Lifestyle Delivery Systems (CSE: LDS) (OTCQX: LDSYF) (Frankfurt: LD6) has signed a letter of intent with National Green Biomed Ltd. (NGB) to build a new manufacture plant in Mission, British Columbia, Canada.
The new facility will be used to manufacture CannaStrips, a cannabis consumption method without the negative effects of smoking. Each strip has a consistent dosage and allows for a comfortable delivery system.
Joint Venture for CannaStrips Plant
The LOI solidifies the intentions of both parties to continue to work towards the entry into a definitive agreement for joint venture to build a manufacturing facility in British Columbia to produce CannaStrips.
Under the terms outlined in the LOI, the parties will work to create a joint venture that will build a manufacturing facility in Mission to produce CannaStrips.
NGB will provide an extension of its Rosebud Health Canada License to the JV and land for the new facility to manufacture CannaStrips. LDS will invest a total of C$255,000 in a private placement for shares of common stock of NGB at $0.30 per share.
In addition to the funds invested as part of the private placement, LDS will be responsible for paying for the permits, design, and build-out of the facility, and will share the consulting expenses associated with the Health Canada licensing.
NGB will receive a royalty on all sales from the Mission facility, specifically, a 5% royalty for sales in Canada and a 3% royalty on all sales outside of Canada. The Mission facility will be required to purchase raw material from NGB and provide custom processing for future products or business opportunities presented by NGB.
NGB also agrees to sell a 50% stake in one of its’ 25-acre parcels to LDS for $375,000. LDS will be able to build its facility on up to two acres of this parcel.
NGB will retain the right to choose uses for the balance of the 23 acres but will work closely with LDS to find uses suitable and profitable for both parties. These uses may include, but will not be limited to, the growing of cannabis for use as feedstock for the LDS facility which will be then sold to LDS at a discounted price to what the general market bears.
“The establishment of a Canadian CannaStrips manufacturing and distribution facility has been a goal of the Company for some time,” Brad Eckenweiler, the CEO of LDS, stated.
“Our agreement with NGB has put the Company on a path to accomplish this goal in 2019. Hopefully, with this agreement and favorable legislation in the near future CannaStrips can be shipped around the globe. I don’t believe there is another delivery system better suited to overcoming the challenges of the social perception associated with traditional cannabis consumption and the concerns of unintended sharing of cannabinoids with others nearby,” Eckenweiler added.
Richmond, B.C.-based NGB is a late stage applicant for licensed production under the 2018 Cannabis Act.
The company, with a 18,000 sq ft facility in Richmond and 68-acre property in Mission, is poised for the next phase and is preparing for site development construction to begin this year. The company is well situated to service Greater Vancouver; the facility is within 15 minutes of the Vancouver International Airport and only 30 minutes from downtown Vancouver.
NGB has a research and development component and has committed to donating $1 million to UBC to investigate Cannabis for HIV/AIDS, pain management, and addressing the opioid crisis within Canada.
The company is committed to producing health and lifestyle products, staking their claim in the burgeoning industry for CBD, edibles, and boutique coconut-based products.