focusing on sustainable low cost, high quality cannabinoid production and procurement for Pharmaceutical and consumer infused products
North Bud Farms Inc. Profile
Multinational cannabis company laying the foundation to aggressively pursue the greatest recreational markets on the planet.
Cannabis Production Facility in Salinas, California
Salinas greenhouse facility is currently operating 60,000 sq. ft. licensed canopy and contains ample room for expansion. The facility is also licensed for manufacturing and for distribution.
- To date, the Company has harvested approximately 400 lbs of various grades and strains of cannabis.
- As anticipated, the winter season yields were moderate with large flowers testing at approximately 19% THC.
- The Company has sold approximately 50% of the harvest in wholesale quantities.
- Company expects its next harvest in 60 days and is looking for an incremental increase in quality and yield.
The Company is pleased to announce it has received a California state processing licence in addition to the existing five cultivation, extraction and distribution licenses it acquired from the Qlora Group in 2019. This new licence will allow the Company to process, package and distribute cannabis and cannabis products acquired from other licensed producers in the state on a pay per use basis.
“Maximizing revenue streams in California where established and highly regulated retail and distribution models exist has required new entrants to operate within all verticals,” said Justin Braune, President, Bonfire Brands USA. “This strategy requires significant capital expenditures and has historically proven very difficult to execute. By leveraging our strategic infrastructure into agreements with established operators, Bonfire expects to increase revenue streams and achieve profitability quicker with lower capital expenditure risks.”
The company recently signed a letter of intent for a master lease and operations agreement with an experienced California-licensed operator to operate the cultivation facilities at the Company’s Salinas, California farm.
Terms of the LOI
As per the terms of the LOI, the companies will work together towards completing a definitive agreement before May 1, 2020, in which the Cultivator will lease the Company’s cultivation facilities at its Salinas farm for 5 years, with options to extend the lease for up to an additional 5 years, and Bonfire Brands USA will receive the following consideration:
- Lease payments starting at approximately USD$1 million per year in year 1, with incremental increases that could bring the annual rent to as high as USD$1.8 million per year;
- A royalty equal to 3% of the gross revenue generated by the Cultivator from its use of the Salinas farm; and
- The right to acquire up to 15% of all the product harvested by the Cultivator on the farm at a discount to market rate with extended payment terms.
Cannabis Production Facility in Reno, Nevada
Assumed control of Nevada operation licensed for cultivation, manufacturing and distribution throughout the state.
- To date, the Company has harvested 40 lbs of high-grade cannabis testing at approximately 20% THC.
- Product is being sold under the NORTHBUD brand to select retailers in Reno and Las Vegas and represents the first revenue in Nevada for Bonfire Brands
- begun construction of two additional cultivation and processing rooms which will increase annual revenue capacity by 40%.
- With recent cost cutting measures implemented post acquisition, the Company believes it is on track to bring the Nevada operation to cash flow positive in the first quarter of 2020.
- Entered into a third-party service agreement with LTH Logistics (“LTH”), a licensed third-party distribution and delivery company.
- LTH will provide these third-party services under the distribution licence of Nevada Botanical Sciences with revenue generated being split 60/40 in favor of Bonfire Brands USA.
“Similar to California, many Nevada licensees have been operating across all verticals,” said Justin Braune, President, Bonfire Brands USA. “Bonfire has chosen to reduce execution risk and minimize capital expenditures by working with established operators who seek to benefit from our strategic infrastructure, which will allow the company will expedite its progression towards EBITDA positive operations.”
Company announced that its wholly-owned subsidiary, GrowPros MMP Inc., has received its standard cultivation licence from Health Canada for 24,500 sq. ft. of indoor cannabis cultivation space at its purpose-built cannabis production facility located on 135 acres of agricultural land in Low, Quebec. The receipt of this licence allows the Company to proceed with phase one (indoor cultivation) at its Quebec Facility.
- Cultivation is expected to begin shortly with the first four months focused on establishing an inventory of mother plants and clones in preparation for the outdoor growing season that begins in late June;
- The Company will soon be filing an amendment application with Health Canada to licence an additional 1,000,000 sq. ft. of outdoor cultivation space, which it hopes will be approved in the second quarter of 2020. Operationalizing the outdoor cultivation space represents phase two of the Company’s strategy for its Quebec Facility;
- The Company expects the operation of the Quebec Facility to create approximately 25 local jobs in the Gatineau Valley region of Quebec; and
- Upon full operation of both the indoor and expected outdoor cultivation space at the Quebec Facility, the annual production is estimated to be up to 20,000,000 grams per year.
SITE DETAILS: LOW COST INFRASTRUCTURE
- North Bud will focus on GMP standardized production to be used by our pharma commercialization partners i.e. Tetra Bio-Pharma We will focus on securing unique strains containing high amounts of specific cannabinoids not typically found in recreational cannabis.
Food Grade Inputs
- Using licensed encapsulation technology we will engage existing food and beverage companies looking to develop product lines containing cannabis.
Last changed at 17-Mar-2020 12:57PM by AGORACOM