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TPCO Holding Corp. (OTCQX:GRAMF) (NEO:GRAM) has completed the divesture of its wholesale extraction division, SISU Extraction, LLC. The decision to divest SISU was driven by the company's previously announced cost savings initiatives, which are focused on reducing costs, driving efficiencies, and accelerating its path to sustainable, long-term profitability.
The agreement will ensure ongoing service for existing clients as well as continuation of employment for SISU employees, while avoiding any potential shut down related expenses to the company. In addition, under the terms the of agreement the purchaser has agreed to enter into a multi-year strategic supply agreement for both cannabis oil and flower brokerage services. Financial terms of the agreement have not been disclosed.
"We are committed to making the difficult choices that are necessary for us to emerge as the leader in the California cannabis market," stated Troy Datcher, CEO, and chairman of The Parent Company. "Given the underperforming wholesale market, this decision will allow us to focus on our profitable omni-channel retail business and brand-building activities closer to the consumer experience, while preserving our balance sheet and avoiding any additional costs related to potentially shutting down our wholesale extraction division.
Datcher continued, "It was important we identified a buyer that would continue operations not only so we could establish a strategic supply relationship, but also to ensure that the good people at SISU would remain employed during challenging economic times. SISU is an important part of the California cannabis community and I look forward to continuing to work with the SISU team to deliver innovative and high-quality products for our consumers."
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