Trichome Financial Wins Cannabis Cultivator JWC's Assets With $13M Bid

Trichome Financial Corp. TFC (OTC: TRICF), a finance company focused on the cannabis industry, announced Tuesday the purchase of James E. Wagner Cultivation Corp. (JWC) for $13 million.

The Toronto-based company said it plans to restructure the Canadian cannabis company after obtaining approvals from Health Canada and the Ontario Superior Court of Justice. 

Trichome will acquire JWC's assets free of all liabilities, including 114,000 square feet of licensed indoor space and an annual cultivation yield of around 7,000 kilograms of cannabis.

The company said it expects to continue with the same production volume, generating roughly $10 million of EBITDA within one year.

It will also center around high-THC flower and single-origin derivative products while resetting the company's balance sheet free.

The Trichome, JWC Backstory

Trichome has been investing in JWC since February 2019.

In November, it closed a follow-on loan to JWC of up to $7.5 million.

Three months later, the cannabis cultivator released its fiscal-first quarter 2020 financial results, with revenues down by 74% from the previous quarter.

Shortly after, the cannabis cultivator singed another deal with Trichome, securing an additional $2.8 million through a debtor-in-possession loan. Last week, the loan grew in size by 37%.

JWC announced that its assets were up for auction in April. 

Trichome Financial CEO Michael Ruscetta said the company is well-acquainted with JWC's operations and assets.

"A comprehensive operational review has been underway since April 9, 2020, led by Howard Steinberg in his capacity as Chief Restructuring Officer and a team of industry experts," the CEO said in a statement.

"The team of industry experts retained by JWC during these proceedings has worked with Mr. Steinberg to develop an operating plan that we believe will allow JWC to grow and prosper over the long term."

Earlier this year, JWC introduced its first Cannabis 2.0 products to Canadian customers.

Courtesy photo.