Transaction provides strategic partnership with cannabis industry real estate leader, Subversive Real Estate Acquisition REIT LP
TORONTO, Oct. 7, 2020 /CNW/ – Flower One Holdings Inc. (“Flower One” or the “Company”) (CSE: FONE) (OTCQX: FLOOF) (FSE: F11) today announced that the Company has entered into a term debt loan agreement (the “Loan Agreement”) for US$39 million with Subversive Real Estate Acquisition REIT LP (“Subversive REIT”). As part of the Loan Agreement, Flower One granted Subversive REIT a two-year option to pursue a sale-leaseback transaction (the “Sale-Leaseback Option”) to purchase Flower One’s 455,000 square-foot cannabis cultivation and production facility in North Las Vegas, Nevada for up to US$80 million, and subsequently lease it back to the Company.
“Subversive REIT is positioned to be a leader in the U.S. cannabis real estate market,” said Ken Villazor, President and Chief Executive Officer of Flower One. “We are excited to have this opportunity to build a strategic partnership with such a deeply connected and highly-knowledgeable cannabis real estate partner that is poised to benefit Flower One both in the near- and long-term as we continue to enhance our operations in Nevada.”
Also commenting on the transaction, Richard Acosta, Chief Executive Officer and Director of the General Partner of Subversive REIT, said “Subversive REIT was founded with a mandate to provide real estate capital solutions to leading U.S. cannabis operators. Entering into a loan agreement and potential sale-leaseback with Flower One fulfills this mission and then some. The state of Nevada and Las Vegas specifically, are important markets for cannabis brands, and Flower One operates the dominant cannabis cultivation and production asset in the state, making this investment an ideal opportunity for Subversive REIT while supporting Flower One’s ongoing growth.”
The Loan Agreement is for a seven-year interest-only loan at a rate of 10.5% for the