City of Powell River has approved the sale of the former Catalyst Paper Corporation administration building that was leased to Santé Veritas Therapeutics Inc. (SVT) for a new craft cannabis production company.
After an in camera session at the June 18 city council meeting, mayor Dave Formosa, during a rise and report, announced a contract of purchase and sale with Meridian 125 W Cultivation Ltd.
“Council has approved a contract of purchase and sale with Meridian 125 W Cultivation Ltd. for the building and an approximately one-acre portion for the purposes of licensing and operating a craft cannabis operation,” said Formosa. “These properties are more commonly referred to as the former Catalyst administration building and parking lot that are currently being leased by Santé Veritas.”
Formosa said the agreed price for the property is $900,000 and includes several conditions. One is that the city and Santé Veritas mutually agree to terminate the current lease-to-purchase agreement for the property. Another condition is the successful subdivision of the property at the expense of the purchaser.
The agreement further states that the city secure the first right of refusal to purchase the property back for the original $900,000 price plus the cost of any new capital improvements to the property. Title has to be cleared of all charges and the purchaser has executed an agreement to acquire certain assets on the property related to cannabis production from the current tenant.
Formosa said unless both parties agree to an extension, all conditions of the agreement are to be removed by September 30 and the sale is set to complete on or before November 30.
“This deal is about generating new investment in the community and creating good-paying jobs to ensure our economy continues to grow,” stated Formosa in a media release. “Council is impressed with Meridian’s plans for the facility and its senior management team, which has been involved in building successful operations in other parts of the province and the country.”
Formosa stated that SVT had invested close to $13 million in establishing a cannabis operation on the property, but after a change in ownership and shifts in the marketplace, the new US-based owners were not interested in operating a production facility in Canada.
“The cannabis market has changed,” stated Formosa. "The focus is now on producing high-quality product rather than quantity. That’s Meridian’s business plan. They will invest in bringing the facility up to Health Canada standards for licensing a craft operation that could eventually employ up to 100 people.”