Harborside Inc (CSE: HBOR) has closed on the purchase of its production campus. Referred to informally as the Salinas Farm, the company acquired the property in a transaction pegged at $10.84 million.
The transaction sees Harborside acquire the 47 acre production campus, which features 200,000 square feet of licensed cultivation space. The facility contains a total of 155,000 square feet of flower canopy space as well as 45,000 square feet of nursery space. The company is currently in the process of upgrading a 45,000 square foot greenhouse on the property as well.
Upgrades conducted at the property are slated to be completed in the second quarter of 2021, with upgrades largely consisting of blackout curtains, LED grow lights and new flooring. Once completed, the modifications are expected to increase wholesale revenue capacity by 10%, while total production is expected to increase 7%. The cost of the upgrade meanwhile is expected to be recouped within twelve months.
“With a soon to be expanded ecosystem of Harborside brands, including our recently announced acquisition of Sublime and their award-winning Fuzzies branded pre-rolls, this transaction will enable us to further expand our operations in Salinas to keep up with increasing consumer demand. In addition, with our newly lowered cost of capital, we will improve cash flow and decrease our overall costs of production from the facility, driving long term margin expansion.”
Peter Bilodeau, Interim CEO of Harborside
Funding for the purchase of the Salinas production campus was provided via the firms existing credit facility.
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Harborside last traded at $2.30 on the CSE.
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