Canopy Growth Corp. has signed a joint-venture deal with Les Serres Stephane Bertrand Inc., a large-scale tomato greenhouse operator in Quebec.
The joint venture will lease a greenhouse used for tomatoes and other vegetables from Bertrand that will be upgraded and retrofitted for cannabis production by April 2018.
Canopy (TSX:WEED) says an application for this site has been submitted and subject to Health Canada and other regulatory approvals it expects being ready to begin production by May 2018.
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The greenhouse holds an Ecocert “organic” certification.
Smiths Falls-based Canopy has agreed to issue Bertrand $2.75 million in shares in four equal tranches, based on certain milestones. To fund the development of the joint venture, Canopy’s Canopy Rivers subsidiary will also contribute $15 million in cash and Canopy has agreed to buy all of the cannabis produced during an initial term.
Canopy and its Canopy Rivers subsidiary will own a two-thirds stake in the joint venture, while Bertrand, which will operate the joint venture, will hold the remaining third.