Staff
CannTrust Holdings Inc. (CNTTF), a licensed producer of medical cannabis under the Health Canada Access to Cannabis for Medical Purposes Regulation (“ACMPR”) program, announced that it has entered into an agreement with a syndicate of underwriters co-led by Echelon Wealth Partners Inc. and Bloom Burton Securities Inc. that have agreed to purchase, on a bought deal basis, 3,000,000 common shares at a price of $5.00 for aggregate gross proceeds to CannTrust of $15,000,000.
The deal is expected to close on or about November 30. The net proceeds will be used to fund the Phase 2 build out of CannTrust’s recently licensed Niagara Greenhouse Facility and for general corporate and working capital purposes. CannTrust is listed as a “Grey Market” stock on the OTC Markets Exchange.
Eric Paul, CEO of CannTrust, stated, “We recently announced record revenues and patient numbers and are continuing to see strong trends that we believe will take up full demand from Phase 1 of our recently licensed 430,000 Niagara Greenhouse Facility. ”
Brad Rogers, President at CannTrust, added, “The pending legislation to legalize the adult consumer recreational use of cannabis provides a further major opportunity for the Company. With the completion of all phases of our Niagara expansion, we plan to have in excess of 1,000,000 square feet of production capacity. This will give us the ability to acquire a substantial share of the increased demand arising from this new market.”
According to a company statement, “CannTrust expects the first harvest from its Niagara Facility in early November 2017, with full utilization from Phase 1 expected in December 2017. The planned Phase 2 expansion at this Facility is anticipated to be completed and in cultivation towards the middle of 2018. Phase 1 and 2 should conservatively provide the Company with an additional 40,000 kilograms of annual growing capacity.”
In addition to the bought deal announcement, CannTrust also stated that it had taken on a $15 million mortgage for the Niagara Greenhouse Facility subject to lender approval. If the mortgage is approved, that and the bought deal will fully fund the company through its Phase 2 expansion. CannTrust currently operates a 50,000 square foot state-of-the-art hydroponic facility in Vaughan, Ontario and with this recently received Health Canada Cultivation Licence is set to begin production on Phase 1 of its 430,000 square foot cultivation facility in the Niagara region.
