TGOD stock is in the red today after reports that The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) attempted to sell its $100 million CAD unfinished Ancaster facility—but there were no takers.
Failed Facility Sale
The Financial Post reported over the weekend that the Ontario-based pot producer listed its flagship Ancaster facility on the market for $94.2 million CAD, despite construction not yet being finished and TGOD having invested $107 million CAD into the project. The company was seeking a leaseback agreement on the property and was willing to pay over $10 million CAD in rent per year over a 15-year period. TGOD stock is down 1.8% on Monday morning.
The Green Organic Dutchman did receive offers on the facility; however, none of these failed to satisfy the terms the company was seeking. Sebastien Bouchard, a spokesperson for the company, said: “Based on current market conditions, we didn’t get the offer on the terms and within the timeframe we needed so we had to disclose we’re reviewing alternative options.” TGOD shares have lost over 80% of their value since March as the company struggles for liquidity in a floundering market.
TGOD Stock Sinking on Financing Woes
Last week, the company issued a revised timetable for the completion of its Valleyfield site in the case that it was unable to obtain financing on reasonable terms, as it appears is the case today. Construction of the site will now be segmented into smaller phases in order to increase cash flow in 2020, with the expected completion date now uncertain and depending on changing market conditions. TGOD stock slumped to a 52-week low of $0.82 following that update.
The company’s struggles look set to continue into next year unless legalization 2.0 provides as significant a shakeup for the industry as many investors are hoping. The Green Organic Dutchman now says it will produce 20,000 to 22,000 kilograms next year, a sizeable decline from the previous figure of 147,500 kilograms previously forecasted. The company now estimates that it will need between $70 million CAD and $80 million CAD by the end of Q2 next year, with the source of that financing still in doubt.
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