MIRABEL, QUEBEC, CANADA - Canopy Growth Corporation and Canopy Rivers Corporation have announced a definitive joint venture agreement to form a new company, Les Serres Vert Cannabis Inc., together with Les Serres Stéphane Bertrand Inc., a large-scale tomato greenhouse operator in Mirabel, Quebec, according to a press release.
Bertrand currently produces tomatoes and other vegetables under 700,000 sq. ft. of modern greenhouse, most of which was built in 2015. The entire greenhouse will be upgraded and retrofitted for cannabis production by April 2018. With the assistance and guidance of Canopy Growth, the application for this site has been submitted; and subject to Health Canada and other standard regulatory approvals, the Company anticipates being ready to begin production by May 2018.
Under the terms of the agreement, Vert Mirabel will, subject to satisfaction of certain conditions, lease the 700,000 sq. ft. greenhouse facility from Bertrand. Vert Mirabel will also be provided with an option to acquire the property.
Vert Mirabel significantly supplements Canopy Growth's industry leading production portfolio and positions the company well in Quebec, Canada's second largest province.
"The joint venture allows us to expand our operational footprint for greenhouse production, and establish a much larger foothold in Quebec," said Bruce Linton, chairman and chief executive officer, Canopy Growth. "The fusion of Canopy's cannabis expertise with the greenhouse expertise of Les Serres Stéphane Bertrand is fantastic news for our customers and investors."
The greenhouse holds a valid Ecocert "organic" certification. Bertrand has produced organic tomatoes from the existing infrastructure and can apply their farming expertise to cannabis production in order to grow organic cannabis flowers. Vert would be the first Canopy family of brands to carry organically produced cannabis, another value-add differentiator to the industries most diverse house of brands.
As consideration for entering into and operating Vert Mirabel, Canopy Growth will, based upon various milestones and subject to required regulatory and stock exchange approvals, issue Bertrand $2.75 million of common shares in four equal tranches. To fund the development of Vert Mirabel, Canopy Rivers will contribute, in multiple tranches, an aggregate of $15 million in cash (of which $750,000 was advanced at closing), in exchange for Class A Preferred Shares with cumulative preferred dividends. In addition, Canopy Growth has agreed to purchase from Vert Mirabel all of the cannabis produced during an initial term. Canopy Growth and Canopy Rivers, combined, own 66.7% of Vert Mirabel, with Bertrand holding the remaining 33.3%.
Bertrand brings multi-generational knowledge of greenhouse operations and is currently the largest producer of Pink Tomatoes in North America. Bertrand is an experienced large scale, low cost, high-technology, hydroponic greenhouse operator, with industry leading food safety, traceability and compliance expertise, and a growing focus on organic production methods. Bertrand also brings tier one assets and a highly experienced operations team.
Canopy Growth is committed to building an international business with a strong national platform while supporting the local communities where it operates through job creation, meaningful stakeholder engagement, and local economic opportunity