A Toronto cannabis grower, with an operation near Kirkland Lake, has struck a supply and financing agreement with Canadian weed giant, Canopy Growth Corporation.
48North Cannabis Corp. announced Dec. 3 that it has entered into two agreements to supply the Smith Falls-headquartered producer with dried cannabis grown at its DelShen Therapeutics facility, just outside of Kirkland Lake.
48North is also receiving $3 million from Canopy in exchange for three per cent ownership of the company.
The total volume of the supply agreement is estimated to be a minimum of 1,200 kilograms and deliverable over the course of 12 months. The first 100-kilogram shipment will move from Kirkland Lake to Canopy Growth by Dec.5.
Under the supply deal, Canopy Growth and 48North will work together “on a non-binding but best-effort basis” to establish a national retail presence for its products in Tokyo Smoke and Tweed stores.
48North Cannabis is a grower focused on developing products for the women’s health and wellness market, specifically in the form of cosmetics, topicals, beverages and edibles.
The company is licensed to grow, sell and extract oil at its 40,000-square-foot indoor operation, a former government tree nursery outside Kirkland Lake.
Canopy Growth has operations in 12 countries with more than 4.3 million square feet of production capacity.
On the same day, 48North announced that its expansion to a second operation is complete with the closing of its acquisition of Brantford-based Good & Green, a licensed grower with 46,000-square-feet of indoor cultivation and production space in southwestern Ontario.
That provides 48North with an expected 2019 production haul of 45,000 kilograms of cannabis.
To help manage all this, Jeanette VanderMarel of Ancaster, co-founder of The Green Organic Dutchman, one of Canada’s largest licensed producer, is coming board as co-CEO of 48 North. She will sit on the board of directors.
On the financing side, on top of the $3 million from Canopy, 48North is cashing up with an additional $7 million from a U.S.-based private investment fund.
"The $3 million equity financing completes our $10 million private placement and will help us build out our next generation of cannabis products,” said 48North CEO Alison Gordon in a news release.
“The supply agreement provides significant near-term revenue, along with future retail distribution options for 48North's branded cannabis, cannabis-accessories and next-generation products."
Gordon said the addition of VanderMarel to the team brings a “deep knowledge” on the production and retail sides of the cannabis business.