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Crop Infrastructure: An Investment in North American Cannabis -- CFN Media

May 16, 2018

SEATTLE, WA - ( NewMediaWire ) - May 16, 2018 - CFN Media Group (“CFN Media”), the leading agency and financial media network dedicated to the North American cannabis industry, announces publication of an article covering  Crop Infrastructure Corp.  (CSE:CROP) (CNSX: CROP ) (CROP.CN), a company that provides land, infrastructure, and equipment to individual operators to increase accessibility, efficiency, scalability, and sustainability. At the same time, the company’s investors benefit from recurring revenue from long-term lease agreements and management fees from tenant growers, making its structure similar to a real estate investment trust (REIT) in many ways.

The cannabis industry is projected to reach $50 billion by 2026, according to Cowen & Co., driven by the legalization of adult-use and medical cannabis across a growing number of states. Despite the significant growth rates, many cultivators and processors have struggled to raise capital to finance the variety of goods and services that they need due to federal regulations that prevent mainstream lending institutions from participating in the sector’s growth.

Turnkey Solutions for Cannabis

Crop Infrastructure specializes in providing turnkey greenhouse projects to licensed cannabis producers and processors. These projects consist of 12 greenhouse buildings that are each 3,640 sq. ft. With 1,350 plants per greenhouse, each project is capable of generating over 2,000 pounds per month or approximately $2.76 million in monthly wholesale revenue. These revenues expand by approximately 25% once factoring in the high-grade concentrates and edibles that are produced in a state-of-the-art extraction facility on site.

Management is initially focused on the Washington State market where there are 1,284 producers and processors and 436 retailers doing about $3.12 billion in annual sales, according to 502Data. After completing its first MEGA Greenhouse Project, the company will be well-positioned to expand this footprint across all legal jurisdictions across the United States and Canada. The tenant grower’s product is currently being sold in over 60 dispensaries in Washington State under various different brands.

In mid-March, the  company announced  that six of the 12 greenhouses are under construction at the first Washington project. Management intends to immediately lease these greenhouses to licensed tenant growers along with brand licensing. The company will then move on to the second phase of development for the second set of six greenhouses. Once completed the 12 greenhouses are projected to yield over 24,000 lbs per year, which is grown using $0.02/kw hour electricity, some of the lowest cost power in North America.

In early-May, the company also  agreed  to advance up to $2 million to Humboldt Holdings LLC for land and equipment purchased and the development of a 30,000 sq. ft. greenhouse project intended for lease and brand licensing by Humboldt to licensed cannabis tenant growers in exchange for a 30 percent interest in the company. The California-based property consists of a 10,000 sq. ft. existing cannabis greenhouse and existing building permits to expand.

Stable, Recurring Income for Investors

The cannabis industry may be rapidly growing from a top-line perspective, but it’s a difficult market for investors looking for bottom-line profitability. Many cultivators and retailers have been forced to raise equity capital and reinvest any revenue to expand, while those in the United States are still subject to significant political risk, particularly under the Trump administration. Investors have few “safe” options from both an asset and risk standpoint.

Crop Infrastructure aims to fill this void by purchasing real estate, building infrastructure, and leasing it to licensed cannabis producers and processors. In exchange, the company receives a 60 percent preferential payback via lease and management fees on greenhouse infrastructure and related equipment until its deployed capital is returned in full. Once that happens, the company applies an indefinite 30 percent land management fee that provides the company with an ongoing income stream.

Investors in the company’s stock benefit from stable, recurring income from lease and management fee agreements, as well as real estate assets that provide a solid core. The company benefits from the cannabis industry’s growth, but there’s little political risk since it’s solely involved in leasing real estate/infrastructure. By working with high-quality established tenant growers, the company aims to reduce any ancillary risk factors and ensure stable, long-term relationships.

Looking Ahead

Crop Infrastructure Corp. (CSE:CROP) represents a compelling investment opportunity in the North American cannabis industry. By taking a REIT-like approach, the company aims to capitalize on the growth of the cannabis industry without the uneven income and political risks. Investors may want to consider the company as an addition to their cannabis portfolio as it completes its initial Washington State project and sets its sights on additional North American opportunities, such as the new opportunity in California.

For more information, visit the  company’s website  or download their  investor presentation.

Please follow the link to read the full article:  http://www.cannabisfn.com/crop-infrastructure-investment-north-american-cannabis/

About CFN Media

CFN Media (CannabisFN) is the leading agency and financial media network dedicated to the global cannabis industry, helps companies operating in the space attract investors, capital, and publicity. Since 2013, private and public cannabis companies in the US and Canada have relied on CFN Media to grow and succeed.

Learn how to become a CFN Media client company, brand or entrepreneur:  http://www.cannabisfn.com/featuredcompany

Download the CFN Media iOS mobile app to access the world of cannabis from the palm of your hand:  https://itunes.apple.com/us/app/cannabisfn/id988009247?ls=1&mt=8

Or visit our homepage and enter your mobile number under the Apple App Store logo to receive a download link text on your iPhone:  http://www.cannabisfn.com

Disclaimer

CannabisFN.com is not an independent financial investment advisor or broker-dealer. You should always consult with your own independent legal, tax, and/or investment professionals before making any investment decisions. The information provided on  http://www.cannabisfn.com  (the ‘Site’) is either original financial news or paid advertisements drafted by our in-house team or provided by an affiliate. CannabisFN.com, a financial news media and marketing firm enters into media buys or service agreements with the companies that are the subject of the articles posted on the Site or other editorials for advertising such companies.  We are not an independent news media provider. We make no warranty or representation about the information including its completeness, accuracy, truthfulness or reliability and we disclaim, expressly and implicitly, all warranties of any kind, including whether the Information is complete, accurate, truthful, or reliable. As such, your use of the information is at your own risk. Nor do we undertake any obligation to update the items posted. CannabisFN.com received compensation for producing and presenting high quality and sophisticated content on CannabisFN.com along with financial and corporate news.  

The above article is sponsored content. Emerging Growth LLC, which owns CannabisFN.com and CFN Media, has been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation:  http://www.cannabisfn.com/legal-disclaimer/

Contact:Frank Lane206-369-7050flane@cannabisfn.com

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