Hong Kong-listed contractor turned blockchain investor Grandshores Technology — backed by the Hangzhou municipal government — plans to enter the medicinal and industrial cannabis market in a bid to counter the adverse impact of crypto winter. The development was revealed in a report from local English-language newspaper the South China Morning Post on May 2.

The firm’s co-chairman Yao Yongjie has reportedly stated that industrial cannabis cultivation will become the company’s new business focus, drawing on resources previously reserved for global blockchain investment.

Yao — a founding partner of the local government-backed Hangzhou Grandshores Fund — spoke with SCMP shortly after a stock exchange filing with the Hong Kong Stock Exchange indicated that Grandshores Technology’s recently-invested Hangzhou unit had signed a cooperation agreement with a hemp research institute in the province of Heilongjiang.

The cooperation agreement determines that the parties will jointly develop a minimum of five varieties of hemp germplasm — at least two of which will be developed as medicinal cannabis products. Yao is cited by SCMP as saying that:

“Both blockchain and industrial cannabis are the future, and both are embraced by the younger generation [...] we are always on the search for new business growth opportunities.”

As SCMP notes, the cooperation agreement comes even as Grandshores Technology is still in the midst of finalizing its 40% equity stake investment in the aforementioned Hangzhou unit — called Hangzhou Yupu Trading, which holds the rights to use 1,600 kilograms of particular cannabis seeds cultivated at the Heilongjiang hemp research institute.

As previously reported, Yao is also one of the founding partners of the Hangzhou government backed Grandshores Blockchain Fund, which unveiled stablecoin development plans last fall.

According to SCMP, he is also an earlier investor in Chinese crypto mining giant Canaan Technologies, which attempted to raise a Hong Kong flotation of as high as $1 billion, but failed, when the filing formally lapsed in November 2018.