Surna Cultivation Technologies Secures Letter of Intent from Greene Brothers Farm for a Potential $10 Million in Revenues

Rhea-AI Summary

CEA Industries Inc. (NASDAQ: CEAD, CEADW) announced a $1.2 million initial contract with Greene Brothers Farm for a multi-phase project in California. The project will develop a 26-acre indoor cannabis cultivation site, expected to generate approx. $10 million in revenue over 2-3 years. The first phase includes mechanical engineering services and is projected to be operational by Q4 2022. The Cannabis Park aims to create jobs and enhance community development. Phases 2 and 3 are targeted for completion in 2023, with further phases in 2024.

Positive

• Initial contract worth $1.2 million signed for phase one of a $10 million revenue project.
• Multi-phase project supports the growth of the indoor cannabis market.
• Partnership expected to create hundreds of jobs and contribute to community improvements.

Negative

• Forward-looking statements indicate potential uncertainties in project outcomes.
• Risks related to regulatory changes in the cannabis industry could impact business.

Agreement Includes Five Phases of Development with the First Phase Contract Signed for $1.2 Million

Louisville, Colorado, June 21, 2022 (GLOBE NEWSWIRE) -- CEA Industries Inc. (NASDAQ: CEAD, CEADW) (“CEA Industries” or the “Company”) subsidiary, Surna Cultivation Technologies LLC (“Surna”), a leader in controlled environment agriculture (CEA) systems engineering and technologies, today announced it has entered into a letter of intent to provide products and mechanical engineering services over five phases with Greene Brothers Farm, Inc., a family owned and operated farm that is developing a 26-acre site exclusively for indoor cannabis cultivation. CEA Industries anticipates contract revenues of approximately $10 million over an estimated two to three-year period. The initial contract, valued at $1.2 million, is for the first phase of products and services and is planned to be completed by early Q4 2022.

The project builds out a new all-indoor Cannabis Park, located in Lockeford, California, between Stockton and Sacramento, on a 26-acre property once used as a vineyard and wine distribution center. The Greene Brothers Farm Cannabis Park is an ambitious major expansion of the Greene Brothers’ operations that are currently located at a 200-acre farm in Mendocino County. The Cannabis Park will be the new headquarters for the Greene Brothers and will include cultivation, manufacturing, non-storefront retail sales and distribution. Once complete, the Cannabis Park will utilize 371,918 square feet of new structures.

“After a couple of years of planning and working with San Joaquin County, we are beyond excited to realize the dream that started back in 2020,” stated Aaron Greene, Co-Founder and CEO of Greene Brothers Farm, Inc. “We look forward to creating hundreds of jobs and funding various community improvements that will be enjoyed by our new neighbors with revenue generated from our Cannabis Park and Farmacy Phactory brands. We partnered with Surna because we know they can provide the outstanding engineering, design and equipment that we require in a quick and efficient manner throughout each phase of development.”

Phase 1 is estimated to be online by Q4 of this year. For this first phase, Surna will perform mechanical engineering services that will include the design of exhaust air filtration systems to eliminate odors as well as to provide climate controls systems, its EnviroPro™ air handling equipment and Surna by Anden dehumidifiers. Phases 2 and 3 are planned for completion in 2023, while phases 4 and 5 are planned for completion in 2024.

“We are proud to have been chosen by Greene Brothers Farm for this multi-million-dollar, multi-phase development project,” said Tony McDonald, Chairman and CEO of CEA Industries Inc. “We expect this to be a winning relationship for both of us and we will strive to make this Greene Brothers Farm Cannabis Park an exemplary representation of these types of projects for others in this industry.”

About CEA Industries Inc.
CEA Industries Inc. (www.ceaindustries.com), is home to industry leaders in controlled environment agriculture, with complementary and adjacent companies added to its portfolio when aligned with the company’s growth initiatives. As the global environment for indoor cultivation continues to grow, CEA Industries was formed to embrace companies that support these ecosystems.

