The company is looking to sell its CBD products in the emerging Mexican cannabis market.
Joint Venture to Build CBD Facility
Cannamerica has entered into a letter of intent to create a joint venture with Sericea Labs S.A. de C.V. and CBDistribution Company Ltd.
They will work to build a facility in Mexico for importing and warehousing licensed CBD products as well as CBD oils and tinctures destined for refining.
Subject to Mexican laws, the parties also plan to acquire, import and cultivate industrial hemp biomass for extraction into CBD isolate to be used for multiple product lines which utilize CBD.
Subject to board approval from Cannamerica Brands and completion of satisfactory due diligence, the parties intend to enter into a definitive joint venture agreement on or before April 30.
Under the intent letter, 40% of the JV shares will go to SERICEA in exchange for performing all necessary steps in obtaining the applicable licenses in Mexico.
Whereas, CANA will get 40% of shares in exchange for contributing operational expertise, sourcing the property, providing equipment for refining and extracting product, providing exclusive licenses for products destined to the Mexican market and establishing a written intellectual property licensing agreement of use exclusive to the JV for all current and future technology for oil extraction within the country of Mexico.
Further, the remaining 20% shares will be offered to CBDC in exchange for sourcing of hemp biomass, branding, marketing and the sale of the finished product, including but not limited to CBD isolate in bulk.