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We didn't get the offer on the terms and within the timeframe we needed

On Oct. 18, the company said it was looking to raise between $70 million and $80 million to implement a new strategic construction and operating plan that would see it slash its 2020 target capacity from 147,500 kg to between 20,000 and 22,000 kg. The raise would also allow the company to become profitable in the second quarter of 2020, it said.

Daniel Sax, the CEO of Sensi Properties, a cannabis real estate investment company, said it didn’t surprise him to see TGOD try to sell its Ancaster facility. In late August, Hamilton-based Beleave Inc. announced it signed a letter of intent to leaseback its London, Ont., facility in a deal that would net the company $7 million.

“(Real estate) will eventually move off these companies’ books,” Sax said. “You’re seeing an acceleration of that happening in which the free flowing money in the public markets is just no longer there. The time these companies could raise $200 million overnight is gone so they’re looking around at alternate financing sources.”

Sax was also not surprised to see that the property hadn’t sold, saying that the $94 million asking price was “out of line.”

“Cannabis companies tend to think it is worth what they put into the facility and from a real estate valuation standpoint it is not at all,” he said.

Because the cannabis industry is still in its infancy and it’s difficult to say which companies will still be operating in 15 years, any kind of long-term deal could come with risks for prospective buyers.