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BMO Backs Emerald Health Therapeutics’s Plans to Expand Cannabis Grow Facility

February 19, 2019, 09:23 AM
Filed Under: Cannabis
Related: Cannabis

Emerald Health Therapeutics announced that its 50%-owned joint venture for large-scale, low-cost, high-quality cannabis production, Pure Sunfarms Corp. (“Pure Sunfarms”), has entered into a credit agreement with Bank of Montreal (“BMO”) as agent and lead lender and Farm Credit Canada (“FCC”) as lender (together with BMO, the “Lenders”) in respect of a CAD$20 million secured non-revolving term loan (the “Credit Facility”). Pure Sunfarms intends to use the funds available under the Credit Facility to finance the final costs of converting its 1.1 million square foot greenhouse for cannabis production, the vast majority of which was completed in January of this year. The funds available under the Credit Facility may also be used for general corporate purposes.

“Pure Sunfarms is proud to enter into this Credit Facility with these two highly respected institutional lenders,” said Mandesh Dosanjh, President and Chief Executive Officer, Pure Sunfarms. “This is truly an exciting time for our organization and we are appreciative of the support of each as Pure Sunfarms establishes itself as a vertically integrated supplier to the Canadian cannabis market.”

“As Pure Sunfarms approaches operational positive cash flow, completion of a non-dilutive financing with these financial institutions is an excellent accomplishment,” said Dr. Avtar Dhillon, President and Executive Chairman of Emerald. “We look forward to Pure Sunfarms’ rapid quarterly growth through this year as it comes fully onstream.”

The Credit Facility, which matures on February 7, 2022, is secured by Pure Sunfarms’ greenhouse facility, and contains customary financial and restrictive covenants.

With conversion of all growing areas, totaling more than one million square feet, of its greenhouse facility completed, Pure Sunfarms expects to be in production in all quadrants of the facility in the first quarter of this year. The technologically-advanced Delta 3 greenhouse design is based on decades of large-scale, low-cost agricultural production experience and extensive cannabis expertise, resulting in a state-of-the-art facility with 16 grow rooms optimized for year-round harvesting (more than 80 harvests annually).

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