Phoenix, Arizona-based TILT Holdings is partnering with Long Island, New York’s Shinnecock Indian Nation to establish vertical cannabis operations on their tribal territory in the Hamptons. Through a joint venture with the Nation’s cannabis project development firm, Conor Green, TILT will finance, build, and provide management services for the cannabis operations of the Nation’s wholly-owned cannabis business, Little Beach Harvest.
Chenae Bullock, member of the Shinnecock Nation and Managing Director of Little Beach Harvest, called the deal a “momentous opportunity” for the Nation.
“As the wealth gap in the U.S. has grown wider and wider, it is economic development opportunities like this that will help our tribe bridge the gap. Through our partnership with TILT, we will not only create dozens of jobs and jump start careers, but will also cultivate business relationships with other tribal business owners, generating growth for Indigenous communities.”—Bullock in a press release
Gary Santo, CEO of TILT Holdings, noted that “to date, Indigenous people have been largely excluded from the social equity conversation across the country.”
“This partnership—which is a true partnership in every sense—is a step forward in creating social equity for the Nation,” he said in a statement. “We believe our expertise in cannabis operations along with Shinnecock’s thought-leadership and cultural connection to plant medicine will deliver economic growth for the region while cementing the Nation as a leader in cannabis operations among Indigenous communities.”
As part of the deal, a TILT subsidiary has purchased 100% of the Class A membership interests of Standard Farms New York, LLC which will hold a 75% interest in a joint venture with Conor Green for approximately $700,000, in cash and stock, with up to $2.65 million to be paid in additional shares priced at the time of closing, to be issued upon achievement of certain milestones, including the commencement of retail and wholesale cannabis sales, the companies said.
TILT will provide management services to Little Beach Harvest for the development of the facilities, including planning, design, and funding of up to about $18 million in capital expenditures in order to provide a fully vertical cannabis operation. The 9% debt financing TILT provides is repaid through monthly cash flows and is secured by the project assets which will include a 60,000 square-foot cultivation, processing, extraction, and packaging facility; a two-story dispensary with a drive-thru; and an adjacent wellness lounge.
In exchange for providing management services, Standard Farms receives 11.25% of the Nation’s gross revenue as well as 18.75% of free cash flows from all Shinnecock cannabis operations during the initial term of up to nine years. The management agreement may be extended up to 10 additional years, pending the accomplishment of certain performance-based milestones related to revenue and profitability.
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