New Leaf Ventures Sells Cannabis Cultivation Assets Shifts Focus On Retail Brands And Products

New Leaf Ventures Inc.’s NLVVF NLV assessment of the region’s over-saturated cannabis production conditions has led to the strategic divestiture of equipment, downsizing of related personnel, and an infusion of capital through the sale of cultivation related assets. The company and the license holder remain committed to the development, production, distribution and sale of cannabis retail brands and products.

New Leaf Ventures Inc (“NLV”), through its wholly owned subsidiary New Leaf USA, dissolved its master lease on the facility currently used for cultivation by the license holder. In addition, the company has waived its option to purchase the producer license from New Leaf Enterprises (“NLE”) allowing that entity to sell the license to a third-party known Washington State producer.

Boris Gorodnitsky, president & co-founder, New Leaf USA & director, New Leaf Ventures Inc. stated: “We are finding high quality biomass for less cost than we can grow in our facility. There are dozens of partner farms that do incredible jobs at growing biomass that don’t have the distribution capabilities and brand reach that we can perform. By eliminating the cost fluctuation of over-saturation and harvest yields we can purchase at a fixed cost. This allows us to control our margins. Also, with a focus on ancillary products the cost of active THC and CBD distillate continues to go down making these products more profitable.”

A third-party asset management company has purchased the turnkey cultivation infrastructure and equipment and will lease the cultivation facility. New Leaf Enterprises (the license holder) will retain its processor license, allowing it to develop, manufacture, and distribute all cannabis-derived products in the State. New Leaf USA retains the option to purchase the processor license should ownership legislation in the State change in future. The sale of all fixed assets and equipment related to the cultivation facility and release of the facility lease will allow New Leaf to focus its operations on the advancement of processing and distribution of high-quality consumer goods to retailers throughout the State. This transaction is a significant step forward towards aligning New Leaf Enterprises operations with New Leaf Ventures “House of Brands” core mission and business model. Gross sale proceeds to the company’s subsidiaries pursuant to the divestiture were $266,797.

The company’s subsidiary New Leaf Services LLC has parted ways with Brad Songhurst and David Tran.

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