Grown Rogue International Inc. (CSE:GRIN) (OTC:GRUSF) has increased ownership in its Michigan operations from 52.2% to 80% via two transactions valued at $2.8 million.
The purchase price included $200,000 paid in cash and $2.6 million paid by way of four-year sellers' notes, the company said on Thursday.
Grown Rogue boosted its ownership in Golden Harvests, LLC, the entity that controls its Michigan operations, operating out of an 80,000 sq ft facility containing roughly 15,000 sq ft of flowering bench space.
Other Deal Details
- Canopy Management, LLC holds a 60% interest in Golden Harvests and Canopy is 87% indirectly owned by Grown Rogue.
- Under the deal, the company bought the total remaining minority interest in Canopy for $800,000, which includes a 20% down payment in cash and monthly payments for four years with an interest rate of 5.2% per annum.
- Grown Rogue purchased 20% of the minority interest in Golden Harvests for $2 million, which includes minimum quarterly payments in cash for four years.
- The transaction provides for a valuation of Golden Harvests at $10 million.
- All payments owing to the sellers are expected to be completed with cash on hand and cash generated from operations.
- The company retains the option to acquire the remaining 20% of Golden Harvests at a fair market valuation.
- The minority interest in Golden Harvests is owned by Dave Pleitner, an insider of the company, and 8% of the interest in Canopy is owned by certain directors of the company.
"Michigan is such an important asset to our Company because it was the first market we proved we could migrate our operational excellence from Oregon to additional markets," said Obie Strickler, CEO of Grown Rogue. "Michigan has been a tremendous market for us, and we are thrilled to own a larger piece of this strong business. Michigan still has approximately 25,000 sq ft of facility that can be built out and we are in discussions to expand and optimize the additional capacity."
GRUSF Price Action
Grown Rogue's shares traded 0.15% lower at $0.651 per share at the time of writing on Thursday morning.
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