Farm Bill allows for mass hemp production in the U.S.

Invictus MD Strategies Corp. has entered into a binding letter of intent (LOI) to create a joint venture with Cannamerica Brands Corp. and CBDistribution Company Ltd. (CBDC).

The focus will be “acquiring hemp biomass for extraction into CBD isolate using purpose-built facilities for large scale CBD extraction,” reports Invictus, a global cannabis company offering a selection of products under a wide range of brands.

Subject to approval by the Invictus board and completion of satisfactory due diligence, the company intends to enter into a definitive joint venture agreement on or before Jan. 31, 2019, notes a company statement. Each party will receive a one-third share in exchange for their respective contribution:

Invictus will contribute a line of credit in the amount of $5 million, bearing an interest rate of five percent annually, which will be used to acquire extraction equipment, build out infrastructure and fund working capital;

CannAmerica, a pioneer in the science of cannabis extraction and post processing, will contribute operational expertise, will source the property, extraction equipment and staffing, and manage operations; and

CBDC will contribute the sourcing of hemp biomass procurement, branding, marketing and the commercialization of the finished product.

The announcement follows President Trump’s signing of the $867 billion Farm Bill, which allows for mass hemp—defined in the U.S. as cannabis with less than 0.3% THC—production in the country. The bill “recharacterized hemp from a Schedule 1 drug with high potential for abuse to the lowest-level listed drug (Schedule 5), which includes small doses of medicines, such as codeine,” thereby making production legal and allowing for the ability to move hemp across state lines.

“CBD, a non-psychoactive cannabinoid found in cannabis, has had a surge in popularity over the past couple of years based on its a huge range of potential health benefits and uses,” Invictus reports in a company statement.

“This partnership represents a great opportunity to continue expanding our footprint beyond Canada and capitalize on the United States’ federal legal framework that is now in place to produce and sell CBD,” says George Kveton, CEO of Invictus.

“This joint venture accelerates (CannAmerica’s) long-planned growth into the hemp-based CBD market following the passing of the Farm Bill, with extraordinary opportunities for expansion into new markets,” adds Dan Anglin, CEO and co-founder of CannAmerica, whose core strategy is to enhance and monetize the global reach of its existing brands and to pursue additional strategic acquisitions.

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