Deal paves way for world’s largest indoor grow op
COBOURG - The company that owns Cobourg’s former Kraft plant has signed a financing agreement with a Vancouver-based company to convert it into the largest indoor cannabis cultivation and processing facility in the world.
According to Cannabis Wheaton Income Corp. (Wheaton), the company has entered into a letter of intent with FV Pharma Inc. (FV Pharma), a licensed producer pursuant that received its cultivation license on Oct. 13 of this year.
Under the terms of the agreement, the company will develop all aspects of FV Pharma’s marijuana cultivation facility in mutually agreed staged phases.
On Oct. 13, Thomas Fairfull, the founder and CEO of FV Pharma, announced that he secured a licence from Health Canada to legally grow medical marijuana at the plant, located at 520 William St. in Cobourg.
“We removed all the conditions on our lucky day, Friday the 13th, and our closing date for the purchase is approximately Dec. 14,” he said at the time, confirming that before the year ends, his company will own the entire property.
Formerly called the Cobourg Innovation Centre, the facility includes a 620,000-square-foot plant that sits on a 15-acre property.
Wheaton said the facility rests on 70 acres of land, 32 of which have been utilized for the current building, with the remaining 38 acres available for the staged-phased facility development.
Upon completion, FV Pharma expects to achieve a total of approximately 3.8 million sq. ft dedicated to cannabis cultivation and related ancillary businesses, all under one roof — making it the largest indoor cannabis cultivation facility in the world.
The facility has an electrical substation on site, as well as natural gas lines, multiple water intakes, rail lines directly into the facility and 26 loading docks, providing the robust infrastructure necessary to accommodate the company’s expansion plans.
Wheaton and FV Pharma plan to utilize the facility to supply Canada’s current medical and future recreational market for marijuana, with a vision to offer mass quantities of dried product, oils, and when legally permitted, food-grade edibles — all subject to FV Pharma receiving the necessary licenses.
According to their website, Wheaton is a collective of entrepreneurs with a passion for the marijuana industry’s past, present and future.
Their mandate is to facilitate growth for their partners by providing them with financial support and sharing their collective industry experience.
Under the agreement, Wheaton will receive a 49.9 per cent stream of all cannabis or cannabis-derived products — including any immature cannabis plants and any cannabis trim — produced in Cobourg, in perpetuity.
This will translate to an estimated allocation of 200 million grams of cannabis going to the Vancouver-based company per year, upon completion of all phases of the development.
In exchange for the allocation, the company said it will use its unique expertise and the experience of its management team to assist FV Pharma with all aspects of the design, development, financing, build-out and operations of the former Kraft plant, including marketing, branding and distribution of the cannabis and cannabis-derived products generated in Cobourg.
Wheaton will also have one company nominee appointed to sit on the board of directors at FV Pharma.
“This marks a very exciting moment for Cannabis Wheaton,” Chuck Rifici, chairman and CEO of Cannabis Wheaton Income Corp., said in a press release. “The joint venture with FV Pharma provides us access to one of the most unique and the largest indoor cannabis facilities on the planet.”
According to Rifici, the Kraft facility project is highly reminiscent of his early days at Tweed (now called Canopy Growth), where he said he had the privilege of converting that company’s first major production asset — the former Hershey chocolate factory in Smiths Falls, Ont. — into something new and exciting.
“This is the same scenario, but on a much larger scale and in perhaps the most ideal location in Canada, in proximity to the largest addressable market in the country,” he added.
Fairfull said his company is delighted to partner with Cannabis Wheaton to develop their cultivation operations in their world-class facility.
“There are very few people in the industry that have the experience to convert a large-scale food grade facility into a cannabis cultivation facility,” he said.
The transaction remains subject to certain conditions and receipt of applicable regulatory approvals, including Health Canada approval and the execution of a definitive agreement, which the parties expect to occur within 45 days.