Zenabis Global Inc.
The firm will begin supplying a monthly quantity to Tilray’s High Park subsidiary in October 2019. The price will depend on the product type and format that High Park elects to order.
Zenabis expects the prepaid $30 million credit to be used up within the next 12 months and it will then continue wholesaling cannabis to High Park.
“Zenabis is well-positioned to supply high-quality cannabis to High Park via this non-dilutive financing arrangement that capitalizes on our rapidly increasing annual cultivation capacity,” said chief executive Andrew Grieve.
He added that the firm’s capacity should reach 131,200 kg of dried cannabis on an annualized before deliveries to High Park are scheduled to commence in October. He does not expect the deal with High Park to impact Zenabis’ ability to supply existing customers.
The $30 million advance will provide the firm with working capital and lessen its reliance on a $60 million unsecured convertible debenture facility.
Tilray launched High Park last year to serve the Canadian recreational cannabis market. In 2019, it bought Natura Naturals Inc., now operating as High Park Gardens. This is a 662,000 sq. ft. cultivation facility, which was recently expanded following an investment of US$32.6 million.
It needs to source bulk cannabis from fellow licensed producers to create mass-market brands and it has turned to Zenabis as a supplier.
Zenabis produces medical and recreational cannabis across facilities in British Columbia, New Brunswick, and Nova Scotia. It expects capacity at these facilities to reach 131,200 kg by Q3 2019, making it a significant cultivator. Zenabis could increase production to 478,000 kg per year if it converts and builds all of its available space for production.
It has the Zenabis brand serving the medicinal marijuana market and Namaste and Blazery brands serving the adult-use sector. Namaste is not to be confused with a producer of the same name. Zenabis also produces a kombucha range called True Büch.
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