Binding agreement of $2 million for real estate and associated licenses
Vancouver, British Columbia–(Newsfile Corp. – January 19, 2022) – C21 Investments Inc. (CSE: CXXI) (OTCQX: CXXIF) (“C21” or the “Company”), a vertically integrated cannabis company, today announces the divestment of a number of non-core assets in Oregon. All currency is in U.S. dollars unless otherwise noted.
C21 has signed a binding agreement for the sale of select assets, including its real property located in Southern Oregon and associated outdoor production licenses and equipment, for $2.0 million. This property was acquired by the Company for $1.3 million, paid in C21 shares at a deemed price of C$0.804 (see news release dated February 19, 2020).
CEO and President, Sonny Newman – “The decision to divest of a number of non-core assets in Oregon is consistent with our strategy of focusing our operations in limited-licensed states. This move will strengthen C21’s margins and bottom line, with minimal impact on revenues. Given the increased flower output we have seen from expanding our cultivation facility in Nevada, future growth should more than compensate for any possible reduction in Oregon sales and, more importantly, at significantly better margins.”
C21 has received a $100,000 cash down payment with an additional $400,000 to be paid upon the buyer’s receipt of the Oregon Liquor and Cannabis Commission’s approval of the license transfer and closing. The Company will receive interest-only monthly installments starting in July 2022 at an annual interest rate of 8%, including annual principal payments of $100,000, on a $1.5 million secured promissory note maturing on the fifth anniversary of the agreement.
The Company is working to finalize the sale of its Tier II indoor cultivation license and real property in Clackamas County, Oregon, currently under third-party operation.
C21’s remaining Oregon assets, including its inventory and licenses, have been consolidated into its Central Oregon operations, which consist of a Tier I indoor cultivation facility, a processing facility, and a wholesale distribution facility. The Company retains the Phantom Farms, Hood Oil, and Eco Firma Farms brands.