MJardin Closes $9.6m Nevada Facility Sale

MJardin Group, Inc. [stock_market_widget type="inline" template="generic" color="default" assets="MJAR.CN" markup="(CSE: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"] has raised US$9.6 million by selling its production facility in Las Vegas to real estate investment group Innovative Industrial Properties.

The deal closed today and it includes a 20-year leaseback agreement, which will allow MJardin to continue producing cannabis there until 2039. There is also the potential to extend the lease agreement to 2049, as it includes two five-year rights of renewal.

The 30,000 sq. ft. facility is expected to produce around 5,700 kg of marijuana per year.

“This transaction unlocks valuable capital to be put towards further expansion of MJardin’s business lines,” said chief executive and chairman Adrian Montgomery.

MJardin is based in Denver and Toronto. It provides turnkey services for the blossoming global cannabis industry and it invests in a range of up-and-coming businesses.

The firm has nine fully-owned or jointly-owned facilities, which should yield 31,000 kg of cannabis on an annualized basis by 2020. It manages a number of other facilities on behalf of their owners, taking its total managed capacity to 65,000 kg. MJardin has 450 staff across the world.

It has endured a somewhat tumultuous year, as founder Rishi Gautam resigned from the board of directors with immediate effect in May, along with chief strategy officer Francis Knuettel II and chief operating officer Jorge Boone.

That followed a loss of C$84.3 million in 2018, a sharp swing from the C$1.5 million profit it delivered the previous year, while the CSE temporarily suspended MJAR.

But the ship seems to have been steadied over the past couple of months.

Its share price went from $4.79 at the start of 2019 to just $1.08 by May 15, but it has since increased to $1.53 this week.

MJardin has just appointed global controller Wendy Xue as interim chief financial officer, replacing the outgoing Chris Seto, while it searches for a permanent replacement.

It has also added Chief Glenn Hudson of Peguis First Nation to its board. Peguis is MJardin’s retail partner and they are teaming up to build strip malls with chronic care clinics that encompass cannabis treatment.

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The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Martin Green is an experienced journalist with a strong focus on the cannabis, alcohol, and gambling industries. He is particularly interested in the political issues affecting the global marijuana trade, and he has a keen focus on regulation changes and legal topics. He holds a BA English Literature, MA Creative Writing and a National Qualification in Journalism diploma. He has worked in journalism since 2009 and written for a broad range of newspapers, business titles and magazines, including The Sun, The Metro, The Journal, Livestrong, Drinks Retailing News, Harpers, Sportsbook Review, Vital Football, Essex Live and Surrey Live. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.
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