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CCIM: Harvest One recently announced that it has closed its upsized debenture financing of approximately $20.125M, with plans on using the net proceeds for your production facility that is located in Chemainus, BC. Now according to your press release on November 20th, 2017, this will cost approximately $9M. Would this then suggest that Harvest One is not finished yet with expansion and/or announcements?
HVST: Yes, we estimate the build out cost of the initial Chemainus facility to be approximately $9m which is same estimate for the original Phase 1 planned for the Duncan expansion. We wanted to ensure we achieved the same capacity of approximately 8,000kg without any extra capital outlay. I would also like to point out that we already had the cash in the bank to support this expansion from our original financing earlier this year.
There will most likely be further expansion on this property and we are currently working on these plans but first we want to ensure we build out Phase 1 as soon as possible.
CCIM: What does the expansion plans at the Chemainus facility mean for your Duncan facility?
HVST: Down the road the Duncan facility may be repurposed for propagation to support the Chemainus facility and our outdoor growing plans, but for now there will be no change and will it continue to operate as our primary cultivation facility. Due to the close proximity of both facilities, there will most likely be some operational synergies which we are currently exploring.
CCIM: You last reported that the Lucky Lake facility is in the security clearance stage: has there been any update to this that you can share with readers?
HVST: We are now entering the final stages of licensing with Health Canada and we are currently in the process of submitting an updated application to Health Canada where we anticipate building out the facility this year. The facility itself is approximately 60,000 sq. ft. with a potential capacity of 12,000kg capacity per annum. Originally, this was applicant number 264 and considering Health Canada’s stance of expediting licenses to existing holders we anticipate the final process to move rather quickly.
CCIM: United Greeneries is described as a “state of the art production facility focused on the Canadian Medical Marijuana Industry”. Some LP’s have remained focused on the medical supply side, does this hold true for Harvest One?