Leef Brands Secures $7M Financing Via Partial Sale Of Its Cultivation And Real Estate Assets

LEEF Brands, Inc. LEEEF LEEF announced a $7.0 million financing related to the sale of a 60% interest of its wholly owned cultivation and real estate assets in Santa Barbara, California.

This milestone transaction comes after three years of diligent efforts during which LEEF secured a 187-acre land use permit in Santa Barbara County. The proceeds of the transaction will be principally utilized to develop one of the largest biomass cultivation sites in the state, for working capital needs, as well as supporting the expansion of LEEF Labs, the company's manufacturing facility.

Under the terms of the transaction, Arbor Ranch SB, LLC, will provide funding of $7.0 million through an interest free loan agreement with the company to finance the buildout and operation of the cannabis cultivation business, which shall be wholly managed by the company. The company shall pay the lender a customary lease amount until the loan is repaid in full and the lender shall receive membership units equal to 60% of the equity value of the real estate holdings. In addition, the lender shall receive half warrants to purchase up to 56.9 million common shares of LEEF Brands, Inc. with a strike price of CA$0.08.

The initial plan for the cultivation site is for LEEF to strategically develop 187 acres. Each acre is expected to yield between 3,500 and 6,000 pounds of dried biomass per year. The remaining acreage will enable the company to expand significantly should it have the ability to distribute products beyond state borders in the future.

The company also announced the resignation of Mark Smith from the board of directors and as chairman of the board of the company, effective May 31^st, 2023.

Photo by Richard T on Unsplash

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