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Monday, April 19, 2021

A Close Look at CGrowth Capital Inc (OTCMKTS:CGRA)

CGrowth Capital Inc (OTCMKTS:CGRA) has had several months that Investors would love to forget dropping steadily and nearing all-time lows of $0.0009

CGRA was trading for as low as $0.0009 in recent months but that all changed in April when the Company announced the execution of a LOI with Wildfire Cannabis Company, LLC to lease a portion of their properties in Chewelah, Washington to grow pot.

CGrowth Capital Inc (OTCMKTS:CGRA) has traditionally billed itself as a holding company for businesses and assets focused on all aspects of mining, minerals, exploration, and commercial real estate.

The Company owns approximately 47 net acres of industrial land property as well as over 1000 acres of mineral rights & leases located in Stevens County, Washington. Recently CGRA has begun to strategically leverage assets for maximum value within the legally developing cannabis industry currently underway in Washington State.

Back in April CGRA announced the execution of a Letter of Intent (LOI) with Wildfire Cannabis Company, LLC to lease a portion of our properties in Chewelah, Washington. Wildfire Cannabis Company, LLC holds a Tier 3 Producer / Processor License in Washington State.

As a licensed Tier 3 marijuana producer and licensed processor, Wildfire Cannabis Company is currently qualified to manage between 10,000 square feet to 30,000 square feet of marijuana plant production, as well as additional processing within Washington State (the largest available license). A marijuana producer license allows the licensee to produce, harvest, trim, dry, cure, and package marijuana into lots for sale at wholesale to marijuana processor licensees and to other marijuana producer licensees.

CEO Bill Wright said at the time “We view corporations like Wildfire Cannabis Company as some of the highest value tenants currently available in the state. By restructuring the leases on our properties, and extending them to legally operating cannabis companies, we believe we can maximize lease rates, profits, and in turn shareholder value.”

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Also in April CGRA said it had received an initial thumbs up on the Company owned site location and indicated that “(they) may proceed with (the) location.” Additionally, the Lessee has scheduled its interview with the LCB to further review the site and license on May 1, 2015. The initial information from the LCB is a positive response for the Company, knowing that the site can support the current group and additional operations. Per Washington statutes, a property can host up to three Tier 3 marijuana operations.

On August 12 CGRA updated shareholders on progress made towards its first turnkey lease to a cannabis producer in Washington State. As previously announced, the Lessee has completed its initial interviews and approvals with the Washington State Liquor Control Board, paving the way for the future site.

The Company has followed this up with preliminary approval from Stevens County for the placement of the facility, and is now preparing for formal permit and site development submission. The Company has budgeted up to $1m for the complete buildout and remodel and is working with investors and lenders to arrive at acceptable financing terms.

Recent changes in the recreational cannabis space in Washington State continue to improve the feasibility of the project. The state enacted changes to its tax structure in July of this year which eliminated the multi-tier tax structure on the producer and processor, and has now shifted to a flat tax at the retail sale only.

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Currently trading at a $500,000 market valuation CGRA has minimal cash or revenues and rising short term debt that can and will lead to dilution. The stock saw a big move up earlier this year after the Company announced a Lease Agreement with Wildfire Cannabis Company, a licensed Tier 3 marijuana producer but has come back down since. We will be updating on CGRA when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with CGRA.

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Disclosure: we hold no position in CGRA either long or short and we have not been compensated for this article.

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