Armed with $30 million in fresh capital earmarked for cannabis investments in the Golden State, Ottawa’s CannaRoyalty says it’s purchased a manufacturing and distribution facility north of San Francisco.
In late June, CannaRoyalty (CSE: CRZ) (OTCQX: CNNRF) – which provides opportunities for investors seeking legal exposure to North American cannabis markets – announced the private placement as it sought additional capital to expand its footprint in California.
The Ottawa-based company has invested heavily in California, the world’s largest legal cannabis market, acquiring pot producers and a firm that manufactures accessories such as vaporizer pens on the strength of a $15-million financing round that it secured earlier this year.
In the days following the closing of the latest round of funding, CannaRoyalty closed its previously announced purchase of FloraCal Farms, a profitable premium pot producer that generated US$6.4 million in revenue in the last fiscal year.
On Friday, CannaRoyalty also announced that it was spending US$2.4 million to purchase a licensed distribution and manufacturing facility to improve its California channels.
The push comes at a key time in California’s cannabis market. CannaRoyalty says the state left a “grey” zone on July 1 by mandating retailers cease carrying non-compliant cannabis products.
“We anticipate this may lead to short-term supply disruption, further increasing the value of compliant brand players like FloraCal, to our network,” Afzal Hasan, CannaRoyalty president and general counsel, said in a statement.