Richmond-based Benchmark Botanics, Inc. (CSE:BBT) (OTC:BHHKF) (FSE: BBW) just announced that it has signed a definitive agreement with Zhejiang Yatai Pharmaceutical Co. Ltd. based in China. Benchmark Botanics is a federally licensed producer and distributor of medical-grade cannabis. Both firms have agreed to set up a joint venture company in Canada. However, this is subject to compliance with relevant Canadian Cannabis Laws. The new company will explore opportunities in cultivation, processing, manufacture, and marketing of various CBD products.
In a statement about the agreement, the CEO of Benchmark Botanics, William Ying said, “This agreement with Zhejiang Yatai is a significant milestone for Benchmark Botanics. Zhejiang Yatai is a Top 500 Chinese corporation and a leader and innovator in the pharmaceutical industry. Benchmark is the perfect partner to take Zhejiang Yatai’s drug research and development, production and sales in the pharmaceutical field and synergize with Benchmark’s expertise in cannabis cultivation and extraction.”
The definitive investment cooperation agreement was signed on May, 27, 2019. Consequently, the new company will have C$14 million share capital of which C$7 million will come from Zhejiang Yatai giving it a 50% stake in the new company. Benchmark Botanics will use the existing Health Canada licenses issued to its subsidiary, Potanicals Green Growers to apply for a license for the property to be acquired by the new company which will be utilized for cannabis cultivation, processing, and sale. In return, Benchmark Botanics will get a 25% stake in the new company (equivalent in cash to C$3.5 million). The remaining 25% stake in the new company will be owned by Rippington Investment.
It is speculated that the name will be YATAI & BBT Biotech Ltd. Yatai Pharmaceutical will also be making its contributions in two stages; an initial C$4 million and subsequent C$3 million. One area the company hopes dominate is the production of high purity CBD-based cannabinoid extraction as well as purification and separation.
In reaction to the agreement, Chairman of Yatai Pharmaceutical, Mr. Chen said, “We are extremely happy to have signed this agreement with Benchmark Botanics and look forward to capitalizing on the medical applications of CBD. We are delighted to have partnered with a quality organization that shares the same standards as well as philosophy rooted in science to produce unique, safe, and quality products. We will utilize all of our expertise and resources to maximize our efforts to build the company’s value and a long-term successful joint venture.”
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