The trio of companies will buy up to C$5 million of Thomas Elcome’s hemp crop for five years starting in 2019
Canntab Therapeutics Limited () announced Thursday that it has entered into a supply and loan agreement with Inc () (OTCQB: FSDDF) and World Class Extractions Inc to purchase hemp flower from supplier Thomas Elcome who is the president of 10975443 Canada Inc.
According to the pact, the purchasers will have the right to buy up to C$5 million of the supplier’s hemp crop for five years starting in 2019 at C$100 per kg per 1% of Cannabidiol (CBD) extracted from the flower.
On February 12, Canntab said the three companies will buy 1,000 kg of Thomas Elcome’s 2018 hemp crop at a purchase price of $100,000 per kg per 1% of CBD extracted from the flower.
The trio will also process Elcome’s 2019-2024 organic hemp flower crop into gel capsules and tablets at FSD’s facility in Cobourg, Ontario, which is currently being transformed into a large hydroponic indoor cannabis production and processing facility.
The purchase price for the 2019 crop is pegged at C$1 million, not including taxes. Of this sum, C$500,000 will be paid by the purchasers as a loan to the supplier in the form of equipment to be paid back in the form of hemp.
“This latest supply agreement will provide us with a significant amount of CBD oil over the next five years, which is required to manufacture our extensive suite of products for sale upon approval by Health Canada,” said Canntab Therapeutics CEO Jeffrey Renwick in a statement.
READ: Canntab Therapeutics Ltd and FSD Pharma forge pact with World Class Extractions for hemp deal
The company is planning to conduct clinical trials with leading orthopaedic surgeon Dr Don Garbuz, as lead investigator to determine the potency of Canntab’s products in treating pain. The study will look at the use of Canntab tablets to treat pain after knee replacement surgery.
“This will include Canntab’s bi-layered hard pill consisting of both instant and extended release to be used in clinical trials to be conducted by Dr Garbuz, subject to approval by the University of British Columbia Research Ethics Board,” said Renwick.
Canntab Therapeutics, based in Markham, Ontario, specializes in the research and development of pharmaceutical-grade formulations of cannabinoids.
Meanwhile, said it intended “to take full advantage” of the option to purchase the maximum amount of organic hemp from Elcome over the next five years starting with buying C$1 million of organic hemp in 2019.
“The hemp industry is expanding at an incredible rate and is expected to grow into a multi-billion dollar industry in North America,” said FSD Pharma interim CEO Dr Raza Bokhari. “Our processing license received last week, allows FSD to work with Canntab and World Class to process the hemp product into CBD oil, a significant saleable product that can be converted into gel capsules and tablets. Once the edibles legislation is in place later this year in Canada, FSD will be ready to process and supply the market.”
FSD Pharma is headquartered at the former Kraft plant in Cobourg, Ontario, about an hour's drive from Toronto, in a mammoth facility that sits on 72 acres of land, with 40 primed for development. The company is capitalizing on the need for indoor-grown, pharmaceutical-grade cannabis.
World Class Extractions CEO Michael McCombie, hailed the deal saying the company’s proprietary extraction technology is suited to process large hemp harvests into full spectrum oil. “We are preparing for the next stage of growth for our company as we await approval for our CSE listing,” McCombie.
“This supply and loan agreement signed with FSD, Canntab and World Class extends our relationship over several years,” said Thomas Elcome, president of 10975443 Canada Inc. “Our company looks forward to providing the highest-quality hemp.”
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