Headquartered in Louisville, Colorado, CEA Industries knows that growth is a team sport. Through future partnerships and mergers and acquisitions, both financial and strategic, CEA Industries will continue its pursuit of companies that bring accretive value to its customers and investors.

About Surna Cultivation Technologies

Surna Cultivation Technologies (www.surna.com), is an industry leader in CEA facility design and technologies. We provide full-service licensed architectural and mechanical, electrical, and plumbing (MEP) engineering services, carefully curated HVACD equipment, proprietary controls systems, air sanitization, lighting, and benching and racking products. Our team of project managers, licensed professional architects and engineers, technology and horticulture specialists and systems integrations experts help our customers by precisely designing for their unique applications. Through our partnership with a certified service contractor network, we provide installation and maintenance services to assist in a smooth build-out and optimal facility performance. We have been providing solutions to indoor growers for over 15 years and have served over 800 cultivators with over 200 of them being large, commercial projects.

Headquartered in Louisville, Colorado, we leverage our experience in the industry to bring value-added solutions to our customers that help improve their overall crop quality and yield, optimize energy and water efficiency, and satisfy evolving state and local codes, permitting and regulatory requirements.

About Greene Brothers Farm, Inc.
Greene Brothers Farm has been a family owned and operated farm for over 22 years. Both Co-Founders, Aaron Greene and Mark Greene, have more than 25 years of experience in the cannabis industry including business development and management practices. Aaron has cultivated cannabis for over 25 years and has a deep understanding of design and large-scale production at cannabis facilities, as well as development of rare cultivars for specific indoor/outdoor greenhouse applications. Mark has also cultivated cannabis for over 25 years and has extensive knowledge in all aspects of cannabis cultivation and processing, including breeding, nutrient optimization, soil condition alignment, cultivar specific expertise, concentrate production and an all-around in-depth knowledge of the cannabis industry from seed to sale. With a depth of knowledge in all aspects of cannabis production, including engineering, facility design, plant management techniques within large-scale farming, as well as best practices in cannabis production and extraction, the Greene Brothers have worked together and applied this wealth of knowledge and expertise into Greene Brothers Farm, creating a successful cultivating, manufacturing, and marketing cannabis business.

Safe Harbor Statement

This press release contains statements of a forward-looking nature relating to future events. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect our current beliefs, and a number of important factors could cause actual results to differ materially from those expressed in this press release, including the factors set forth in “Risk Factors” set forth in our annual and quarterly reports filed with the Securities and Exchange Commission (“SEC”), and subsequent filings with the SEC. Please refer to our SEC filings for a more detailed discussion of the risks and uncertainties associated with our business, including but not limited to the risks and uncertainties associated with our business prospects and the prospects of our existing and prospective customers; the inherent uncertainty of product development; regulatory, legislative and judicial developments, especially those related to changes in, and the enforcement of, cannabis laws; increasing competitive pressures in our industry; and relationships with our customers and suppliers. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. The reference to CEA Industries Inc.’s website has been provided as a convenience, and the information contained on such website is not incorporated by reference into this press release.

Media Contact:
Jamie English
Vice President, Marketing Communications
jamie.english@surna.com
303.993.5271

Investor Contact:
Sean Mansouri, CFA
Elevate IR
info@ceaindustries.com

FAQ

What is the contract value for the first phase of the project between CEA Industries and Greene Brothers Farm?

The initial contract is valued at $1.2 million.

How much revenue is expected from the multi-phase project involving CEA Industries?

The project is anticipated to generate approximately $10 million over a two to three-year period.

When is the first phase of the Cannabis Park project expected to be operational?

Phase 1 is projected to be operational by early Q4 2022.

What are the anticipated completion years for all phases of the Cannabis Park project?

Phases 2 and 3 are planned for completion in 2023, while phases 4 and 5 are scheduled for 2024.