Captor Capital Corp., a vertically integrated cannabis-focused investment company, is pleased to announce that a wholly owned subsidiary of the Company has entered into a Letter of Intent (“LOI”) to acquire 100 per cent ownership of a Type 7 Volatile Solvent Extraction facility based in California from People’s Holdings, one of the largest manufacturers of THC concentrates in the state.
In operation since January 2019 and holding an annual license for volatile manufacturing from the Bureau of Cannabis Control of California, the facility has experienced rapid revenue growth and is currently on a run rate track of $15mm in revenue for 2019. At maximum operating capacity, the facility could generate north of $45mm USD in annual revenues at current pricing.
The facility is 4,000 square feet with trim supplier and distribution agreements in place producing AA-AAA quality THC distillate oil with a 90-95% cat3 pass rate.
The terms of the LOI provide for Captor to acquire full interest of the issued and outstanding units of the manufacturing lab from People’s Holdings LLC. In addition, the LOI provides for People’s Holdings to continue to manage the manufacturing plant for a period of 12 months on behalf of Captor. The parties are working towards completion of definitive legal agreements. Completion of the acquisition is pending regulatory approval for local and state licenses and permits, agreement of a comprehensive management contract, agreeing a new lease or obtaining consent of the landlord, and completion of facility renovations (if any). Captor has agreed to pay an exclusivity fee of US$75,000 for 75 days of exclusivity whilst the Company conducts its due diligence process and negotiates the terms of the management contract and lease agreement.