The Parent Company gears up to broaden cannabis supply with $67 million investment

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Bethan Rose Jenkins, Cannabis News Writer/Editorial

On May 17, The Parent Company announced its entry into agreements that will bolster its supply of high-quality, California-cultivated cannabis. Valued at $50 million, the strategic investment involves a retail partnership agreement and 10-year biomass purchase with Glass House Group (GHG).

As a direct effect of The Parent Company’s  $50 million strategic investment in GHG, the company will secure long-term access to cannabis that has been cultivated inside a greenhouse. Moreover, the deal includes the procurement of retail shelf space that will be used to sell The Parent Company’s branded products across Glass House retail locations.

GHG’s strategic investment was made through special purpose acquisition company Mercer Park Acquisition Corp’s private placement pertaining to its merger. A primary goal of this agreement is to grant California’s largest vertically-integrated omnichannel cannabis platform, The Parent Company, with unparalleled scale and margin for the forthcoming decade.

The acquisition is anticipated to close in Q2 2022, subject to regulatory approval and normal closing conditions.

The Parent Company will acquire four acres of outdoor cultivation space in California 

Under the terms of the $67 million investment agreement, The Parent Company has inked a definitive binding agreement to purchase four acres of licensed high-quality exterior cannabis cultivation space in Sonoma County, California. 

Grow space will be procured from a group of advanced-level cannabis farmers associated with the Mosaic.Ag organization. The Parent Company has entered into this agreement with the affiliate of Soma Rosa Farms, Mosaic.Ag, for a total consideration up to $17 million worth of cash and common shares in company capital.

“These partnerships are a fantastic opportunity to secure long-term access to over 900,000 pounds of high-quality, low-cost, California-grown cannabis for use across our expanding portfolio of branded products,” said The Parent Company’s Chief Executive Officer, Steve Allan.

Glass House Group boasts a colossal California greenhouse cultivation footprint 

Every year, more than 110,000 pounds of dry flower biomass is produced by Glass House Group at its state-of-the-art greenhouse facilities, which are powered by SoCal sun. Extending over 500,000 ft², the cultivator’s greenhouse space is set to expand to six million ft² in the near future.

Not only is GHG’s greenhouse footprint forecast to grow but also, its retail footprint. Currently, the company manages four award-winning California cannabis dispensaries. Plus, the company recently confirmed that it had obtained two new retail licenses in Santa Barbara county.

The cultivation specialist’s retail expansion plan involves an agreement whereby GHG will merge with 17 in-process retail licenses from “California’s most local cannabis retail company,” Element 7. Once the merger is complete, the cultivator’s retail footprint will swell to 23 open locations by the end of the first half of 2022. 

The aforementioned agreements are expected to commence upon closing of the Qualifying Transaction, which is set to be finalized by Q3 2021.