Adam JacksonOregon-based producer Grown Rogue International Inc. (CSE: GRIN) (OTC: GRUSF) has partnered with EBC Ventures to enter the Illinois cannabis market, the company announced Monday.
The joint venture, named Rogue EBC, LLC, will focus on cultivating and manufacturing cannabis products to meet growing demand in Illinois, marking Grown Rogue’s expansion beyond New Jersey.
“We have been watching the Illinois market develop and believe this partnership represents a compelling opportunity to deliver great returns on our invested capital while enhancing the overall market for Illinois cannabis consumers,” CEO Obie Strickler said in a statement.
“The Illinois market is particularly attractive to us as we believe there is pent up demand for craft-quality flower at accessible price points.
Under the agreement, Rogue EBC has acquired CannEquality, LLC, which holds a craft grower’s license from the Illinois Department of Agriculture. This acquisition, still pending regulatory approval, would enable the venture to start cannabis cultivation and production operations in the state.
Rogue EBC has also confirmed the leasing of a facility in Waukegan, Illinois, projecting to outfit approximately 14,000 square feet for cannabis cultivation along with additional space for manufacturing. The expected completion of the facility is set for the first half of 2025, with the inaugural harvest anticipated in the latter half of the year.
Grown Rogue will control a 70% interest in Rogue EBC and plans to invest up to $6 million in the venture. The company also holds options to eventually acquire full ownership.
Strickler emphasized the Illinois market’s untapped demand for craft-quality cannabis and the strategic location of the new facility.
“The manufacturing segment is another example of us looking to broaden our scope within the industry, while staying laser focused on producing high-quality, craft cannabis that delights our consumers,” Strickler added.
“This will largely be funded by cash on hand and the cash we anticipate receiving with the recent warrant acceleration announcement. The warrants are held by a small group of investors, and we expect most or all the eligible warrants to be exercised and lead to maximum proceeds for the company of $4.7 million.”
