TORONTO--(BUSINESS WIRE)--Bophelo Bio Science & Wellness Pty Ltd (“Bophelo”), a company registered in the Kingdom of Lesotho, and a wholly-owned subisidary of Halo Labs Inc. (“Halo”) (NEO: HALO; OTCQX: AGEEF, Germany: A9KN), has entered into an offtake agreement (the “Agreement”) with Medcan Ltd (“Medcan”), a company incorporated in the Republic of Malta, for the sale of bulk cannabis biomass, primarily into the European market. The term of the Agreement is for a period commencing on August 3, 2020 and ending on the earlier of (i) the date on which Medcan has purchased the full specified volume biomass from Bophelo, or (ii) the 7th anniversary of the effective date.
The contract specifies initial deliveries of up to 10,000 kilograms. Initial shipments are expected to commence in the 4th quarter of 2020. Based on current European demand, Medcan anticipates taking delivery of the initial 10,000 kilograms by the end of 2021. Medcan will pay Bophelo within 15 days of receipt and acceptance of the product.
Bophelo has been working with Pharmaconsulta Limited, a Good Agricultural and Collection (“GACP”) accreditation specialist consulting firm, based in Malta, to obtain Maltese GACP certification, that Bophelo anticipates achieving prior to the end of 2020.
Bophelo will procure the transport of the biomass by a licensed cannabis transport operator. and deliver the biomass to Medcan in containers, complying with the applicable Agricultural Practice Standards, or as otherwise agreed to by the parties. All the biomass is subject to Medcan’s inspection and acceptance or rejection at Bophelo’s facility in Lesotho. Such inspections shall be conducted by a compliant laboratory.
Bophelo shall ensure that all bulk extract delivered to Medcan complies with the specifications agreed, insofar as each batch must provide a total THC concentration of at least 2%. This shall be verified by ensuring that each one gram of bulk extract yields a combined total of at least 120 milligrams of THC and THCA, using a pre-determined formula as contained in the Agreement. Bophelo currently has approximately 186 kilograms of clean, tested material, already packaged and stored in a secure vault. All material produced to date at Bophelo has tested completely clean with not a trace of pesticide, mold, fungus or heavy metals.
Pursuant to the Agreement, Medcan will pay Bophelo prevailing market rates, calculated on the basis of a price per gram, based on the delivery weight. The price will be determined on the basis that Medcan shall seek to sell the batch at the highest value achievable in the market, currently estimated to be $3.00 per gram. The bulk cannabis to be delivered includes A and B grade trimmed flower buds, as well as bulk material, consisting of trimmings and sugar leaves for processing into distillate.
Halo’s founders have known Medcan’s partner Kase Manufacturing located in California who played an instrumental role in setting up this contract.
Medcan is a closely-held private company, incorporated in the Republic of Malta, and led by an experienced management team with a proven track record of operating successfully in highly- regulated industries.
Medcan has successfully obtained a Letter of Intent issued by the government of Malta, that provides approval for the setting up of a business and industrial factory in Malta to carry out the production of medical cannabis in finished format.
Furthermore, Medcan is currently in the process of obtaining Good Manufacturing Practice (GMP) certification and fulfilling licensing requirements, following which it will be issued with a license to produce medical cannabis by the Malta Medicines Authority. This license will allow for the processing, manufacturing and distribution of marijuana for medicinal use by patients in Malta, as well as exportation of finished products to other countries worldwide, where its use is legal.
Medcan is setting up a state-of-the-art industrial facility and laboratory in Malta, that will be initially used for the trimming and repackaging of biomass and, in later stages, for the production of cannabis oil-based products. Medcan has partnered with Kase Manufacturing (https://www.kasemfg.com) to provide technology, expertise and management.
Halo is a leading cannabis cultivation, manufacturing, and distribution company that grows, extracts and processes quality cannabis flower, oils, and concentrates, and has sold over five million grams of oils and concentrates since inception. Additionally, Halo has continued to evolve its business through delivering value with its products, and now, via verticalization in key markets in the United States and Africa, with planned expansion into European and Canadian markets. With a consumer-centric focus, Halo markets innovative, branded, and private-label products across multiple product categories.
Recently, the Company acquired a dispensary permit in Los Angeles, and has entered into binding agreements to acquire UVI in California, three KushBar branded dispensaries, five development permits in Alberta Canada, and Canmart Limited, which holds wholesale distribution and special licenses allowing the import and distribution of cannabis-based products for medicinal use (CBPM’s) in the United Kingdom. Halo is led by a strong, diverse management team, with deep industry knowledge and blue-chip experience. The Company is currently operating in the United States in California, Oregon, and Nevada, while having an international presence in Lesotho within a planned 200-hectare cultivation zone via Bophelo Bioscience & Wellness (Pty) Ltd., as well as planned importation and distribution in the United Kingdom via Canmart.
For further information regarding Halo, see Halo’s disclosure documents on SEDAR at www.sedar.com.
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Halo’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Halo’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". The forward-looking information and forward-looking statements contained herein may include, but are not limited to, statements about the Agreement, the sale and distribution of cannabis pursuant to the Agreement, the reciept of licenses, approval and designations and Bophelo’s operations.
By identifying such information and statements in this manner, Halo is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, Halo has made certain assumptions. Although Halo believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Among others, the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: unexpected costs or delays in the completion of the Company's proposed dispensaries and other operation; negative results experienced by the Company as a result of general economic conditions or the ongoing COVID-19 pandemic; delays in the ability of the Company to obtain certain regulatory approvals; unforeseen delays or costs in the completion of the Company's construction projects; adverse changes to demand for cannabis products; ongoing projects by competitors that may impact the relative size of the Company’s growing operation; adverse changes in applicable laws; adverse changes in the application or enforcement of current laws, including those related to taxation; increasing costs of compliance with extensive government regulation; changes in general economic, business and political conditions, including changes in the financial markets; risks related to licensing, including the ability to obtain the requisite licenses or renew existing licenses for the Company's proposed operations; dependence upon third party service providers, skilled labor and other key inputs; and the other risks disclosed in the Company's annual information form dated April 16, 2020 and available on the Company’s profile at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Halo does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to Halo or persons acting on its behalf is expressly qualified in its entirety by this notice.