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VANCOUVER, Jan. 7, 2019 /CNW/ – CANNAMERICA BRANDS CORP. (“CannAmerica” or the “Company”) (CSE: CANA) (OTCQB: CNNXF) is pleased to announce that it has entered into a binding letter of intent (“LOI”) to create a joint venture with Invictus MD Stategies Corp. (“Invictus”) (TSXV: GENE; OTCQX: IVITF; FRA: 8IS1) and CBDistribution Company Ltd. (“CBDC”) with the intention of acquiring hemp biomass for extraction into CBD isolate using purpose-built facilities for large scale CBD extraction.
In December 2018, President Trump signed the $867 billion Farm Bill which recharacterized hemp from a schedule 1 drug with high potential for abuse to the lowest-level listed drug (schedule 5) which includes small doses of medicines such as codeine. This allows for mass hemp production in the United States that is federally legal and the ability to move hemp across state lines. Hemp is defined in the United States as cannabis with less than 0.3% THC. CBD, a non-psychoactive cannabinoid found in cannabis, has had a surge in popularity over the past couple of years based on its a huge range of potential health benefits and uses.
Subject to Board approval from Invictus and completion of satisfactory due diligence, the parties intend to enter into a definitive joint venture agreement on or before January 31, 2019. Each of the parties will receive a one-third share of the joint venture in exchange for their respective contribution:
|1)||Invictus will contribute a line of credit (“LOC”) in the amount of $5 million CAD which will be used to acquire extraction equipment, build out infrastructure and fund working capital. The LOC will be secured by a general security agreement over the joint venture and will bear interest at a rate of 5% per annum;|
|2)||CannAmerica is a pioneer in the science of cannabis extraction and post processing, precision dosing of product, and formulation of concentrates and oil-based vaporization products. The Company had sold more than 14 million cannabis infused gummies in the states of Colorado and Nevada, and will contribute operational expertise, will source the property, extraction equipment, staffing and manage operations; and,|
|3)||CBDC will contribute the sourcing of Hemp Biomass procurement, branding, marketing and the commercialization of the finished product, including but not limited to CBD Isolate.|
“We are thrilled to partner with CannAmerica and CBDC to extract and supply CBD to the US market. This partnership represents a great opportunity to continue expanding our footprint beyond Canada and capitalize on the United States’ federal legal framework that is now in place to produce and sell CBD,” said George E. Kveton, CEO of Invictus.
“This is a significant partnership for CannAmerica with world class partners. This joint venture accelerates the Company’s long planned growth into the Hemp-based CBD market following the passing of the Farm Bill, with extraordinary opportunities for expansion into new markets” said Dan Anglin, CEO and Co-Founder of CannAmerica.