One of the historically biggest investors in the private-investment-in-public-equity markets has invested in the second PIPE from Future Farm Technologies Inc., which is using proceeds to fund the acquisition of a dispensary in Massachusetts.
Yorkville Advisors LLC is the investor. Yorkville has invested some $4.3 billion in 384 PIPE transactions.
Future Farm Technologies Inc. builds vertical growth systems that combine stacking with lighting to allow for more efficient plant growth than traditional ground-based agriculture.
The Canadian company has projects throughout North America, including California, Florida and Maryland, according to a Tuesday, March 13, news statement about the PIPE.
"The Company's business model includes developing and acquiring technologies that will position it as a leader in the evolution of Controlled Environment Agriculture (CEA) for the global production of various types of plants, with a focus on cannabis."
The Vancouver, British Columbia-based company has made several investments in U.S. cannabis companies. The current PIPE transaction involves the acquisition of dispensary assets in Attleboro, Mass.
"In January 2018, Future Farm signed a Letter of Intent to acquire an interest in Bristol County Wellness Center Inc.," the company said in the news statement.
"BCWC was recently awarded a special permit from the City of Attleboro and a provisional license from the Department of Public Health to build and operate a 24,700-sq ft. RMD [registered marijuana dispensary] that will grow and sell medical marijuana, plus two additional dispensaries upon approval. This vertically integrated license allows BCWC to build out its facility and engage in cannabis cultivation, processing and retailing."
The financing, the second $4 million deal with Yorkville, consists of 18-month, 8% secured convertible debentures and 3-year warrants. The debentures' conversion price equates to a 15.6% discount.
Moody Capital Solutions Inc. was the placement agent.
The company also received about $2.55 million from warrant exercises in January.
This month the company also announced the acquisition of a dispensary in Puerto Rico.
Future Farm's Clinica Verde dispensary is located in the vibrant Condado neighborhood of San Juan. The company acquired interests in other local cannabis licenses earlier in the year.
At the beginning of March, Future Farm announced that it had also acquired a 10-acre greenhouse near Orlando, Fla. The Apopka-facility is conveniently close to Orlando and its tourist traffic, and according to the company's figures, the local cannabis market is growing quickly.
"As of July 2017, Florida had approximately 26,000 registered medical cannabis patients, and by October the number of registered medical cannabis patients surged to 38,000," the company said in a March 1 news release.
"It is anticipated that these numbers will likely continue to grow significantly over the next few years, due to the large number of retirees residing in Florida. It is expected that the Florida cannabis market will be only second in size to California, which in the last quarter of 2017 had 34 percent market share of legal pot sales. Colorado, Washington and Oregon had 41 percent share combined as of the same time period."
At the end of January, Future Farm also leased part of a building it will use to produce cannabidiol, or CBD, oil.
"The property is perfectly suited for the cultivation and processing of hemp into CBD oil, as it has high ceilings for vertical growing, a turnkey commercial kitchen and 1,600-amp, 480-Volt 3 phase electric systems," the company said in a Jan. 31 news statement.
"Future Farm plans to use this building to germinate 250,000 seeds over the next few months, which then will be planted to meet the summer growing season. The Company expects the seeds to be feminized Cherry Wine hemp CBD strains that test in compliance of hemp laws of having .03% THC or less while averaging 15% CBD."
Cherry Wine is a strain developed by Little Rock, Ariz.-based hemp genetics specialist Tree of Life Seeds, which is looking for investors. https://treeoflifeseeds.com/invest/
Users of CBD oil for therapeutic purposes want the product to have a low THC content. They aren't trying to get high -- they are just trying to get well.