Xtraction Services entered into a lease agreement with PharmaCann, one of the largest privately held and vertically-integrated cannabis companies operating cultivation, manufacturing, distribution and retail locations in six states, based in Chicago.
PharmaCann has been approved for an equipment lease of up to $3.4 million for new equipment purchases to be deployed in tranches on a pro-rata basis and based on 48-month terms. Tranche 1 totals $0.87 million of new equipment, which allows PharmaCann to expand its manufacturing capabilities in multiple markets, including Ohio, Illinois, Massachusetts and Pennsylvania.
XS utilized its preferred vendors to ensure a seamless procurement process with the PharmaCann team and the opportunity allowed XS to add multiple new original equipment manufacturers to the program.
“PharmaCann is one of the largest vertically-integrated cannabis companies in the United States, committed to providing safe, reliable, top-quality cannabis to improve people’s lives,” commented David Kivitz, chief executive officer of XS. “They represent the quality of customer XS is looking to work with and we are proud to be an integral part of their growth. PharmaCann, a major multi-state-operator, is one of the largest leases XS has signed to date and we are aggressively working to add new customers through our current pipeline of over 32 advanced discussions with potential new customers. We are excited with the trajectory the company is taking and look forward to providing additional updates as they become available.”
Brett Novey, chief executive officer of PharmaCann, commented, “It was a pleasure working with XS. Their team was a great partner from start to finish, and always had our best interest in mind. This equipment lease allows PharmaCann to expand our production capabilities in high-growth, limited-license jurisdictions in a more capital-efficient manner.”
In connection with the transaction, XS has agreed to issue an aggregate of 600,000 common shares of the company as an advisory fee to an arm’s-length consultant, subject to the approval of the Canadian Securities Exchange.
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