Shineco (NASDAQ: TYHT) said it will cooperate with industrial hemp planting enterprise Heilongjiang Zhenye Agricultural Technology Development Co. Ltd. to establish the largest planting and processing base for industrial hemp in China.
Shineco subsidiary Tenjove NewHemp Biotech Co. Ltd. has signed a cooperation agreement and a letter of intent for a share purchase agreement with Zhenye.
Zhenye holds an industrial hemp planting record license. Through this cooperation, Tenjove NewHemp Biotech will provide Zhenye with quality strains for medicinal use jointly developed by the Chinese Academy of Agricultural Sciences and the guidance of advanced industrial hemp cultivation techniques.
Agreements and Opportunities
Under the agreement, Tenjove NewHemp Biotech is expected to provide Zhenye with planting techniques, training and guidence for industrial cannabis in the designated area.
Zhenye will provide land, equipment, labor, fertilizer, herbicides, insecticides, daily management and all procedures before delivery including, but not limited to, soil replacement, planting, watering, pest control, weeding, branch reduction, fertilization, harvesting, drying, clearing and others.
Under the terms of the agreement, all the hemp products that Zhenye has planted belong to TNB, and Zhenye is expected to deliver the processed industrial cannabis leaves and other parts to the designated warehouse.
Under the deal, Tenjove NewHemp Biotech is expected to acquire 100% shareholder equity, all tangible assets, and relevant information in Zhenye with a combination of shareholder equity and cash as consideration.
“We believe that, with the expansion of industrial hemp planting area and the active engagement of both sides, the civil and medical value of industrial hemp will be better appreciated in the future. New hemp biotechnology will also improve the development opportunities of industrial hemp industry, actively integrate relevant resources, and accelerate the implementation of the project,” Yuying Zhang, the CEO of of Shineco, said in a statement.