Item 8.01. Other Events -
Update Regarding Marengo Township, Michigan Greenhouse Cultivation Facility
Millennium Sustainable Ventures Corp (ticker: MILC), through its wholly owned
subsidiary Marengo Cannabis LLC ("Marengo Cannabis"), leases from PW MI CanRE
Marengo LLC ("PW Marengo") which is a wholly owned subsidiary of Power REIT
(ticker: PW), a 550,000 square foot high-tech greenhouse located in Marengo
Township, Michigan (the "Property"). MILC believes that pending license
approval, the Property will be the largest cannabis cultivation facility in
Michigan and one of the largest greenhouse cannabis cultivation facilities in
the United States. MILC also believes that the scale this of the facility and
the fact that it is a greenhouse will position Marengo Cannabis to compete
favorably as a low-cost producer of high-quality cannabis. This is especially
important as prices for cannabis in most markets have compressed recently.
As part of securing cannabis licenses from the Michigan Cannabis Regulatory
Agency ("CRA"), a Certificate of Occupancy ("CO") must be submitted where
applicable. Pursuant to the Marengo Township zoning map, the Property is zoned
Agricultural and was given a Marijuana Overlay, which according to the Marengo
Township Ordinance does not change the underlying zoning. As such, the Property
does not require a CO and the CRA agreed in writing to accept a simple two
sentence letter (the "CO Letter") as an alternative to providing a CO. PW
Marengo, pursued the agreed upon CO Letter from Marengo Township which was
initially unwilling to cooperate which ultimately led PW Marengo to initiate
litigations against Marengo Township.
On July 8, 2022, PW Marengo ultimately secured the CO Letter from Marengo
Township confirming that the property is currently zoned Agricultural and does
not need a CO. The CO Letter is in the form that the CRA previously agreed to
accept. Based on the receipt of the CO Letter, the complete licensing
application has now been submitted to the CRA. While the submission of the of
the licensing application to CRA has been significantly delayed due to the
issues with Marengo Township, we have now overcome a significant hurdle in the
licensing process. Nevertheless, there is no certainty as to the ability to
ultimately secure the licenses from the CRA as well as how long the process will
take which will allow us tocommence operations.
As previously announced, PW Marengo amended the lease with Marengo Cannabis, to
push out rent to Q1 2023 to reflect the uncertainty around the timing of
licensing.
In terms of the Michigan cannabis market, wholesale prices to date do not appear
to have compressed as significantly as other states such as California,
Colorado, and Oklahoma. We continue to believe that the Property was acquiredat
an attractive basis and that, once fully operational, Marengo Cannabis can be a
high quality, low-cost producer in the developing Michigan market.
© Edgar Online, source Glimpses