A Canadian marijuana producer has announced it’s shifting to processing and extracting hemp biomass into CBD concentrates by signing a purchase agreement with a leading supplier of high-CBD industrial hemp.
Calgary-based RMMI Corp. announced Tuesday it plans to buy 300,000 pounds of high-CBD hemp biomass from Clearwater CannaGrow Ltd. for $4,800,000. The payment will come through the issuance of 10,222,222 common shares of RMMI and a deferred payment in cash of $2,500,000.
RMMI said it expects to close the hemp purchase by June 12.
In announcing the deal, RMMI said it is shifting its business model “away from the capital-intensive business of cultivation in a market that is experiencing deteriorating economics for cannabis flower.”
RMMI said it wants to become “the lowest-cost producer of CBD concentrates for a rapidly expanding global market that is demonstrating an increasing demand for extracts.”
The agreement also give RMMI the option to acquire Clearwater on or before Sept. 30. Clearwater is expected to have 1,000,000 pounds of industrial hemp with an average of 10% CBD by Oct. 31.
Based in British Columbia, Clearwater has more than 984 acres of licensed hemp cultivation lands in Alberta and British Columbia. It says it has supplied hemp biomass and CBD concentrates to some of Canada’s largest producers for several years.
RMMI trades on the Canadian Securities Exchange as RMMI.
