Hero Technologies HENC, a cannabis company focused on a seed-to- sale vertical integration strategy, has completed a real estate purchase agreement for a 10 acre property in Vassar, Michigan. The purchase price is $600,000.
The company plans to use the property as a base of its operations of cannabis in the state, including indoor and outdoor growing, processing, wholesaling, and selling directly to consumers. The property is zoned for use of cannabis. The purchase is expected to close in October or November of 2022. Closing is conditional upon obtaining cannabis licenses from the Vassar Township, signing a land contract and completing the down payment. The company paid $10,000 upon signing the purchase agreement as an earnest money deposit.
The company signed a binding term sheet for a land contract that will finance the purchase. The seller, Vassar Enterprises LLC, will receive $75,000 as a down payment, a 4.75% interest rate, low monthly installment payments for three years, and a principal balance payoff five years from the date of the final contract. The company would have the right to prepay any or all of the principal. The purchase was directly negotiated with no broker fees between Vassar Enterprises and the company.
The company would receive any and all existing environmental reports relating to the property as part of its purchase. The seller stated in the purchase agreement that the property has no known environmental issues.
Blackbox will be leased by Hero Technologies. BlackBox Systems and Technologies LLC, the subsidiary of Hero Technologies in Michigan, projects rapid growth after establishing operations in Vassar. BlackBox has already secured pre-qualification approval for adult recreational and medicinal use cannabis licenses in Michigan. The company focuses on greenhouses that use a proprietary aeroponic growing system and advanced quality and safety controls to produce high-yield, quality cannabis. The company expects to sell its cannabis products through wholesale and retail channels.
The Hero Technologies CEO Gina Serkasevich said we are delighted to report this important milestone in our company's history. According to data from the Michigan Marijuana Regulatory Agency, legal cannabis sales are expected to increase as much as 55% in 2022 to $2.8 billion. We have made progress in planning to deploy our proprietary cannabis cultivation system because of our state licensing pre-approval. We think the company is well positioned to capitalize on the booming Michigan cannabis market and generate a well-deserved return for investors.