Licensed Producer. Natura currently has a cultivation license that was issued September 2017 and our readers know that the average timespan between the cultivation license and the sales license is typically in and around 13 months. What does this proposed deal mean to EMC, its patients, its future customers, and to investors? AND … if the acquisition does not go through does the July 18th supply agreement remain in effect?
Yes, regardless of the outcome of the acquisition, the supply agreement will remain intact. In fact, there would likely be a greater supply agreement opportunity if the deal didn’t transpire. However, with this deal there is a motivated seller and a motivated buyer, and we’re confident about a positive outcome.
So, what does this mean for Emblem? This transaction allows Emblem the opportunity to aggressively pursue our growth strategy by bringing immediate capacity expansion online. Natura’s phase one retrofit and conversion, scheduled for completion in September, adds up to 15,000 kg to Emblem’s capacity in 2018. With completion of phase two of Natura’s conversion, we expected to bring total cannabis production capacity of up to 70,000 kg per year by the end of 2019.
The Natura acquisition also enables Emblem to get a much greater bang for our buck (our cash!). The cash component of this transaction is $25 million, and we expect the full completion of the retrofit to cost approximately $30 million, for a total of $55 million for an added 70,000 kg. Compare this with the estimate of $45-55 million to build a greenhouse that would produce only 15,000 kg.
Finally, this huge increase in capacity allows us to aggressively pursue listing across all Canadian provinces and focus on additional opportunities for international expansion, such as our recent JV with Acnos Pharma.
Well I should have warned earlier that there are no easy fluff questions from me. Let’s move back for a moment to your corporate presentation and page 4 specifically. Readers, you do not need to have the deck open as this page is titled “Focussed on Growing
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