Aleafia has completed Phase I construction and retrofitting of its Niagara Greenhouse facility located in Grimsby, Ontario. The company expects to complete Phase II of the construction and retrofitting on the balance of the facility in late Q1 or early Q2 2019.
The company has also submitted the facility's Evidence Package to Health Canada, marking the final stage in the Cultivation Licence application process. Pending Health Canada approval, the first Niagara crop is expected to begin in the next 60 days. Aleafia expects that the Niagara facility will lead to a meaningful increase in the company's total cannabis production capacity.
Aleafia will have multiple avenues to distribute the cannabis produced at Niagara, including leveraging its 15,000 kg 2019 supply agreement with CannTrust Holdings in the near term.
Upon the closing of the company's previously announced acquisition of Emblem pursuant to the terms and conditions of the arrangement agreement between the parties, Aleafia expects to leverage Emblem's highly differentiated, high-margin production capabilities. It is expected that capsules, oils and oral sprays produced with Aleafia cannabis will be ultimately processed, extracted, labelled and shipped from the Paris, Ontario Product Innovation Center, for use by medical cannabis patients including Aleafia's over 50,000 patients seen to date.
Advanced Dutch greenhouse engineering
Aleafia's cannabis cultivation is led by Head Horticulturist Lucas Escott. Escott was the co-founder of Mettrum Health Corp., which was sold to Canopy Growth Corporation for $430 million. The company's cultivation leadership team has previously led the build-out and operation of seven purpose-built cannabis cultivation facilities representing nearly 1 million sq. ft. in growing space.
The greenhouse is built under the Dutch Hybrid design and is strategically located in the cannabis cultivation friendly Niagara Region micro-climate, significantly reducing electricity expenses and accelerating the seed to harvest period.
Aleafia concluded the $9.6 million acquisition of the greenhouse on July 30, 2018. The facility has a moving container bench system which will lead to low-cost per gram yields and a perpetual, year-round harvest. The company has made up front capital investments in modern cannabis cultivation design and engineering. These investments enable production of standardized, pharmaceutical grade cannabis.
Phase I represents the construction and retrofitting of 60,000 sq. ft. of the Niagara facility, in which the company is now capable of planting its first crop pending Health Canada approval, with Phase II representing the remainder of the 160,000 sq.ft. facility.
"Bringing the Niagara Greenhouse to a plant-ready state on time and on budget speaks to our team's executional capabilities," said Aleafia Chairman Julian Fantino. "Realizing our vision means securing the highest quality cannabis for our partners and growing base of medical patients."
"This milestone, and projected growth in Aleafia's production capacity, represents a game-changer for Aleafia," said Aleafia CEO Geoffrey Benic. "With an emerging national retail network via Serruya Private Equity, our 15,000 kg supply agreement with CannTrust and the pending acquisition of Emblem, the demand for Aleafia's high-quality cannabis has never been stronger."
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