Zenabis Global has slashed the price of its Delta indoor cannabis growing facility as the company moves from a cultivation focus to distribution.
In March, the Vancouver-based and publicly traded company reported its 25,000 square foot indoor facility and office — converted to pot use in 2018 — would be sold. It listed in June for $12.75 million and the price reduced the next month to $11.75 million.
According to the most recent listing from Colliers International, the asking price is now $7.95 million — a 40 per cent drop. The company also owns a much larger facility in Langley, as well as cultivation assets in Aldergrove and Pitt Meadows and in New Brunswick and Nova Scotia.
The company stated after releasing its second quarter report that it was trying to transition from primarily cultivation to being distribution focused.
“This strategy reduces or eliminates the need for large capital investment, while generating fees and margins with equivalent net returns that are generally available from seed-to-sale operations,” the company stated.
“The corporation is currently involved in late-stage negotiations to facilitate several export opportunities to Europe, Israel and Australia, and is already active in Australia.
Colliers International vice-president of Unique Properties Alan Johnson said the fledgling cannabis industry was morphing into “2.0” with mergers, takeovers and a tightened focus on distribution, rather than just cultivation.
“Supply chains have changed, production facilities have changed. The market has evened out in other ways,” Johnson said. “We went from concrete bunkers to grow cannabis to greenhouses to now everybody wanting processing and distribution facilities.”
“It’s a changing industry,” he said. “With cannabis 2.0 some lose, some rise to the top. It’s like the B.C. wine industry where there have been a significant amount of consolidations in the past four years.”
Colliers International senior associate Bianca Gilbert is handling the sale of the Zenabis facility (with Johnson) and said there had been 50 different showings, mostly to groups in the cannabis industry.
In less than two years, Zenabis shares have fallen from a high of $5.59 in November 2018 to a low of 5.5 cents on Nov. 3.
The shares price has not been impacted by COVID-19, having started to fall off in March of 2019.