Breaking News: TIDAL ROYALTY ANNOUNCES LETTER OF INTENT TO FINANCE CALIFORNIA EXPANSION AND EXTRACTION FACILITY

Tidal Royalty Corp. (CSE: RLTY.U) has entered into a letter of intent as of June 11, 2018, with an established licensed operator based in Monterey, Calif., to finance the expansion of the company’s operations in the state.

The Monterey Cannabis Company is led by a seasoned management team with experience across cultivation, extraction and retail distribution. The company currently operates on a 21-acre property located in Monterey county, California, consisting of approximately 240,000 square feet of commercial greenhouse space. The Monterey Cannabis Company’s products are distributed through a network of dispensaries under a retail brand partnership.

Pursuant to the LOI, Tidal Royalty will provide the Monterey Cannabis Company with up to $15-million (U.S.) to finance the expansion of the company’s cultivation capacity and to establish a new processing facility that will enable it to bring a broader range of products to market. In return, the Monterey Cannabis Company will pay Tidal Royalty 15 per cent of all net sales generated by the financed operations in California in perpetuity.

“We are very excited by this opportunity,” said Paul Rosen, chief executive officer and chairman of Tidal Royalty. “This group has the combination of operational ability and pragmatism around capital allocation that we find is an essential hallmark of a sustainable cannabis business. Their core competencies, which include combining low-cost premium cultivation with advanced processing and developing proven go-to-market strategies, makes us believe that they will be a strong player in the key state of California for years to come. We are very impressed with what this established group had accomplished to date, and we are even more excited about what they will be able to do with Tidal Royalty’s financial support.”

With a population of 40 million, the state of California has the potential for its adult-use marijuana market to be one of the largest in the world. California legalized adult-use cannabis on Jan. 1, 2018, and the market is expected to grow to $3-billion (U.S.) by the end of the year, according to Marijuana Business Daily.

The LOI includes an exclusivity period during which the Monterey Cannabis Company will not negotiate with any other party. It further provides Tidal Royalty with a right of first negotiation on any future financing with respect to the company or any of its affiliates. Closing of the transaction contemplated by the LOI is subject to, among other things, the satisfactory completion of Tidal Royalty’s diligence investigation, which is currently under way. Tidal Royalty expects to announce further particulars in respect to the contemplated transaction with the Monterey Cannabis Company upon the execution of a definitive agreement between the parties and the receipt of necessary regulatory approvals.

In addition to the LOI with the Monterey Cannabis Company, Tidal Royalty has entered into two additional letters of intent and is in the process of evaluating multiple opportunities across the United States. The company is currently engaged in advanced discussion with counterparties in California, Florida, Arizona, Ohio, Michigan, New York and Nevada. Tidal Royalty intends to provide further particulars on those discussions, as the parties get closer to reaching agreement on definitive terms.

Tidal Royalty has raised approximately $40-million to date by way of private placements, which it intends to use primarily for royalty financings and for general corporate purposes. The company was founded by experienced cannabis industry executives and provides expansion financing to licensed U.S. operators across multiple verticals, including cultivation, processing and manufacturing, dispensing, and ancillary services. Tidal Royalty directs interested stakeholders to visit its website to view the company’s corporate presentation for more details, and the Canadian Securities Exchange’s website to view the company’s listing statement.

 

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