greenbelt raised a further $1 million of equity from outside investors, which along with Harvest investment has been used to retire indebtedness in full.
Bridge loan
Harvest One has also entered into a loan facility agreement with Greenbelt, in which it will provide a secured bridge loan of up to $3.5 million bearing interest of 4.5% over one year.
Greenbelt may draw down funds for the purpose of completing the planned retrofit of Greenbelt's greenhouse facility.
Harvest One and Greenbelt have also entered into an offtake agreement, under which Harvest will be entitled to purchase a minimum of 50% of the offtake from Greenbelt's harvest production following Greenbelt's licensing.
Shares in Harvest One zipped up around 5% in Toronto to $1.
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