GTEC Holdings (TSXV: GTEC) announced this morning that its 25% owned retail operation known as Cannabis Cowboy will be selling off assets to that of Fire & Flower Holdings Corp (TSX: FAF). The assets are all located within Alberta.
The sale, which consists of a number of undeveloped permits, will allow Cannabis Cowboy to repay its outstanding debt with GTEC Holdings whom is currently in a cash crunch. In total, eight undeveloped permits will be sold off to Fire and Flower for a total sum of $5.65 million, of which $4.52 million will be paid in cash while the remaining sum will be via shares.
Including within the sale are permits to develop retail operations at the following locations.
- #1114 – 1108 4th Street SW, Calgary, Alberta;
- #112 and #116 Sage Hill Valley Common NW, Calgary, Alberta;
- #212, 11245 Valley Ridge Drive NW, Calgary, Alberta;
- #120, 6802 50 Avenue, Red Deer, Alberta;
- #201, 191 Edwards Way NW, Airdrie, Alberta;
- #401 and #403, 235 Milligan Drive, Okotoks, Alberta;
- #3, 40 Hewlett Park Landing, Sylvan Lake, Alberta; and
- #6, 5221 46 Street, Olds, Alberta.
The locations are at various stages of completion, with two being fully built and a third that requires minimal construction to see completion. Fire and Flower intends to complete construction and licensing at all locations as necessary to obtain final retail sale permits from the provincial government.
Following the completion of the sale of eight development permits, Cannabis Cowboy will retain 16 development permit locations throughout Alberta. Additionally, Cannabis Cowboy is to immediately repay the debt owed to GTEC Holdings upon receipt of funds. As of May 31, that debt was pegged at $3.7 million, however the latest news release states the figure of $4.0 million.
The news release also added that GTEC Holdings is currently focused on divesting of all non-core and non-operational assets as it moves to strengthen its balance sheet. The firm currently has several outstanding debts and a tight cash position that are currently restricting its ability to grow. Instead, the firm intends to focus on cultivating and extracting premium cannabis products.
The transaction is expected to close by October 1, 2019.
GTEC Holdings closed at $0.34 yesterday on the TSX Venture Exchange.
Information for this briefing was found via Sedar, Fire & Flower Holdings and GTEC Holdings. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
