Vancouver’s extract and outdoor-grown cannabis producer Christina Lake Cannabis Corp. (CSE: CLC) (OTCQB: CLCFF) completed its acquisition of a large cultivation facility in southern British Columbia on Monday.
The 342-acre property obtained from an unnamed vendor for C$3 million came with 100 acres of licensed cultivation space, harvesting equipment and 19,000 kilograms of cannabis biomass. Christina Lake only had 20 acres of outdoor growing space prior.
“This acquisition will solidify our position as a key supplier to the country’s top brands,” CEO Mark Aiken said. “The increased capacity is a catalyst for robust topline growth and improved profitability by harnessing economies of scale.”
Christina Lake will plant its first crop at the new location this spring. The company will utilize 80 acres to begin with and employ the remaining space in 2025. The cannabis operator says outdoor cultivation can produce high-grade bud at a fraction of the cost indoor requires.
“Harnessing the natural sunlight and valley breezes not only saves us lighting and ventilation costs, it also helps us grow healthier and more robust plants,” the company’s Director Joel Dumaresq says.
The facilities and property were previously owned by BZAM Ltd. (CSE: BZAM) (OTC: BZAMF) before it sold them to “arms-length parties” last August for just under C$3.3 million.
Canadian market to grow despite difficulties
Christina Lake says the domestic market for pot will be worth 60 per cent more than it is now by 2027 at C$8.8 billion. The company cites the Brightfield Group for that prediction, a cannabis market researcher based in Chicago.
Despite that estimate and others indicating that the industry will grow, a Cannabis Council of Canada study last fall found that 83 per cent of licensed producers in the country reported negative net income in 2022.
In Christina’s latest presentation from November, the company reported a 28 per cent drop in gross profit and a 77 per cent decline in net income for the nine months ended Aug. 31.
The company’s primary focus is producing high-grade extract and distillate. Christina uses drones to monitor its outdoor crops.