Investing in California’s new (Green) Gold Rush
FinCanna Capital Corp. (CSE: CALI | OTCQB: FNNZF) is a royalty finance company uniquely focused on investing in licensed medical cannabis businesses with a focus on California. FinCanna’s primary objective is to form part of a “whole capital” solution for businesses in the licensed medical cannabis sector by providing capital investment for a percentage of the future revenues. It seeks to invest in best-in-class businesses by aligning the business and financial interests of existing owners and operators with those of FinCanna.
According to Market Research, worldwide spending on legal cannabis is expected to hit $57 billion by 2027. North America will continue to be the leader in legal buyers as the $9.2 billion spent in 2017 is expected to grow to $47.3 billion by 2027.
FinCanna has an agreement in place with Cultivation Technologies Inc. (CTI) under which the company will provide capital towards the development of CTI’s fully entitled Coachella Campus. Home to this site is Coachella Premium, CTI’s exclusive brand of premium medical cannabis. This 111,500 ft.² property will run the full wholesale supply chain for licensed medical cannabis, including a large-scale indoor medical cannabis facility on six acres of land.
In exchange for funding the development of the Coachella Campus, FinCanna will receive a royalty payment of 14 percent of CTI’s Coachella Campus revenue. The Campus will also have on-site testing which will screen the product against industry standards and future-state compliance while also testing for pesticides. FinCanna has a secured loan to CTI of US$6 million earning interest of 20% per annum.
On June 7, 2018 it was announced that Cultivation Technologies Inc. (CTI), with its first investment in California, has achieved US$1 million in cumulative revenue since it commenced commercial operations in late January 2018. Andriyko Herchak, President, CEO and Director of FinCanna Capital said, “We are very pleased to see the sales performance of CTI which has translated into its first US$1 million in revenue at only a fraction of its capacity. With its sales team in place building out an ever-expanding distribution footprint, and it’s manufacturing ramping up we see a bright future as we move into the second half of 2018.”
Miguel Motta, President & CEO of Cultivation Technologies, Inc. also added: “We are quite encouraged about the revenue growth CTI is experiencing in just a few short months since launching operations. We’ve learned a lot about the market and expect to build upon our initial success in 2018 and beyond.” CTI is working to maximize the commercial potential of its extraction facility, which can process an estimated 6,000 pounds of biomass per month, which translates to approximately 3.7 million grams of raw cannabis oil annually. FinCanna is entitled to receive 50% of the profits from this extraction facility.
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FinCanna’s second royalty investment is with Green Compliance Inc., which offers a state-of-the-art enterprise compliance and point-of-sale software solution (“ezGreen”) for licensed medical cannabis dispensaries and cultivators. On June 13 Fincanna announced that ezGreen Compliance has launched its advanced “ezGreen Compliance 2.0” software solution. EzGreen has executed a strategic partnership agreement with a major technology solution provider in the cannabis industry to offer the ezGreen Compliance solution to its customer base of 1,000+ dispensaries across the United States. It looks like another astute move by FinCanna.
FinCanna have a market cap of C$ 24m.
With the every growing (no pun intended) market and future demand for medical cannabis, FinCanna may have found that next California (green) gold rush.
Matthew Bohlsen holds a Graduate Diploma in Applied Finance and Investment (similar to CFA), and a Graduate Diploma in Financial Planning. He has 30 years ... <Read more about Matthew Bohlsen>