Zenabis selling cannabis facility for half original asking price

Vancouver, British Columbia-based Zenabis Global reached a conditional agreement for the sale of its facility in Delta, B.C., for what appears to be half the original listing price.

The conditional deal comes as large Canadian marijuana producers look to unload indoor and greenhouse cultivation properties to reel in industrywide excess supply.

The gross purchase price of the Delta property is 6.65 million Canadian dollars ($5.1 million), Zenabis said in a news release.

A property matching the same description had been listed for roughly CA$12.75 million earlier this year before being lowered to CA$11.75 million.

Zenabis expects the sale to close no later than Dec. 30.

The company previously said its property in Delta was worth more than CA$12 million, according to a regulatory filing.

“Through a third-party appraisal, the fair value less cost of disposal of the Delta Property was determined to be $12,303,750, resulting in no impairment losses during the three months ended March 31, 2020,” the filing reads.

MJBizDaily asked Zenabis who conducted the appraisal, but an answer was not received by press time.

Zenabis will be far from the first Canadian cannabis producer to lose a substantial sum of money on a facility transaction.

Many of the industry’s greenhouse and indoor cultivation deals in recent years led to real estate losses and “balance sheet adjustments” worth billions of dollars, MJBizDaily reported earlier this month.

The country’s largest producers, such as Aurora Cannabis, Canopy and Tilray, have scrambled to shutter cultivation facilities.

Even before the country’s first legal sale in 2018, Canadian producers had bankrolled more than enough capacity to meet early demand for adult-use products.

Aurora Cannabis recently paused operations at its large Sun greenhouse in Medicine Hat, Alberta, “indefinitely.”

As of the end of March, idle property, plant and equipment attributed to that facility reached CA$257 million.

Shares of Zenabis Global trade on the TSX Exchange as ZENA.

Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at mattl@mjbizdaily.com.