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Financing U.S. Cannabis Operations from Coast-to-Coast

Jon Brown Jon Brown, Stockhouse
0 Comments| November 21, 2018

A unique royalty Company focused on the cannabis sector has grown its portfolio after signing a substantial partnership.

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Tidal Royalty Corp. (CSE: RLTY.U, Forum) recently announced that it has signed a non-binding memorandum of understanding for a strategic royalty financing partnership with California’s longest-running cannabis operator, FLRish, Inc., the parent company of the iconic Harborside dispensaries in California. The Company is also moving ahead with the series B equity financing of Harborside .

Harborside is a vertically-integrated licensed operator in California, founded in 2006 by industry activist and entrepreneur Steve DeAngelo, with more than $300 million (USD) in products sold since opening its doors. Through its two dispensaries, Harborside has served countless patients and accumulated a deep insight into the state’s cannabis market. In addition to its dispensaries, it also runs one of California’s largest cultivation facilities. Its flagship location in Oakland is the largest medical cannabis dispensary in the United States and boasts many “firsts” in the country’s cannabis history:

  • The first medical cannabis dispensary in the U.S. to introduce lab testing
  • The first to offer CBD-rich medicine
  • The first to treat children with Dravet Syndrome

Following California’s legalization of adult-use sales on January 1st, 2018, it was also reported that Harborside was the first dispensary to legally sell non-medicinal cannabis in the state. Since then, the $3.4 billion industry is projected to grow at a 27% CAGR over the next three years. Given Harborside’s deep involvement in California’s cannabis industry, it is well-positioned to capitalize on a major share of this surging market and its strategy is to do just that; expand its retail footprint across the state by leveraging its brand, including its growing operations and launching new branded products and product lines.

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(Image via Tidal Royalty.)

Under the deal, Tidal Royalty has committed to provide up to $10 million (USD) in royalty financing to prospective dispensary operators who license the Harborside brand. Tidal Royalty has also purchased $3,000,000 (CAD) of senior unsecured convertible debenture units, which pay 12% interest and are convertible into Harborside common shares.

Tidal Royalty’s CEO and Chairman Paul Rosen hailed Harborside as one of the U.S.’ preeminent cannabis companies. “They are a leading operator in California already, and we expect that their business strategy and strong executive team will enable them to enhance their leadership position. Through our strategic financing partnership, Tidal Royalty would provide select operators with the capital required to launch a dispensary licensing the “Harborside” brand in exchange for a royalty on sales.”

For more information on this, click here.

With this transaction, the Company continues to grow its portfolio of licensed cannabis operators across numerous states. Following its recent announcement on leading a private placement of $5 million (USD) and signing a financing agreement with Lighthouse Strategies, LLC., a research & technology and portfolio management company. In September 2018, Tidal Royalty also announced an agreement to finance licensed operator Diem Cannabis’ expansion into Massachusettsfor $12.5 million over three years. The state has been predicted by Marijuana Business Daily to be “the most prosperous in the nation”.

Earlier in the summer, Tidal Royalty had extended its reach in the cannabis business in Arizona and Florida with its intent to purchase equity in, and assume a royalty agreement with, vertically-integrated license holder AltMed. The Company has also set its sights on potential financing targets in California, New York, Illinois, Ohio, Pennsylvania, Texas and Michigan.

FULL DISCLOSURE: Tidal Royalty Corp. is a paid client of Stockhouse Publishing.

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