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Cannabis Operator Prepares for Liftoff

Omri Wallach Omri Wallach, Stockhouse
2 Comments| August 12, 2019


cityview-logo.jpgEnterprising new companies in the Canadian cannabis market need to know the best way to kick-off their business. For those that were on the sidelines as the industry matured over the last few years, the initial frenzy of activity has allowed them to understand what methods and assets are the most vital to success.

Now, almost a year has passed since the federal government legalized recreational cannabis and it’s clear that rushing into the market came wasn’t rewarding for everyone. Early excitement for legalization was quickly dampened as limitations put in place by the federal and provincial governments became clear. Provinces went months without opening their first cannabis stores, and many producers stockpiled ahead of legalization but couldn’t bring their product to market.

Patiently avoiding the initial headaches of the cannabis industry let new entrants focus on what worked, and that’s exactly what City View Green Holdings Inc. (C.CVGRLRZZFForum) is doing. The Ontario-based cannabis company carefully evaluated the market to see how it could most effectively position itself. The answer? A vertically integrated structure focused on seed to retail.

When you plan carefully like City View Green did, you can start acting quickly. On July 27, the Company completed a sale and leaseback transaction of its Brantford, Ontario facility with an arms-length financier that will help finalize the buildout of the property. Once the facility is completed and fully licensed, it will be able to incorporate growing, extraction, production, and retail, all in one location.

cityview-facility2.jpg
(Image via City View Green. Click image to enlarge)

Ian MacDonald, City View Green’s CEO, commented on how the deal benefits the Company’s operation:

“City View Green is pleased to close this transaction which provides non-dilutive financing to complete the buildout of our facility located at 49 Easton Road, Brantford Ontario. This transaction will enable City View Green to complete the construction at the facility and obtain the applicable Health Canada Cannabis licensing to enter into full operations.”

Instead of playing a long-game and choosing a less-optimal financing strategy, City View Green opted to take full advantage of its existing real estate asset. As part of the transaction, the new landlord will finance all of the required buildout and capital improvements required by the Company for their Health Canada Licenses. The lease also comes with right of first refusal to purchase the property back if the owner decides to sell.

If you’re familiar with City View Green, you know that it is already well-positioned in the market for a relatively new company. Stockhouse previously detailed the four pillars of the Company’s structure, from the cultivation prowess of master grower Mario Meek and his experience founding major LP Weed MD (V.WMD), to its ambitious retail arm through a 19.9% stake in retailer Budd Hutt Inc.

What helped the Company come together quickly was a crystal-clear vision that was forward looking from the onset. Everything from the fully integrated business model to the opportunities for partnerships and expansion was handled deliberately, and with an eye on building a solid business.

That includes assembling a management team with the right talents, including CEO Ian MacDonald. The 30-year alcohol beverage industry veteran joined City View Green relatively recently on March 18, but has been able to quickly leverage his experience in managing award-winning organizations.

And while the work on City View Green’s Brantford facility continues to ramp up, the retail side of the business has already gotten rolling. On June 13, Budd Hutt announced the acquisition of eight cannabis store locations in Alberta pending approval from the Alberta Gaming, Liquor and Cannabis Commission, with half of the locations already built-out.

cityview-buddhutt2.jpg
(Image via City View Green. Click image to enlarge)

One of the other four locations that Budd Hutt is building is slated to become its flagship location and a blueprint for its national retail expansion plan. Given that the AGLC recently lifted its moratorium on issuing licenses, securing final approval for the stores is expected before the year’s end,  and City View Green’s smart investment in the retail brand ensures that the Company’s products will have a comfortable road to the market.

If you take your time to accurately assess an industry before diving in, all of the pieces fall into place at the perfect time. City View Green’s entry into the cannabis space is looking no different. Provincial cannabis markets are continuing to open up, products like edibles and vape pens will soon be legalized, and investors in the space continue to look for smart, well-planned businesses. Without a doubt, City View Green is on track to capitalize on all three.
 
   
 
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.




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Comments

Riccjer34
Learning how to trade can lead you into a good life like what I have now. Using the Emini S&P Trading Secret for trading is really great, moving in South East Asia and live a life that you never dreamed of and the best thing is it taught me to live life stress free and fearless.
(0)
August 14, 2019

KPOIndustries
Interesting, BuddHutt stores won't even appear until 2020, at the earliest. No update on the progression of the facility, further dilution, and more expense. Sounds like a successful plan. Where are the progression updates on the facility? Share price is nearing severe sub 0.10 levels. Not looking good for this company. Very unimpressed with the progress, or lack-there-of.
(49)
August 13, 2019

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