Revolution Global announced Tuesday it will double the capacity of its Delavan cannabis cultivation facility using $28.75 million in capital expansion funds from a Nevada-based real estate startup.
Revolution currently operates a 75,000 square foot cultivation facility in southern Tazewell County. Over the next nine to 12 months, the company will build a second 75,000 square foot facility and more greenhouse space.
Rent will accrue to the real estate company, Freehold Properties, during the construction period. The agreement gives Freehold the option to purchase all the existing properties for $30 million by March 2021.
"Revolution is thrilled to be working with Freehold on the next phase of our Delavan expansion. As the Illinois cannabis sector feverishly prepares for adult-use, Revolution sees enormous potential to grow and lead in an exploding industry," said Revolution CEO Mark de Souza in a written statement. "With expertise in cannabis and agriculture and an understanding of the unique needs of companies operating in the sector, Freehold is uniquely qualified to partner with Revolution. We are grateful for their support and belief in Revolution and its mission."
"Revolution's state-of-the-art Delavan facility is among the largest producers of medical cannabis in Illinois. With adult-use recreational sales beginning in January 2020, we believe Illinois's cannabis sector is poised for exponential growth," said Don Brain, co-founder and CEO of Freehold Properties. "Revolution's integrated multi-state platform positions them to thrive in Illinois, while the recent addition of Florida and negotiations to expand into other states further diversifies their growth. The financing we provided is tailored to their growth needs and provides Freehold access to a proven multi-state operator in a highly coveted market."
Freehold booted up in August with the $28.3 million purchase of six cannabis-related properties from Curaleaf in Florida, Massachusetts and New Jersey.
It works as a mechanism to provide capital to cannabis companies, which cannot work through the traditional banking system due to marijuana's status as an illegal drug under federal law. Freehold is leasing the buildings back to Curaleaf. The company is zeroing in on cannabis businesses.