AgriCann Solutions Corp. has signed a letter of intent (LOI) with CannaHoldCo (CHC) for a proposed deal to acquire an FDA-approved organic rapid dehydration biotechnology for cannabis with GRAS status, or generally recognized as safe.
Under the deal, AgriCann would acquire the exclusive, royalty-free license to use, advertise, market, sell, and distribute, on a worldwide basis – excluding the United States of America. The LOI outlines the general terms and conditions of the proposed deal.
CannaHoldCo’s product is designed for agricultural applications for dehydrating large volume produce crops.
How It Works
The product is applied as a spray or via submersion of freshly harvested biomass. When mixed with water, the powder creates a semi-permeable membrane around the biomass. During the dehydration process, this semi-permeability allows H2O moisture molecules to escape, while retaining the cannabinoids and terpenes. The result is a significantly shorter drying time than experienced with conventional methods.
This biotechnology also provides a protective barrier against mold and mildew during drying/curing and significantly increases shelf-life.
“This is next-generation cannabis drying and preservation technology – ideal support for exporting top-tier product to overseas markets, as well as complementing domestic connoisseur demand with new economies of scale. By lowering operating expenses associated with drying by up to 80%, dramatically reducing the carbon footprint, and mitigating product loss due to spoilage by 30% or more, cultivator and distributor margins are significantly enhanced,” AgriCann CEO Rob van Santen stated.
CHC grants AgriCann an exclusive, royalty-free, fully paid-up license to use and sell the product that reduces the drying and curing process of cannabis.
The license is on a worldwide basis specifically excluding the U.S. which CHC retains. CHC will provide AgriCann with all technical data, know-how and trade secrets relating to the Product as held by CHC.
As consideration for the license, AgriCann will issue to CHC a total of 23,152,718 common shares, subject to certain conditions.
AgriCann will provide a total of US$1.0 million in cash payments to CHC pursuant to a monthly payment schedule calling for 12 equal payments and in accordance with a joint-use of proceeds budget to be agreed between the parties.
The deal is expected to close on or prior to March 31, 2020.