Sunniva Inc. (CSE: SNN) selling Okanagan Falls property
Sunniva Inc. (CSE:SNN) (OTCQB:SNNVF) has entered into an agreement to sell Sunniva Medical Inc. (SMI) that owns the Okanagan Falls property and related assets.
The purchaser is CannaPharmaRx (OTC Pink: CPMD). The purchase price is CAD $20 million all-cash. After the mortgage and certain other liabilities in SMI, net proceeds to SNN are expected to be CAD $15.5 million. The purchase is subject to a financial audit of SMI and financing by CPMD. Closing is expected on or around July 5, 2019.
"The sale of SMI is in line with our previously announced strategy of evaluating strategic alternatives for our operations in Canada," said Dr. Anthony Holler, CEO of Sunniva Inc. "Sunniva is focused on the advancement of our California assets and expanding our sales and distribution infrastructure in the state to support our continued growth in this rapidly evolving market….we are directing our efforts and capital resources towards the completion of the Cathedral City facility and the ongoing development of our cannabis brands in California." SNN’s intention was explained in my interview with Dr. Holler published here May 17, 2019.
I think this is a win-win transaction and from SNN’s point of view, takes them one step closer to being a pure U.S. play which is positive from my point of view. It not only shifts SNN’s asset mix toward California it also provides $15 million in non-dilutive financing. The only remaining Canadian asset is Natural Health Services (NHS).
Selling NHS is also a part of the plan and the completion of that transaction will also be a major plus in my view. The sale of Okanagan Falls makes SNN more attractive in my view. At the current price, I think the potential return for investors is significant.