Flower One Signs Sale-Leaseback Agreement with Treehouse Real Estate Investment Trust, a Leading Cannabis REIT
Flower One Holdings Inc. (“Flower One” or the “Company”) (CSE:FONE, OTCQX:FLOOF) today announced that one of the Company’s subsidiaries has entered into a sale-leaseback agreement (the “Agreement”) with Treehouse Real Estate Investment Trust, Inc. (“Treehouse”) for the Company’s 25,000 square-foot indoor cultivation and production facility in North Las Vegas, including the adjacent vacant lot acquired early in 2019 (collectively, the “Neeham Property”). Flower One is finalizing plans to build a state-of-the-art commercial kitchen and manufacturing space on the Neeham Property and expects to start construction by the second quarter of 2020. Treehouse will purchase the Neeham property for US$20,000,000 (the “Purchase Price”).
The Company, through one of its subsidiaries, will lease the Neeham Property from Treehouse for a term of 20 years with two 10-year extension options. As part of the Agreement, Treehouse will have a five-year right of first offer on future sale-leasebacks by the Company.
“Flower One is thrilled to form a long-term partnership with Treehouse, enabling us to access significant capital to continue our expansion in Nevada and potentially beyond,” said Kellen O’Keefe, Chief Strategy Officer at Flower One. Flower One is actively pursuing multi-state opportunities and plans to utilize its partnership with Treehouse in order to do so.
“Flower One is a premier producer of high-quality products for the top brands in the cannabis industry,” said Ray Lewis, President and CEO of Treehouse. “We are pleased to meet their financing goals and we look forward to a long and mutually beneficial relationship with Flower One.”
“Treehouse provides an excellent source of non-dilutive capital for Flower One’s growth strategy and they bring the utmost professionalism to the industry” said Geoff Miachika, Chief Financial Officer at Flower One.
The Company expects the Agreement to close on or before November 16, 2019 (the “Closing”). The Company has been advanced the Purchase Price as a loan, which bears interest at 15% annually and the Company expects to repay upon Closing. The Company will use the net proceeds for facility improvements at the Neeham Property and for general working capital and operational purposes.
About Flower One Holdings Inc.
Flower One is the largest cannabis cultivator, producer, and full-service brand fulfillment partner in the state of Nevada. By combining more than 20 years of greenhouse operational excellence with best-in-class cannabis operators, Flower One offers consistent, reliable, and scalable fulfillment to a growing number of industry-leading cannabis brands. Flower One’s flagship 400,000 square-foot greenhouse and 55,000 square-foot production facility is used for large scale cannabis cultivation, processing, and manufacturing. Flower One also owns and operates the Neeham Property, with 25,000 square-feet of indoor cultivation and a commercial kitchen that will produce several of the nation’s top-performing edible and beverage brands. Flower One produces a wide range of products ranging from wholesale flower, full-spectrum oils, and distillates to finished consumer packaged goods including flower, pre-rolls, concentrates, edibles, beverages, and topicals for the top-performing brands in cannabis.
The Company’s common shares are traded on the Canadian Securities Exchange under the Company’s symbol “FONE” and in the United States on the OTCQX Best Market under the symbol “FLOOF”. For more information, visit: https://flowerone.com.
Forward Looking Statements
Statements in this press release that are not statements of historical or current fact constitute “forward looking information” within the meaning of Canadian securities laws and “forward looking statements” within the meaning of United States securities laws (collectively, “forward-looking statements”). Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could cause the actual results of the Company to be materially different from historical results or from any future actual results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “believes,” “belief,” “expects,” “intends,” “anticipates,” “potential,” “should,” “may,” “will,” “plans,” “continue” or other similar expressions to be uncertain and forward looking.
Forward-looking statements may include, without limitation, statements relating to the Company’s ability to close the sale-leaseback transaction with Treehouse; timing of repayment of the Treehouse loan; the Company’s ability to build a state-of-the-art commercial kitchen and manufacturing space on the Neeham Property and to expend in Nevada and potentially beyond; the Company’s long-term partnership with Treehouse; the Company’s leadership as a cannabis cultivator, producer and full-service brand fulfillment partner; the Company’s ability to offer consistent, reliable and scalable fulfilment to its brand partners; and the production of the nation’s top-performing edibles and beverage brands.
The Company is indirectly involved in the manufacture, possession, use, sale and distribution of cannabis in the recreational and medicinal cannabis marketplaces in the United States through its subsidiary Cana Nevada Corp. Local state laws where Cana Nevada Corp. operates permit such activities; however, these activities are currently illegal under United States federal law. Additional information regarding this and other risks and uncertainties relating to the Company’s business are contained under the heading “Risk Factors” in the Company’s management discussion and analysis dated August 13, 2019 (the “MD&A”) filed on its issuer profile on SEDAR at www.sedar.com.
The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement, the “Forward-Looking Statements” section contained in the Company’s most recent MD&A. All forward-looking statements in this press release are made as of the date of this press release. The forward-looking statements contained herein are also subject generally to assumptions and risks and uncertainties that are described from time to time in the Company’s public securities filings with the Canadian securities commissions, including the Company’s most recent MD&A.
Although Flower One has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on obtaining regulatory approvals; investing in target companies or projects that are engaged in activities currently considered illegal under United States federal law; changes in laws; limited operating history; reliance on management; requirements for additional financing; competition; hindering market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry and; regulatory or political change.
Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. Flower One Holdings disclaims and does not undertake any intention or obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.