Delta 9 Bio-Tech has a binding agreement in place and is on track to obtain a public listing for its shares by the fall.
The Winnipeg licensed medical marijuana producer is in the process of organizing a reverse takeover of a Vancouver shell company called SVT Capital Corp.
It has closed a $3-million convertible debenture offering in a private placement and the company expects to raise an additional $3 million to $4 million around the time its shares are publicly listed.
The private placement valued the company at about $40 million.
The new entity created by the reverse takeover, which will remain a Winnipeg company, is to be called Delta 9 Cannabis Inc.
SVT Capital will be able to appoint one person to the board and the current Delta 9 entity will appoint four.
John Arbuthnot, who founded the company in partnership with his father, Bill Arbuthnot, said the goal is gain access to capital markets to be able to better fund growth.
"We want to broaden our investor base both with more retail investors as well as with more conventional institutional investors," he said. "Also having investors with more long-term vision toward the sector’s development will put us in a good spot."
When it opened in 2014, Delta 9 was one of the first cohort of 13 medical marijuana producers licensed by Health Canada.
(There are now 45 across the country, including another Winnipeg producer recently licensed called Bonify.)
Its modest 14,000 square feet of production space has grown rapidly.
A newly instituted hydroponic growing system in purpose-built shipping containers is expanding at the rate of up to 80 containers over the next year.
With the ability to stack the containers, its current facility has the capacity to expand to about 150,000 sq. ft. of production space.
Delta 9 is projected to do about $1.7 million in sales this year from a patient list of about 1,500 people.
The company will open its first retail clinic in an Osborne Village location in the next month.
Delta 9, like all the other medical marijuana producers, is positioning itself for federal legislation that will make the sale and use of recreational marijuana legal by next summer.