A B.C. company that raises seedlings for greenhouse vegetable growers is set to devote its existing square footage to weed, following a takeover by a B.C. cannabis grower and processor.
Langley-based, publicly-traded Bevo Agro on Thursday announced a reverse takeover deal with Surrey-based, privately-held cannabis firm Sun Pharm Investments, which will see Sun Pharm shareholders get an 86 per cent stake in Bevo through a one-to-one share swap. Current Bevo shareholders will keep the remaining 14 per cent.
Bevo will then distribute its interest in subsidiary CubicFarm Systems, a Milner, B.C.-based ag tech and vertical farming systems manufacturer, to Bevo shareholders on a one-to-one share swap basis.
Bevo itself will then change its name to Zenabis Global Inc., taking the name of one of Sun Pharm’s cannabis brands.
Sun Pharm today has two licensed indoor production facilities in British Columbia and New Brunswick and expects to open a third soon in Nova Scotia. The three sites, combined, cover 660,000 square feet of pharmaceutical-grade cannabis production space.
Once the Zenabis deal closes, Bevo’s greenhouses at Langley are to be expanded and retrofitted, providing Zenabis with 2.8 million square feet of greenhouse space.
Bevo, in business since 1989, grows vegetable plants such as tomatoes, peppers, lettuce, and cucumbers, along with bedding plants, flowers, trees, berries and grasses for sale to greenhouse growers, farms and nurseries across North America.
To meet its commitments to its existing propagation customers, Bevo said Thursday it has also signed a separate purchase agreement with an “arm’s-length third party” to buy 10.4 acres of greenhouse operations on 50 acres of land at nearby Aldergrove. The company expects to close that deal before the end of the year.
“This transaction represents a positive growth opportunity for Bevo Agro, as Zenabis intends to invest up to $100 million to expand our greenhouse facility to provide state-of-the-art cannabis production capacity, while maintaining our existing propagation and floral business,” Bevo vice-president Leo Benne, who will be Zenabis’ chief growing officer, said in a release.
“Our primary goal with this merger is to expand Zenabis’ capacity to supply high-quality cannabis for worldwide distribution,” Rick Brar, Zenabis’ CEO, said in the same release. “We will achieve this by taking advantage of Bevo’s greenhouse growing expertise to cultivate high-quality cannabis.”
Sun Pharm said it has secured committed or funded financing of around $57 million to support the deal.
The Zenabis deal won’t be the first to bring existing Canadian hothouse space into the cannabis business.
Vancouver produce firm Village Farms in 2017 set up a 50/50 joint venture with Victoria medical cannabis producer/processor Emerald Health Therapeutics to grow cannabis for medical and “non-therapeutic” use, pending the legalization of recreational marijuana use later this month. — Glacier FarmMedia NetworkTagged Bevo Agro, cannabis, CubicFarm, greenhouse, indoor production, marijuana, propagation, reverse takeover, Sun Pharm, Zenabis