The Green Organic Dutchman Signs Sale Agreement and Leaseback for its Quebec Facility

Published: June 11, 2021

The Green Organic Dutchman Signs Sale Agreement and Leaseback for its Quebec Facility

The Green Organic Dutchman Holdings Ltd., a producer of premium certified organically grown cannabis, is pleased to announce that its wholly owned Quebec subsidiary Medican Organic Inc. has entered into a binding agreement of purchase and sale (the “APS”) with Cannara Biotech Inc. (the “Purchaser”) for the sale of the majority of its assets in Valleyfield, Quebec (the “Quebec Facility”), including all industrial and agricultural land, main hybrid greenhouse, rooftop greenhouse, all support buildings and certain related equipment.

The processing and manufacturing equipment currently utilized by Medican for the production of its cannabis 2.0 portfolio in the Quebec Facility is not subject to the APS.  Pursuant to the APS, the Purchaser will have deposited the full $27 million (the “Purchase Price”) into escrow prior to the close of the sale which is scheduled to close on or before June 22, 2021 (the “Closing”).  As agreed between the parties in the APS, Medican will enter on Closing into a lease with the Purchaser, for approximately 80,000 square feet of cultivation and processing space in the Quebec Facility.

Management Commentary:

“This is a major transition point for the Company, as we continue to execute our plans, allowing us to significantly reduce our debt while right-sizing our operations in Quebec without disruption,” commented Sean Bovingdon, TGOD’s CEO and Interim CFO. “Furthermore, we are pleased to be in position to provide for potential future growth in cultivation in Quebec through the leaseback of an appropriate portion of the Quebec Facility. Our portfolio of products is receiving positive reviews across the country and we look forward to providing Quebec with locally grown products, as demand continues to increase. Our balance sheet is being strengthened through the sale of excess assets and the elimination of term debt, and we expect annualized net cashflow savings of approximately $4 million in interest and overhead costs. This sets the foundation for the Company to take advantage of other growth opportunities in Canada and the United States,” added Bovingdon.

Transaction details:

  • Gross Purchase Price of $27 million, paid on Closing in cash from funds deposited into escrow by the Purchaser.
  • Additional $5.7 million deposit to be refunded to Medican upon completion of the transfer to the Purchaser of a utility pricing agreement with Hydro Quebec, to occur concurrently with Closing.
  • Medican will be provided with an initial two-year lease for 80,000 square feet, representing cultivation, processing and manufacturing spaces in the Quebec Facility, at an annual rate of $12.50 per square foot.
  • In addition, Medican will enter into a three-year lease and cannabis supply agreement with the Purchaser, commencing after the initial two-year lease, for approximately 80,000 square feet of the Quebec Facility, whereby Medican will pay $8.75 per square foot per year for the processing and manufacturing space only and will pay the Purchaser a net amount based on the wholesale value of bulk dried cannabis that Medican produces from the growing premises in lieu of rent for that space. This will be a net amount based on bulk wholesale market prices at that time less all costs of cultivation and costs to process to point of sale of bulk dried cannabis. Medican will maintain ownership of its organic cannabis produced for sale into the retail markets.
  • Concurrent with Closing, TGOD will pay approximately $31.8 million to its senior lender in full and complete settlement of all its obligations to such lender.
  • The APS closing is subject to usual and customary conditions for such transactions.
  • BMO Capital Markets acted as exclusive representative and financial advisor in connection with the transaction, and Langlois Lawyers LLP acted as TGOD’s legal counsel.

About The Green Organic Dutchman Holdings Ltd.
The Green Organic Dutchman Holdings Ltd. is a premium certified organically grown cannabis company focused on the health and wellness market.  Its organic cannabis is cultivated in living soil, as nature intended.  The Company is committed to cultivating a better tomorrow by producing its products responsibly, with less waste and impact on the environment. Its Canadian facilities have been built to LEED certification standards and its products are sold in recyclable packaging.  For more information on The Green Organic Dutchman Holdings Ltd., please visit

Recent News

View All News Items

Latest Article

High Spirits and Higher Sales: Cannabis Seen as a Staple During the Holidays

High Spirits and Higher Sales: Cannabis Seen as a Staple During the Holidays

As the holiday season approaches, consumers across Canada are gearing up for festivities and gift-giving. While traditional retail industries have long capitalized on holiday consumer spending habits, the cannabis market is quickly establishing itself as a key player in this annual economic surge.

Read Article