(FinancialPress)—Construction is well underway on Phase 2 development for the purpose-built, multiple room cannabis production facility of Acreage Pharms Ltd., the wholly-owned subsidiary of Invictus MD Strategies Corp. (OTC:IVITF)(TSX.V:IMH).
Expected to be completed by the end of January, 2018, the foundation for the Phase 2 portion of the West-Central Alberta facility has already been poured, with exterior completion scheduled for November, 2017.
Acreage Pharms is a licensed producer (LP) under Health Canada’s Access to Cannabis for Medical Purposes Regulations (ACMPR). The LP already has an existing 6,800 square-foot concrete and steel facility on a 150-acre property with the capacity to produce 609 kgs of cannabis annually.
Phase 2 of the Acreage Pharms facility was originally planned to take up 27,800 square feet upon completion. However, after optimization was conducted, the design was upgraded to span 32,000 square feet, with the additional space affording capacity to accommodate administrative and production staff.
The new facility is set to house nine separate flowering rooms, each of 1,600 square feet in area. The rooms allow for maximum available floor space, and fully controlled and optimized environmental settings. Harvesting is set for every two weeks, while grow teams complete their daily procedures.
As of February 2018, Acreage Pharms is set to commence production at the facility, at a run rate of approximately 5,000 kgs of cannabis per year, based on the improvements realized from Phase 1, with the addition of the construction of the Phase 2 facility.
Construction of the Phase 2 facility is on target to remain within its initially budgeted cost of $6 million.
Additionally, a second level addition is slated for construction, which will give Acreage Pharms the ability to store up to $60 million worth of cannabis product at any given time. Initial harvests have yielded high quality, non-irradiated medicinal cannabis, and Acreage Pharms currently has 80kg of dried cannabis in its vault. The stores of cannabis are ready for sale, once Acreage Pharms has received its official sales license.
The location of the facility was carefully selected, taking advantage of a $0.028/kW electricity cost—one of the lowest rates in Canada. Other infrastructure advantages to the facility are a lack of water disposal fees, as the design is optimized for utilizing an on-site septic tank, and the drain field method. The goal for Invictus is to have Acreage Pharms maintain one of the lowest per-gram production costs in the industry.
“Invictus MD currently has $27 million in cash in the treasury. This cash has been earmarked for expanding square footage to meet the significant demand that is not only currently existing as part of the medical market but also to accommodate the recreational market that will commence mid next year. Invictus MD has enough cash in the treasury to expand its canopy footprint on its 250 acres of property and produce 15,000 kg’s per annum making it one of the top producers under the ACMPR.” said Dan Kriznic, Chairman & CEO, of Invictus MD.
“The construction plans at Acreage Pharms has been our corporate strategy to take advantage of the current and future demand for a high quality standardized pesticide free product, in this emerging market.”
The Phase 2 expansion is fully funded, and fully permitted.
There is also a Phase 3 expansion in the works, which includes a 76,750 square-foot facility, capable of producing 9,000 kgs of cannabis annually. While subject to necessary permitting, Phase 3 is slated to be completed by June 2018, and comes with a $16.5 million price tag.
Acreage Pharms is just one of Invictus’ assets in its portfolio of vertically integrated cannabis businesses. The company also owns a third of AB Laboratories, which has an existing 16,000 square foot purpose-built concrete and steel facility, with a growing capacity of 1,000 kg of cannabis per year (net 333 kg per year to Invictus). As well, Invictus owns a third of AB Ventures, which is Phase 1 expansion towards a 21,000 square-foot facility, due for completion by the end of 2017.