The company intends to transform the property into “one of the largest biomass cultivation sites in California.”
California-based Leef Brands (CSE: LEEF) (OTC: LEEEF), formerly known as Icanic Brands, completed the acquisition of a 1,900-acre ranch in Santa Barbara County for $5.48 million, which the company intends to transform into “one of the largest biomass cultivation sites in California.”
The deal, which has been in the works for months, includes an already-sold 60% interest in the ranch for a $7 million interest-free loan, Leef said. But the company stated it will retain all control over operations at the facility, named Salisbury Canyon Ranch LLC, and will also still own 100% of all cannabis permits associated with the ranch.
The $7 million will be used to build out the cannabis grow site, the company said in a statement.
“This is a monumental milestone for LEEF as the acquisition and buildout of the Ranch will enable us to fully execute our vision of building one of the largest biomass cultivation sites in California. The buildout marks a tremendous opportunity for LEEF and lays the foundation for future expansion,” Leef CEO Micah Anderson said.
The long-term goal, CFO Kevin Wilson said, is “to slowly build out a secure supply chain that will be strategically planted to support our specific manufacturing capabilities.”
Under the terms of the acquisition, $1.1 million of the $5.48 million purchase price was due at closing, but Leef will only have to make interest payments for the next 24 months on a $4.2 million loan it took out at an interest rate of 4% to finance the acquisition.
Although the company posted a gross profit in the second quarter this year of $2.9 million, its net loss for the quarter ended June 30 was $20.3 million, with losses topping $21.7 million so far for the year.
Anderson this week expressed optimism that the potential federal rescheduling of marijuana to Schedule 3 could improve market conditions across the industry.
“The elimination of the 280E tax on our business and on our customer’s business would have dramatic and immediate positive implications for an industry that has been plagued by high taxes, high cost of capital, lack of investment capital and lack of access to traditional financial services,” Anderson said.
Read More Feedzy