Industrial land sold again in OK Falls
A downturn in the cannabis production industry has once again stalled development on an industrial property in Okanagan Falls that has been eyed for a massive greenhouse capable of growing more than 100 tons of bud each year.
Sunniva Inc. announced this week it has a deal in place to sell the 114-acre former Weyerhaeuser mill site to an “independent real estate investment fund” for $9 million. The sale closes July 15.
News of the sale came one year after Sunniva announced it was flipping the property, along with the assets on site and the subsidiary that owned the land, for $20 million to CannaPharmaRX.
However, the deal with CannaPharmaRX died last week, according to Sunniva, which announced the new suitor just three days later.
Company spokesman Rob Knowles declined Wednesday to provide any additional details about the deal, the buyer or its plans for the property. He said Sunniva originally purchased the land in 2018 for $7 million and made “some improvements” to it, such as ground works and some concrete foundations.
In a May 13 letter to shareholders, Calgary-based CannaPharmaRX, which describes itself as a “real estate investment company specialized in cannabis production,” said it was having trouble securing financing for the purchase.
The letter describes the Okanagan Falls “project” as a 760,000-square-foot glass house with an annual production capacity of 120,000 kilograms of cannabis.
Ron Obirek, who represents Okanagan Falls on the board of the Regional District of Okanagan-Similkameen, said he remains optimistic something will get eventually built there that will put a lot of people to work.
“I don’t know who the purchaser is, but what I think is it’s incredibly positive, good news, because somebody’s spending $9 million,” said Obirek, the director for Area D.
“That’s a lot of money, a lot of commitment. You don’t spend $9 million unless you know you can do something that can get you a benefit for that $9 million.”
Since the 2007 closure of Weyerhaeuser, the site has been the subject of multiple development proposals, ranging from an industrial park to residential development and now cannabis cultivation, none of which have materialized yet.
“We’re blessed in Okanagan Falls, not just with really great people, but we also have the odd reality of the largest inventory of undeveloped industrial land in the Okanagan Valley,” said Obirek.
“People are going to find this land and we’re going to get development, jobs, and it’s going to be good for the community.”
Sunniva, which is headed by Tony Holler, who also owns
Poplar Grove Winery in
Penticton, expects to net $5.2 million from the property sale after commissions and others expenses.
The company was named in a lawsuit earlier this year by Shuttleworth Properties, which claimed Sunniva had defaulted on its mortgage for the site.
The company’s shares slid 6% on Wednesday to $0.15 on the Canadian Securities Exchange, down from a 52-week high of $3.33 and an all-time high of $15.20 in January 2018.