UC Asset LP announced that the company has entered a MOU to acquire a 10,000 square foot cannabis cultivation property in the State of Oklahoma, through a non-cash acquisition and investment deal. Upon closing, UCASU will invest $1 million to build extra 5,000 square feet of cannabis cultivation facility on the same spot. The current operator on the property, Fire Ranch Farm, will continue to rent the property from UC Asset.

UC Asset expects to receive monthly rents representing a 14.4% cash on cash annual return. The lease is locked for 3 years, and monthly rent will increase by 5% every 24 months after the first 3 years. The non-cash acquisition will be done through the issuance of 2.5 million preferred shares of UC Asset to the current property owner.

Those preferred shares will have a fixed conversion rate of 1 to 1, which means that one preferred share may be converted into one common share, and one common share only, when conversion will be allowed in the future. Holder of the preferred shares will receive no dividends from UC Asset, unless those preferred shares are converted into common shares. Meanwhile, common share holders will continue to receive cash dividends, shall UC Asset decided to distribute any.

This 10,000 square foot cannabis property, according to Bankston, is built to the standard, with computerized and automatized environment control, and has the capacity to host full cycle cannabis production from creating clones/genetics to extracting cannabinoids.