The Parent Company To Boost Its Cannabis Supply With $67M Investment

TPCO Holding Corp. (OTCQX:GRAMF), which does business as "The Parent Company" opted to invest some $50 million in GH Group, Inc. via a private placement offering by Mercer Park Brand Acquisition Corp. (NEO: BRND.A.U) (OTCQX:MRCQF).

The strategic investment comes on the heels of the announced merger between Mercer Park Brand, a special purpose acquisition company, and Glass House.

It is expected to allow The Parent Company to acquire roughly 6.2% of subordinate voting shares of Mercer Park Brand.

In addition, it's expected to close concurrently with Glass House's debut on the NEO Exchange under the "GLAS.U" ticker following the finalization of the merger with Mercer Park Brand in the first half of 2021.

Cultivation And Retail Deals

The Parent Company is also looking to expand its access to greenhouse-grown cannabis and retail shelf space through biomass offtake and retail partnership deals with Glass House.

The companies entered into a non-binding letter of intent to negotiate a 10-year biomass offtake agreement and a six-year retail deal worth $25 million.

Glass House's greenhouse cultivation footprint currently spans 500,000 square feet. The greenhouse was recently expanded, and it produces over 110,000 pounds of dry flower biomass annually.

Glass House also runs four award-winning dispensaries in California, in addition to two recently announced retail licenses in Santa Barbara county.

Land Acquisition

Simultaneously, The Parent Company agreed to acquire four acres of Sonoma County-based outdoor cannabis cultivation for $17 million in the combination of cash and stock.

The acquisition of the land, which was purchased from a consortium of experienced cannabis farmers, Mosaic.Ag, an affiliate of Soma Rosa Farms, is expected to close in the second quarter of 2022.

The consortium of farms will continue to cultivate cannabis and supply the Company with high-quality cannabis under a separate agreement.

"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," Steve Allan, CEO of The Parent Company, said Monday.

Photo by Tim Foster on Unsplash