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C21 Investments advances US$16M Phantom Farms, SDP Development deal

C21 Investments Inc. has reached a definitive agreement for a US$16 million acquisition of organic cannabis cultivator Phantom Venture Group LLC and other assets.

Vancouver, British Columbia-based C21 Investments in June signed an agreement to acquire Phantom through a noninterest-bearing, convertible promissory note worth US$16 million.

In an Oct. 18 press release, C21 Investments said the deal had moved one step closer towards completion, with the companies entering into a definitive agreement to purchase Phantom Venture Group and Phantom Brands LLC, as well as the owner of the property used by Phantom Farms' business, SDP Development Group LLC.

Phantom Farms owns an 80,000 square foot outdoor cannabis cultivation space and other assets, with a further 40,000 square feet of space under development in Southern Oregon.

The deal is subject to approval from the Oregon Liquor Control Commission, which is expected in three months, after which closing of the deal will occur. C21 Investments said the aggregate purchase price for Phantom Farms' membership units will be US$8 million, payable by the issuance of 2,670,000 common shares priced at US$3 apiece, plus 2 million share purchase warrants of C21 Investments. Each warrant is exercisable for one share at C$1.50 apiece, plus up to an additional 4.5 million shares depending on certain performance targets after the closing date of the deal.

As for SDP, closing of the acquisition of the company's membership interests has been deferred until October 2020, according to C21 Investments. Phantom Farms will continue to lease the property until then at market rents. After closing, C21 Investments will acquire 100% of SDP's membership units. The aggregate purchase price will be US$8 million cash, or 2,670,000 shares at US$3 each, depending on the election of SDP at that time.

C21 Investments is a cannabis company that cultivates, processes, and distributes cannabis and hemp-derived consumer products in the U.S.