California is set to legalize recreational marijuana in 2018 and the market is exected to be the largest in the world.
We are favorable on this opportunity and have been keeping an eye out for investments levered to this market.
Today, we want to highlight an opportunity after FinCanna Capital Corp. (Pre-IPO) and Astar Minerals Ltd. (TAR.V) announced that FinCanna will share 50% of the profits from Cultivation Technologies’ interim medical cannabis extraction facility currently operating in Coachella, California starting on October 1st.
We are favorable on this development for FinCanna and will keep an eye on how this company continues to execute. The arrangement provides FinCanna with a source of monthly revenue before the construction of CTI’s Coachella Campus is completed.
Already Producing and Selling Cannabis Oil
As reported in September, the interim medical cannabis extraction facility was established on the Coachella premises in accordance with CTI’s Conditional Use Permit. The lab has already started to produce medical extracts for sale, and is expected to remain in operation during the construction of the medical cannabis campus planned on the six-acre site.
The profit sharing was established in exchange for the extension of certain dates and other amendments to FinCanna’s agreement with CTI. FinCanna has agreed to reinvest part of its profit sharing in CTI as a secured loan, subject to certain limitations.
Under the initial agreement with CTI, FinCanna agreed to provide funding for a portion of the costs to construct a fully-entitled, indoor medical cannabis facility on the campus. The funding is in the form of a loan, along with the right to purchase a royalty to be paid to FinCanna, subject to certain terms and conditions. The state-of-the-art facility is expected to support cultivation, extraction, manufacturing, testing and distribution.
A California Cannabis Opportunity
Source: 420 Intel – United States