Sunniva Inc SNNVF

RE:RE:Ted Ohashi interview with Sunniva

[JMark80]

Sunniva4Life wrote:

LTB: In California, you are setting up this system with eight tenants. I think what people really want to know is how this system compares with the case in which you are able to operate the entire facility for yourself.

SNN: California started off with the idea they would protect the small operators for five years. So they set up some five year restrictions, on the size limit on growing space of 22,000 square feet, for example. We have set up eight of these within our facility and we own one ourselves and have leased seven to others, of which we are allowed to own 19.9%. Each room has an individual address, its own license, its own power supply and so on. This is the regulatory requirement. What we have done is make “convenience arrangements” to use their licenses in our facility. We identified the individuals, did the paperwork, we provide all the services and buy the product when it is grown. We start with a propagated plant they grow for us and we buy back a fully grown plant. The financial impact on us is immaterial. We consider the complex, transactional flows we have set up to be a trade secret but when we received our temporary state licenses, it validated the business plan we developed. When we get to the smaller 10,000 square foot licenses in Phase II, we can own all of those. So there is no restriction.

Like I said, they own 30% of phase 1 production and are an intermediary on the other 70%. Wonder why that wasn't in their presentation.