Aleafia Adds Over $8 Million in Non-Dilutive Cash to its Balance Sheet
Aleafia Health (TSX: ALEF) (OTCQX: ALEAF), the leader of the Canadian outdoor cannabis space announced this morning it has increased its lead over the other three top outdoor players WeedMD (TSXV: WMD) (OTCQX: WDDMF), 48North (TSXV: NRTH) (OTCPK: NCNNF), and CannTrust (TSX: TRST) (NYSE: CTST).
Aleafia reported to investors that it has secured an additional 60 acres of land directly adjacent to the company’s Port Perry outdoor grow facility. Aleafia, through its wholly-owned subsidiary, Aleafia Farms paid $1.2 million for the prime plot of land. The deal officially closed on September 3, 2019.
The company is now in a great position to initiate phase 2 of its outdoor grow expansion plan. Aleafia now boasts a total of 86 acres of premium land dedicate for growing cannabis outdoors.
With the land acquisition closed, Aleafia will now make arrangements to amalgamate its new 60-acre property’s address with the Port Perry facility’s address. The amalgamation of addresses will allow Aleafia Farms to seek an amendment to its current Health Canada license instead of having to apply for a brand new cultivation license.
Check out Aleafia’s Aerial Video Footage of its Port Perry Outdoor Grow Facility
Video source: Aleafia Health YouTube
Phase 2 Expansion Set to Commence
The buildout of Aleafia’s phase 2 outdoor grow expansion will begin this month and the company is planning to submit a full evidence package to Health Canada later this year. The purpose of submitting an evidence package is to demonstrate to Health Canada that a cannabis facility is ready to grow.
Once Aleafia receives all the proper regulatory approvals the company will see it’s Port Perry outdoor facility boost its size from 26 acres (1.1 million sq ft) to 86 acres (3.7 million sq ft). Aleafia will use existing on-site buildings and convert them into cannabis drying rooms as well as accommodations for its staff.
The new combined outdoor site will see Aleafia benefit through a reduction in expenses gained by the increased level of production (economies of scale). The company also expects to see its regulatory processes streamlined in comparison to the processes required for a brand new facility.
“We are delighted to build on the success of our 2019 outdoor cannabis crop to date and significantly expand our low-cost production operations for next year. Being one of a handful of LPs to operate an outdoor facility this year has positioned us well for a major expansion in 2020,” said Aleafia Health CEO Geoffrey Benic.
Emblem Sells Surplus Land for $8 Million in Cash
In other Aleafia related news, the company’s other wholly-owned subsidiary Emblem closed on the sale of its unused Brant, Ontario land for net proceeds of $8.2 million in cash. Nearly $10 million in non-dilutive capital will be a welcome addition to Aleafia’s balance sheet.
The surplus 43-acre property previously owned by Emblem is located at 539 Paris Road in Brant, Ontario. The deal closed on August 28, 2019.
“These two transactions demonstrate a strong allocation of capital and fiscal prudence. With an additional $7 million cash on hand and 60 new acres of low-cost cultivation area, we are well-positioned for sustained future growth,” added Benic.
After gapping open 1.9% in reaction to this morning’s news, shares of ALEF were unable to hold those gains as the downward pressure of the cannabis market was too strong. ALEF stock ended up closing today’s trading session at $1.02 per share, down 2.86% on the day.
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