FSD Pharma (CSE: HUGE) (OTCQB: FSDDF) made a $1.5-million investment in Pharmastrip Corp. and inked an agreement with the company as part of its plans to produce cannabis products.
Under the terms of the agreement, FSD will install Pharmastrip equipment at its facility in Cobourg, Ontario. The company will use the equipment to manufacture organic medical cannabis-infused in oral thin film strips. As part of the deal, Pharmastrip will grant FSD an exclusive license to manufacture and sell the oral thin film strips in Canada.
Before starting production, FSD needs all approvals and licenses required under the Access to Cannabis for Medical Purposes Regulations. The company will submit an application to Health Canada in order to obtain the license to produce and sell the products.
Under the agreement, FSD will share profits from the sale of oral thin film strips. FSD will be responsible for all costs, expenses and fees payable to complete and submit the application. But, as part of the deal, profits from the sale of the products will be shared equally by both companies.
Calling it a “strategic investment,” FSD Founder and President Zeeshan Saeed said in prepared remarks said they made the deal with Pharmastrip because they see the potential “in alternative delivery methods for cannabis, such as Pharmastrip’s oral thin strips.”
We expect the demand for alternative delivery methods for both THC and CBD to increase as the market continues to develop. We are excited to install Pharmastrip’s proprietary equipment under this collaboration agreement at our Cobourg plant and look forward to beginning production once the necessary license has been granted,” Saeed said.
FSD Pharma Betting Big on Cannabis
FSD Pharma is focused on the development of the indoor grown, pharmaceutical grade cannabis and on the research and development of cannabinoid-based treatments for several central nervous system disorders, including chronic pain, fibromyalgia and irritable bowel syndrome.
The company has 25,000 square feet available for production at its Ontario facility with an additional 220,000 square feet currently in development. Its facilities sit on 70 acres of land with 40 acres primed for development and an expansion capability of up to 3,896,000 square feet.
FSD subsidiary FV Pharma is a licensed producer under the Cannabis Act and Regulations. The company wants to transform its current headquarters in Cobourg, Ontario, into the largest hydroponic indoor grow facility in the world. It intends to cover all aspects of the industry, including cultivation, legal, processing, manufacturing, extracts and research and development.