A little over two years after coming together in a reverse takeover, cannabis grower Zenabis and Langley-based greenhouse operation Bevo are going their separate ways.
A press release by Zenabis on Jan. 4 said that the company had entered into an agreement with Langley Propagation and Floral Company that included selling all of Zenabis’s shares in its subsidiary, Bevo Farms.
The deal with Langley Propagation includes funding for some of Zenabis’s liabilities and a guarantee for Bevo’s existing debt by Langley Propagation.
Rent amounts Zenabis owes to Bevo will also be reduced significantly.
The upshot of the deal, according to Zenabis, is that it will keep its core business of cannabis production, while disposing of Bevo’s plant propagating business. Bevo has long been primarily in the business of starting seedlings for other growers, including peppers, tomatoes, cucumbers, lettuce, and flowers.
Zenabis’s Langley operation, a sizable greenhouse-based premises off Glover Road in the Milner area, will continue. Bevo owns the facility and leases it to Zenabis.
Finally, it will improve Zenabis’s financial position and significantly reduce the amount of debt it owes. Zenabis will functionally reduce its debt load by $42.5 million, according to the announcement.
Bevo and Zenabis went into business together in 2018, when Sun Pharm Investments, a medical marijuana firm, reinvented itself as Zenabis to take advantage of cannabis legalization.
Bevo continued its business of propagating hothouse vegetables and flowers while building out more greenhouse space for cannabis, and even experimenting with vertical farming of hemp.