Crop Infrastructure Corp (CSE:CROP, OTCMKTS:CRXPF) has unveiled the C$1mln acquisition of US distribution and Italian rights for 50 cannabis wellness products from The Yield Growth Corp.
The agreement grants CROP the licence to infuse Yield Growth subsidiary Juve Wellness Inc’s products with high CBD / low THC cannabis and exclusively distribute the products in Italy for three years, with annual renewals on achieving certain sales.
The company is also acquiring the non-exclusive rights to distribute the line of hemp root oil based Juve products in the US.
Juve has registered 25 of its products with Health Canada and has submitted 10 provisional patent applications in the United States for its formulas and extraction process.
Juve plans to launch its products for Canadian retail distribution in early 2019.
Crop provides financing for large-scale greenhouse projects.
According to one research study, by 2027, worldwide sales of legal cannabis are forecast to reach US$57bn.
During that period, spending in North America is expected to leap from US$9.2bn to US$47.3bn, driven mainly by recreational use.
"We are thrilled to be aligned with Crop Infrastructure Corp. to infuse with cannabis and distribute our extensive line of wellness products throughout Italy," said Penny Green, president and chief executive of Yield Growth.
She added: "CROP is at the forefront of the burgeoning Cannabis industry as it now seeks to move beyond the State of Washington and California with this deal as its entry into the European cannabis market."
Michael Yorke, chief executive at CROP Infrastructure, added: "This acquisition will be complementary to our efforts of expanding our operations into Europe.
"We also look forward to bringing this suite of new offerings to our tenant growers and their distribution in Washington and California and as we continue to expand into other States.”
Under the terms, Yield Growth will receive C$1mln for the Italian licence and distribution rights through issuing 2.5mln units of CROP at a deemed price of C$0.40 per unit.
Each unit will consist of one CROP share and one half warrant to purchase one further share at an exercise price of C$0.55 per share for 18 months.
In addition to the C$1mln unit issuance to Yield Growth, CROP intends to complete a private placing for C$200,000 worth of additional units to pay for marketing expenses.