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Emerald Health Accelerates Expansion with $13 Million Capital Raise

Ryan Allway

February 21st, 2017

News, Top News

Emerald Health Therapeutics Inc. (TSX-V: EMH), a licensed producer of medical cannabis under Canada’s AMCPR program, recently announced that it raised $13.8 million to accelerate its ambitious growth plans. In particular, the company plans to expand from its indoor cultivation facility in Victoria, BC to 32 acres in metro Vancouver, BC. The move could dramatically increase its capacity and future revenue for shareholders.

In this article, we will take a closer look at the capital raise, the company’s growth plans, and why investors may want to consider the stock.

Emerald Raises $13 Million

Emerald Health recently announced that it raised $13,817,250 to accelerate the expansion of its facilities and for general working capital. Under the terms, the company issued one share of common stock and one and a half warrants with a $2.00 per share strike price and a 24 month expiration. The company further retained the rights to accelerate the expiration of the warrants if its share price exceeds $2.50 for 20 consecutive days.

Currently, the company’s stock trades for $1.38 per share, which is three cents higher than the per unit price of its capital rise. New investors wouldn’t face any dilution until the stock appreciated approximately 45% in two years to $2.00 per share, which means that there’s relatively little risk for investors with today’s cost basis. The maximum impact of any dilution would also be mitigated by the accelerated expiration that would force conversions.

As of the end of the third quarter, the company had roughly $900,000 in cash and equivalents on its balance sheet. The addition of $13.8 million in fresh capital will help shore up its balance sheet and provide significant flexibility for its expansion plans.

Ambitious Growth Plans

Emerald Health plans to significantly increase its capacity to produce dried cannabis and related products over the coming months on its 32 acres of land in metro Vancouver.

“Having the experience and capability to scale up operations combined with the opportunity to lease up to 32 acres of ALR lands is a game changer for Emerald,” stated Jim Heppell, Lead Director of the Company. “We have researched facilities built by other Licensed Producers and have brought in our contacts from the life science industry to design one of the most cost-efficient cannabis production facilities in Canada.”

The company plans to build a modular hybrid greenhouse growing facility with 78,000 square feet of growing space, while concurrently adding 50,000 more square feet of growing space and advanced processing facilities that would be completed soon after the first phase. The team plans on leveraging higher amounts of sunshine and lower electricity costs to operate at a significantly lower cost than many competing licensed producers.

“We have spent many months of planning and with the years of experience of our management team we expect to be able to build out Phases I and II in a timely fashion and feed the production and consumer demands of the anticipated Canadian recreational market,” added Mr. Heppell. “Emerald’s plans would result in the company having over 100,000 square feet of production space with room to increase its total production space to more than one million square feet.”

Looking Ahead

Emerald Health Therapeutics Inc. (TSX-V: EMH) recently announced that it raised roughly $13.8 million in fresh capital to accelerate its expansion plans. After acquiring 32 acres in Vancouver, BC, the company is well-positioned to expand its growing capacity to over 100,000 square feet over the near-term with the potential to increase total production space to more than a million square feet in the future – ample room for growth by any margin.

For more information, visit the company’s website or CFN Media’s company profile.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

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CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.

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