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Future Farm Technologies (OTC:FFRMF) provides investor update

Tony Zerucha

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Future Farm Technologies (CSE:FFT) (OTC:FFRMF) provided their latest investor update this week.

In early 2018 Future Farm closed new investments in Florida, Puerto Rico, Rhode Island and Maine and has since focused on integrating those acquisitions. The company raised US$6.34 million of new capital from a fund of Yorkville Advisors over the course of the year.

Cultivation

Cultivation projects in multiple U.S. and Canadian markets has the company believing it is well-positioned to be a leading cultivator of cannabis, including hemp, and other types of produce. Future Farm’s Build-Own-Operate model and Controlled Environment Agriculture (CEA) practices augment this belief.

Florida

Future Farm owns a fully operational, approximately 10-acre greenhouse business in Apopka known as White Sand Nursery which grows ornamental plants sold in large retail stores throughout North America. The intent is to cultivate cannabis in its greenhouses and outdoor farmland, once fully licensed.

White Sand hired Jose Sikaffy in August as director of cultivation in preparation for entering the Florida medical cannabis business. Before joining White Sand, Mr. Sikaffy was cultivation director of Remeny/Tredwell Nursery, a Florida licensed medical cannabis facility in Eustis. Mr. Sikaffy graduated from Valencia College in Orlando and holds a degree in plant science and agriculture technology.

Maine

Future Farm’s 80 per cent subsidiary Future Farm Maine received three licenses for industrial hemp cultivation in the state: one each for farms in Amity and Hersey, and one for its hemp processing facility in Belfast.

Future Farm Maine is expected to provide multiple revenue streams from the sale of harvested hemp biomass, CBD concentrate and isolate extracted from the biomass, and hemp seeds. The company completed its harvest of 50 acres of hemp in Maine in October 2018 and announced the harvested hemp passed state-mandated testing for acceptable limits of THC (<0.3 per cent THC).

Rhode Island

In January 2018, Future Farm purchased a 15,000-square foot building in Providence to be used as a licensed medical marijuana cultivation facility. Once licensed, this property will be used to provide wholesale cannabis to Rhode Island’s state-sanctioned dispensaries.

The building is located in an M-1 zone, which permits the cultivation of cannabis by right. Future Farm has a letter of intent to lease the building to an entity with a provisional license for the cultivation of wholesale medical marijuana. Renovation is underway to create 6,480-square feet of cultivation space, in addition to processing space and a commercial kitchen to prepare edible cannabis products. 

Produce farms: Maryland and Alabama

Future Farm is pursuing opportunities to grow produce in Maryland and Alabama using CEA in collaboration with CBO Financial and Volunteers of America (VOA). The primary objectives of both farms is to establish economical and environmentally friendly vertical farms, provide job training opportunities (specifically to the VOA’s reentry program for ex-offenders), provide therapeutic programs, support entrepreneurship development, and establish a model for replication at other reentry and social services facilities.

With the assistance of CBO Financial, Future Farm is pursuing locations in Maryland and Alabama of approximately 25,000 square feet each. Future Farm’s plan is still to first develop a prototype farm as a demonstration project for potential sources of financing, then to use this model to expand the Company’s CEA technology and the training and therapeutic programs developed by VOA into other markets throughout the United States.

Processing, breeding and genetics

Processing

Concentrates are used to make edibles, topical ointments, capsules and other packaged products requiring professional extraction technology and facilities. Future Farm said the market for high-quality cannabis concentrates is increasingly strong.

The company moved the extraction equipment it acquired for use in California to its hemp drying and curing facility in Maine. The extraction operation will be set up once harvest and seed sorting are completed.

Breeding and genetics

Future Farm intends to form a jointly owned limited liability company, Future Farm Rahan, with agro-biotechnology company Rahan Meristem. Future Farm Rahan will develop, own and utilize Rahan’s patented and proprietary technology to mass-produce elite clones of cannabis and hemp and related technology. These clones are expected to have higher levels of THC and CBD that are focused on achieving specific, desired results in patients and recreational users. The new company intends to commercialize the intellectual property it develops by both selling clones and licensing technology.

Retail operations

Vertically integrated dispensaries: Massachusetts

Future Farm loaned $1.325 million to BCWC, the holder of a provisional medical license and two provisional adult use licenses in Massachusetts. The companies are discussing further financial assistance. Future Farm has also recently begun discussions with other holders of provisional licenses in Massachusetts about acquiring interests in those businesses.

Dispensaries: Puerto Rico

Future Farm is a 40 per cent owner of and holds a 60 per cent economic interest in FFPR which will own and operate five dispensaries in Puerto Rico under the Clinica Verde brand.

As of September, about 34,000 patients were signed up for the Puerto Rico medical marijuana program according to Marijuana Business Daily. This is almost triple the 12,000 registered patients from 2017.

FFPR is preparing to launch three of the five dispensaries early in 2019. The three dispensaries will be located in the Condado area of San Juan, on University Avenue in the Rio Piedras neighborhood of San Juan, and in the city of Ponce. Work is underway at both the Condado and University Avenue locations.

LED Canada

LED Canada continues to operate out of its showroom and integrated warehouse in Vancouver, British Columbia. The company is conducting a technology and marketing review in order to increase sales via e-commerce channels.

Technology

Future Farm completed its spinout of NexTech AR Solutions in September.

Corporate updates

Financing

In August Future Farm entered into a secured convertible debenture from a fund of Yorkville Advisors Global in the principal amount of US$4,202,423, of which US$3,202,423 refinanced the remaining principal and accrued interest on the US$4 million convertible debenture entered into with Yorkville in March 2018 and US$1,000,000 was paid in cash to Future Farm.

In September, Future Farm announced an extension to its conditional lease commitment with Veterans Capital, a specialty finance company providing financial and leasing services. Veterans Capital agreed to extend to Mar. 1, 2019 the period of time during which Future Farm can access its secured lease line of credit in an amount not to exceed US$500,000.00.

In November Future Farm entered into two secured convertible debentures with Yorkville. One is in the principal amount of US$1,777,155, which refinanced the principal and accrued interest on the US$1,660,000 convertible debenture entered into with Yorkville last December. The other is in the principal amount of US$1,340,00, which was paid to the company in cash net of certain fees and expenses.

Tony Zerucha

Tony Zerucha is an alternative finance journalist with more than seven years experience in the space. The author of more than 1,000 articles, Tony was named LendIt's 2018 Journalist of the Year.

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