Acreage Holdings announced the closing of a series of sale-and-leaseback transactions for the sale of certain properties and facilities from Acreage Holdings to GreenAcreage.
NEW YORK, Oct. 25, 2019 (GLOBE NEWSWIRE) — Acreage Holdings, Inc. ("Acreage Holdings" or "Acreage") (CSE: ACRG.U) (OTCQX: ACRGF) (FSE: 0VZ) and GreenAcreage Real Estate Corp. ("GreenAcreage"), an independent real estate investment trust, today announced the closing of a series of sale-and-leaseback transactions for the sale of certain properties and facilities from Acreage Holdings to GreenAcreage for an aggregate of approximately $18 million to Acreage Holdings and approximately $23 million overall including payments to a third-party seller.
The locations funded and closed today include facilities in Massachusetts, Florida and Pennsylvania. Acreage Holdings and GreenAcreage expect to close on additional facilities in Illinois and Connecticut within the next thirty days.
Acreage Holdings is expected to undertake significant expansion at the properties sold and additional properties to be closed upon. GreenAcreage has committed to provide up to approximately $43.9 million in additional financing in commitments or funding related to properties in Florida and Illinois.
Assuming full utilization of this expansion financing, GreenAcreage's total investment in the properties will be approximately $77.3 million, with $72.3 million specifically allocated to Acreage Holdings. Concurrent with the closings, Acreage Holdings entered into long-term, triple-net lease agreements with GreenAcreage and will continue to operate the properties as licensed cannabis facilities.
Entities GreenAcreage Acreage Holdings Funded & Closed Transactions With Acreage $18.3 million $18.3 million Funded & Closed Transaction With Third Party Seller $5.0 million $ 0 Closing Shortly – Within 30 Days $10.1 million $10.1 million Construction Commitments $43.9 million $43.9 million Total: $77.3 million $72.3 million
Acreage Holdings took a long, hard look at our portfolio of real estate holdings and made a strategic decision to rationalize our business strategy.Glen Leibowitz, Chief Financial Officer of Acreage Holdings
"We are in the business of bringing to market the best cannabis products possible and making them accessible to as wide an audience of patients and adult-use consumers as is viable. Acreage Holdings never intended to be a real estate company, and as the cannabis industry is a capital intensive business, tying up capital that can be deployed elsewhere is not in our shareholders' best interest. By working closely with GreenAcreage, we will be able to focus on our core competencies, growing the plant, processing it into consumer/medical products and building out a network of retail locations across the country," said Glen Leibowitz, Chief Financial Officer of Acreage Holdings. "The proceeds generated from our relationship with GreenAcreage will be utilized to create long-term shareholder value through the buildout of our existing footprint or in our acquisition efforts to further expand our footprint. This is just one tool in our box we are utilizing to access efficient capital, with an eye toward building a leading U.S. cannabis operation."
Our objective is to help companies in the medical and recreational cannabis industry expand their businesses. Katie Barthmaier, Chief Executive Officer of GreenAcreage.
Barthmaier went on to say that "by providing sale-leaseback and build-to-suit transactions to the regulated cannabis industry, GreenAcreage allows companies to release the capital they have tied up in their fixed assets and redeploy it into their core businesses. We are excited to close this transaction with Acreage Holdings and support their continued growth, while building a diversified portfolio of industrial and retail cannabis real estate."
Disclaimer: Past performance is not an indicator of future performance.
Disclaimer: past performance is not an indicator of future performance
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