GrowLife, a publicly traded company that makes software and equipment for the cultivation and sale of marijuana, will receive up to $40 million in funding from a Nevada private investment group called CANX USA.
California-based GrowLife said it will use the funding make acquisitions and provide financing to cultivation operations and dispensaries in eight states – including Arizona, Colorado, Nevada and Washington – as well as in Canada.
Under the deal, the company will receive $1.3 million in initial funding for the financing program. CANX has agreed to provide up to $40 million total over time.
Additionally, the two firms have created a joint venture company, called Organic Growth International LLC. GrowLife maintains a 45% ownership stake in the company.
“This financing arrangement … strengthens our ability to assist growers already active in the legal cannabis arena with rapid expansion ahead of what we anticipate will be a flood of corporate interest in growing,” Sterling Scott, GrowLife’s CEO, said in a release. “And it also firmly launches GrowLife into a vertical with a much higher ceiling of opportunity.”
Investors applauded the move, sending GrowLife’s stock up as much as 3 cents a share – or 50% – in early morning trading today after the deal was announced.
CANX USA is a private investment group comprised of investors with expertise in agriculture, supply chain, retail, real estate, technology and marketing. The company’s stated goal is to facilitate “game-changing acquisitions and upgrade technologies for its partners and investments.”