Grown Rogue International, a cannabis company in Oregon with operations and assets in California and Michigan, has announced its majority held subsidiary GR Michigan in Bay City has entered into a purchase agreement with Golden Harvests, also in Bay City. The agreement provides Grown Rogue the option to acquire a 60 percent controlling interest of Golden Harvests pending municipal and state regulatory approval.
“Michigan remains an important location for our continued growth, and Grown Rogue has been committed to finding the right fully licensed partner for a successful expansion into this market,” says Obie Strickler, CEO of Grown Rogue. “By leveraging over a decade of operational, grow, and sales experience in Oregon, we plan to build on Golden Harvests’ solid foundation to increase yields, develop new grow rooms, and establish partnerships with the best retailers in the state.”
Golden Harvests has about 80,000 square feet of cultivation space, and about 10,000 square feet are operating through three separate flower rooms, vegetative, clone, packaging, trimming, and other infrastructure required to operate. The company produces about 600 pounds annually and, with improvements implemented by Grown Rogue management, anticipates it will approach 1,500 pounds this year and 3,500 pounds in 2021.
Grown Rogue also has signed an exclusive management services agreement with Golden Harvests to immediately begin providing consulting services for a variety of business functions primarily focused on cultivation, sales, branding and marketing, and compliance. It also plans to hire 10-15 employees from the area. Grown Rogue has experience in indoor flower production, facility design, growing techniques, and facility buildout and expansion. The company also has committed to investing an additional $1.2 million of capital improvements at the facility to increase efficiency and cultivation capacity.
“Grown Rogue takes great pride in its team, who are some of the top talent in the country, and we bring a level of experience not yet seen in Michigan,” says Strickler. “We are relocating our most experienced indoor grower to Bay City to ensure this facility produces at the same quality and consistency our customers have come to expect from our flower. In addition, our sales, marketing, and operations leadership will all be spending significant time in-state to ensure that the (standard operating procedures) that have led to success in Oregon are duplicated here.”
Golden Harvests received a Class C grow license in late 2018 and had its first harvest in the spring of 2019.
“Grown Rogue has proven to be one of the top producers in the industry, and their unrelenting focus on quality, consistency, and consumer education made this partnership a natural fit,” says Dave Pleitner, founder and owner of Golden Harvests. “The Michigan market has untapped growth potential and, with Grown Rogue’s help, we plan to lead the charge with best-in-class flower cultivated right here in Michigan.”
As part of the deal, Grown Rogue will pay $810,000 in cash and cause Grown Rogue to issue 800,000 shares of common stock to the existing members of Golden Harvests.