The Green Organic Dutchman Holdings Ltd. (TSX:TGOD) signs a LOI with Denmark’s Queen Genetics/Knud Jepsen A/S
SmallCapPower | July 3, 2018: The Green Organic Dutchman Holdings Ltd. (TSX:TGOD) Wednesday, in a major international expansion move, announced that it has signed a letter of intent with Denmark’s Queen Genetics/Knud Jepsen A/S (Knud Jepsen) for a 50/50 joint venture. The final agreement is expected to be completed over the coming weeks.
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Initially consisting of two facilities located within Knud Jepsen’s 1.3 million sq. ft. automated greenhouses in Denmark, the JV will include 200,000 sq ft of buildings by Thomas Larssen of Aurora Larssen Projects Inc., helping Green Organic Dutchman Holdings to add ~25,000 kgs of organic-funded capacity and takes its total funded capacity to 195,000 kgs. Green Organic Dutchman Holdings is focused primarily on preparing for the domestic recreational opportunity and the Denmark JV provides TGOD a decent platform to enter the large European market. Management noted that Green Organic Dutchman Holdings Ltd.’s business plan is to enter the European at scale and the initial two facilities are only the first step in that direction.
Leveraging TGOD’s organic growing protocols and Knud Jepsen’s vast experience in advanced R&D in plant genetics, the JV will focus on the cultivation of premium organic cannabis and primary extraction. As part of the agreement, Green Organic Dutchman Holdings will have the exclusive right to all cannabis-related production at the JV through a guaranteed offtake agreement at a pre-determined value over the production cost to the JV.
Green Organic Dutchman Holdings President Csaba Reider said, “Europe, being home to 750 million people, is a key market, and Knud Jepsen has nearly 3 million sq. ft. of horticultural operations, 75 years of operating experience and a significant focus on R&D, providing an incredible platform for TGOD to enter the European market. These first two facilities are simply the first step in our business plan to enter Europe at scale. We look forward to completing our final agreement in the coming weeks.”
Green Organic Dutchman Holdings is focused exclusively on producing quality, organic cannabis with all-natural principles. To prepare for the impeding recreational opportunity, TGOD is planning 970,000 sq. ft. of combined facilities that would produce 116,000 kg of cannabis annually, which would make it one of the largest cannabis producers in Canada. Aurora Cannabis, the second-largest cannabis producer in Canada, holds a strategic $78 million (17.5% stake) investment in Green Organic Dutchman Holdings, including a purchase order for 20% of TGOD’s future production. TGOD currently trades at a market cap of $1.47 billion.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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