Cannabis company Liberty Healthy Science ($LHS) announced it sold a marijuana farm called Chestnut Hill Farm in Alachau, Florida last week in an arms length transaction for US $ 14.7 million. The sale also included dispensary license rights in Ohio under the name Mad River Remedies. A review of land transfer records in Florida shows the transaction appears to be more of a friendly party transaction between Michael Serruya and his investing partners the Schottensteins who are the original backers of another cannabis company called Green Growth Brands $GGB).
According to people familiar with the company Michael Serruya controls a company named DFMMJ Investments. DFMMJ Investments does business as Liberty Health Science. The quit claim deed filed August 19, 2019 shows the land was transferred from DFMMJ to Schottenstein Property for the price of $10. It’s possible the parties will update the land records in a few weeks with the real price consideration as we have seen in the past.
Liberty Health Science said in its Form 10 filed with the CSE that:
With respect to each of the Florida Property and the Ohio Assets, the Issuer considered additional offers for each, as well as conducting an internal analysis in respect of the Ohio Assets.
Why use an independent analysis when it’s just investing partners selling assets to each other right? Except $LHS main street shareholders might have wanted a 3rd party view on how much these cannabis assets are worth.
The Schottensteins partnered up with Serruya, Andy Defrancesco (via his wife Catherine’s name), and Barry Honig when they applied for and won dispensary licenses in Ohio. The Ohio application with investor’s names can be seen here.
Liberty Health science didn’t name who the marijuana farm was sold to in their press release.
Green Growth Brands also announced a large ticket price deal for a Florida medical marijuana license recently. They bought Spring Oaks Greenhouses for $54.65 million in a stock and cash. Apparently, the deal needs land to cultivate the marijuana thus making Chestnut Hill with 36-acres of land and a grow space of 21,600 square feet the perfect fit, according to a person familiar with the planned transaction. For now it will be a wait and see for how much the Schottenstein family sells or leases Green Growth Brands ($GGB) the land. Green Growth Brands hasn’t made any public announcements about a deal yet.
UPDATE 8-27-19: It appears someone who knows how Andy Defrancesco and the Serruya’s work behind the scenes to make money at the expense of retail investors has deiced to open the kimono. This is a good detailed analysis tracking how the group came up with $40 million to buy Chestnut hill in 2017. Along with an explanation of how Team Defrancesco got very cheap shares of Liberty Health Science.
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