- A syndicate of underwriters is to purchase 3.8 million units at C$5.27 per unit
- Sale terms are an amendment of previously announced agreement to sell 1.9 million units
- Sunniva is closer to achieving full vertical integration in California with launch of Sunniva-branded product lines commencing in Q4 2018
Sunniva Inc. (CSE: SNN) (OTCQX: SNNVF), a vertically-integrated medical cannabis provider, aims to raise C$20 million through the sale of units of the company to a syndicate of underwriters spearheaded by Beacon Securities Limited and Canaccord Genuity Corp., according to a company press release (http://nnw.fm/q1sZw).
Sunniva announced that the syndicate will purchase 3.8 million units priced at C$5.27 per unit, an amendment of the previously publicized agreement which said that the syndicate was to buy 1.9 million units. Subject to the approval of the Canadian Securities Exchange, the closing date of the deal will be October 10. The funds realized from the sale will go toward working capital, among other corporate expenses.
Sunniva recently released its second quarter results, at which time the company’s management said that they looked forward to future revenue opportunities (http://nnw.fm/s5F2d). In a news release, CEO Dr. Anthony Holler said, “We made great progress in Q2 2018 towards our goal of becoming a truly vertically integrated cannabis company in the U.S. In California, construction progressed at our phase one 325,000 square foot state-of-the-art Sunniva California Campus with completion targeted by the end of this year and first harvest expected in Q1 2019. Our extraction facility began generating revenue this quarter. We continue to secure new contracts and are excited about the future revenue opportunities in this and other vertical channels that maximize the synergies with our Vapor Connoisseur device business.”
In the six months up to June 2018, Sunniva’s total revenue amounted to C$9.6 million, against a net loss of C$11.2 million, compared to a C$11.7 million loss in the same period last year.
Speaking of the company’s immediate future plans, Dr. Holler said that its focus in California and the U.S. is to leverage its cultivation and extraction facilities and aggressively expand upstream distribution and retail opportunities to achieve full vertical integration from seed to sale, “which will include a focus on soon launching Sunniva branded product lines in various product categories including flower, extracted products, vaporizers and beverages.”
The first half of the year saw Sunniva entering separate agreements to provide distilled oil products to two leading California brands. Sunniva’s subsidiary, CP Logistics, has a deal with Farmacy Phactory, a producer of high-terpene strains of cannabis. CP Logistics will also produce distilled oil products for Cali Gold.
Sunniva has experienced significant expansion over the last year, including beginning construction of a new 759,000 square foot facility in Okanagan Falls, Canada, and opening a new clinic in its Natural Health Services referral network of cannabis-related clinics.
Dr. Holler continued, “In Canada, we received our Confirmation of Readiness letter for a license from Health Canada and broke ground and commenced construction on the 759,000 square foot Sunniva Canada Campus in Okanagan Falls, British Columbia. Our Natural Health Services’ clinics reported another strong quarter of revenue generation and together with the future production from the Sunniva Canada Campus, provide a solid foundation for future Canadian growth opportunities.”
For more information, visit the company’s website at www.sunniva.com
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