Aphria teaming with Nuuvera to build large Ontario greenhouse

One of Canada’s biggest cannabis cultivators, Aphria Inc., is partnering with an upstart Canadian producer to build a 1 million-square-foot MJ greenhouse in the Ontario town of Leamington.

Aphria (TSE: APH) said in a news release it also is pumping 2 million Canadian dollars ($1.6 million) into its new partner, Nuverra Corp., through a share purchase. Nuuvera is in the final stages of the Health Canada review process to become a licensed producer.

Leamington, a small Canadian municipality about an hour from Detroit, could be home to more than 2 million square feet of cannabis greenhouse space. Earlier this year, Aphria approved a 137-million-Canadian dollar ($108 million) capital project there to establish 1 million square feet of greenhouse growing space in multiple stages.

Leamington-based Aphria’s partnership with Nuuvera also includes the following provisions:

• Aphria will provide consulting services to Nuuvera on the design and build of the greenhouse in exchange for a fee equal to 8% of Nuuvera’s cost to build the facility.
• Aphria will sell 100 acres of land in Leamington to Nuuvera in exchange for a cash payment of CA$4 million.
• Aphria anticipates that an “operational services agreement” with Nuuvera will eventually yield an annual payment of more than CA$10 million per year.
• Aphria invested CA$2 million in a Nuuvera common share offering.
• Aphria will supply Nuuvera with 1,500 kilograms ($3,300 pounds) annually, increasing up to 17,000 kilograms.

Looking ahead, Aphria said the partnership includes an agreement “to expand production across the globe,” including in Europe, Israel and Latin America.