MMJPhytotech
MMJ Group investment Weed Me plans to expand facility capacity by 300%
Weed Me is a licensed producer of cannabis with indoor growing facilities in Ontario, Canada, and holds cultivation, processing and sales licences.
MMJ Group Holdings Ltd (ASX:MMJ) Canadian investment Weed Me Inc plans to expand its growth opportunities following a capital raising in March 2020 which strengthened the company’s balance sheet.
Established in 2016, Weed Me is a licensed producer of cannabis with indoor growing facilities in Ontario, Canada.
The company holds cultivation, processing and sales licences under the Cannabis Act from Health Canada.
MMJ made its initial investment in Weed Me in December 2017 and has a current value of C$5.8 million in the company which comprises:
- 3.46 million shares, representing around 14% of Weed Me’s issued capital and 3.46 million warrants;
- C$1 million convertible note with a first ranking charge, bears interest at a rate of 8% per annum and is repayable on August 7, 2020; and
- As at March 31, MMJ had generated a total return 2.2 times on its investment in Weed Me.
300% capacity growth
Weed Me intends to extend its operating facility from 8,000 to 20,000 square feet which will allow for a 300% increase in capacity.
The state-of-the-art facility in Pickering, Ontario, has a current cultivation capacity of 1,200 kilograms annually, however, the planned expansion will see a tripling in numbers to 4,800 kilograms.
Infrastructure is ready for the buildout upon funding of C$6.5 million for the construction of flower rooms.
There is also an option for the company to undertake further phase-3 expansion plans on an adjacent 2-acre plot without needing additional licensing.
The plans would see a four-storey facility with 15–18 feet of clear height for each floor which will include the construction of a commercial kitchen, cultivation and processing rooms, extraction and research and development.
Weed Me has access to a population of more than 23 million in four provinces (British Columbia, Saskatchewan, Alberta and Ontario) with key contracts already in place.