[PRESS RELEASE] – MEDFORD, Ore., March 12, 2026 – Grown Rogue International Inc., a flower-forward cannabis company combining craft values with disciplined execution, announced that on March 11, 2026, it entered into a series of definitive agreements with its affiliate, Grown Rogue Management Associates (GRMA) and Sea Craft LLC to operate a cannabis production facility in Dwight, Ill., formerly operated by PharmaCann Inc. The facility is owned by Innovative Industrial Properties Inc. (IIP).
Subject to approval by the Illinois Department of Agriculture, SEA Craft expects to commence operations in the second quarter of 2026, bringing jobs back to the Dwight community, with product availability targeted for the fourth quarter of 2026.
All dollar amounts are in U.S. dollars unless otherwise stated.
Transaction Highlights
- GRMA (80% owned by the Grown Rogue) is acquiring a 49% interest in SEA Craft, the holder of an Illinois craft grow license and an existing cash balance of $1 million, with an option to acquire the remaining 51% subject to regulatory and performance-based considerations.
- SEA Craft entered into a lease for a fully constructed cultivation and processing facility totaling 66,000 square feet, including approximately 10,000 square feet of existing indoor flowering canopy, with capacity to expand to the 14,000 square feet ultimately permitted under the craft grow license, and dedicated post-harvest, processing and manufacturing infrastructure.
- GRMA completed a $3 million preferred equity investment to support SEA Craft's projected capital needs.
"We are excited to enter the Illinois adult-use market in a highly capital-efficient way," Grown Rogue CEO Obie Strickler said. "Based on our experience in New Jersey and our current budget in Minnesota for Phase I new-build market entries, we have typically planned for approximately $10 million or more of upfront capital, including working capital, and roughly a year of construction before we can take occupancy and begin growing flower. By stepping into the lease of an existing facility and planning for modest upgrades, we believe that we cut the cost and time to market by more than 60% compared to one of our new-build projects, to less than $4 million and under nine months, respectively, assuming normal timelines for regulatory approvals.
“We anticipate similar revenue and profit potential with this approach, which would then translate into improved return on invested capital. We also believe it provides a practical framework for evaluating additional distressed and turnkey opportunities in the future, as we seek opportunities to apply our capabilities and build our platform. I've particularly enjoyed seeing our operations team respond to this opportunity with the enthusiasm required to deliver on our quality and efficiency standards. With $4 million of project capital, we are fortunate to be entering Illinois with the pre-funded balance sheet to expand the facility at the right time."
Grown Rogue Chief Strategy Officer Josh Rosen said, "As discussed on our last few earnings calls, we view the current industry distress, as demonstrated by many announced restructurings over the past year, as an additional pipeline for future growth. We believe our team is well-positioned to step into underutilized cultivation assets and leverage our disciplined, low-cost approach to generate meaningful returns. For example, our second indoor facility in Oregon, acquired from Acreage Holdings in 2020, now produces more than 650 pounds monthly of craft-quality flower, greater than five times the volume of when we took it over.
“While not all opportunities will deliver improvements of that magnitude, we feel strongly that we can continue to identify distressed opportunities and that our team can quickly and efficiently implement Grown Rogue's best practices to improve yields, reduce costs, transform underperforming assets into strong additions to our platform, and, most importantly, pursue our goal to bring great product at a great price to more consumers across the U.S."
GRMA acquired 49% of SEA Craft, including its craft grow license and cash, for initial consideration of $1 million, satisfied by the issuance of a seller's note with a two-year term bearing interest at 10% per annum. GRMA also has an option to acquire the remaining 51% interest in SEA Craft for a performance-based variable payment of between $250,000 and $1 million.
To support projected capital needs, including the eventual expansion to 14,000 square feet of indoor canopy and the measured product expansion into infused categories, GRMA completed a project financing in the form of a $3 million preferred equity investment for a 20% interest in GRMA with a preferred dividend of 15%. At the preferred equity investors' discretion, for a period of up to three years, the preferred units may be converted into subordinate voting shares of Grown Rogue at a conversion price of $0.65 per share (approximately 100% higher than the company's stock price when the agreement was executed).
Together, SEA Craft's existing $1 million cash balance and GRMA's $3 million preferred equity financing provide approximately $4 million of total project capital to support the Illinois launch, working capital needs and related initiatives.
In conjunction with the transaction, SEA Craft entered into a lease agreement with IIP for the facility. The facility was operational until December 2025 and remains in good condition. Grown Rogue believes it can be reactivated with modest incremental capital investment, subject to regulatory approvals and readiness activities. The leased site totals approximately 66,000 square feet, including a 43,000-square-foot industrial building and an adjacent 23,000-square-foot greenhouse that is not currently planned to be utilized.
