FSD Pharma enters into five-year supply and loan agreement with two companies

FSD Pharma Inc. has entered into a supply and loan agreement with Canntab Therapeutics Ltd. and World Class Extractions Inc. to purchase hemp flower from supplier Thomas Elcome.

“The anticipated purchase price for the 2019 crop is $1 million, plus applicable taxes. Of this amount, $500,000 will be paid by the purchasers as a loan to the supplier in the form of equipment, to be paid back in the form of hemp,” reports FSD Pharma, a licensed producer focused on developing high-quality, indoor-grown, pharmaceutical-grade cannabis and on the research and development of novel cannabinoid-based treatments.

 

 

Starting in 2019, the purchasers will be able to buy the crop at “a purchase price of $100 per kg per one percent of CBD extracted from the flower,” notes the company statement.

FSD’s announcement follows an earlier announcement Feb. 12 that it “had entered into a three-way supply agreement with Canntab, World Class and the supplier to purchase up to 1,000 kg of the supplier’s 2018 organic hemp crop,” the press release states.

“As with the 2018 hemp crop purchase, the purchasers intend to extract CBD oil from the 2019 to 2024 organic hemp crops and process the oil into gel capsules and tablets at the FSD facility in Cobourg, Ont.,” the statement adds.

“We intend to take full advantage of the option to purchase up to the maximum total value of organic hemp from Mr. Elcome over the next five years beginning with the purchase of $1 million of organic hemp in 2019,” says Dr. Raza Bokhari, FSD’s executive co-chairman and interim CEO.

Pointing out that the North America hemp industry looks to be growing into a multi-billion dollar sector, “our processing licence, received last week, allows FSD to work with Canntab and World Class to process the hemp product into CBD oil, a significant saleable product that can be converted into gel capsules and tablets. Once the edibles legislation is in place later this year in Canada, as we anticipate, FSD will be ready to process and supply the market,” Bokhari notes.

 

 

“This latest supply agreement will provide us with a significant amount of CBD oil over the next five years, which is required to manufacture our extensive suite of products for sale upon approval by Health Canada,” notes Jeffrey Renwick, CEO of Canntab, a Canadian cannabis oral dosage formulation company based in Markham, Ont.

“This is yet another important supply agreement for World Class as it provides us with several years of raw hemp supply that we intend to process into CBD-enriched oil and extracts at the FSD facility,” says Michael McCombie, CEO of World Class, a Canadian company that has developed a unique extraction process to produce quality, potent cannabis extracts. World Class is also “preparing for the next stage of growth for our company as we await approval for our CSE listing,” McCombie adds.

 

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