LONDON: Kanabo Group Plc. (LON: KNB), a medical cannabis R&D Company that focuses on the distribution of cannabis-derived products for medical patients, and non-THC products for CBD consumers, announces it has formed a new, partly owned, subsidiary to monetise the Company’s Intellectual Property and that the new subsidiary has signed its first Memorandum of Understanding (“MoU”) for an indoor medical cannabis cultivation project in Spain.
Kanabo Agritec Ltd
Kanabo Group plc has formed an Israeli subsidiary company, Kanabo Agritec Ltd. (“Agritec”), which Kanabo Research Ltd, a wholly owned subsidiary of Kanabo Group plc., holds a 40% shareholding together with certain additional control rights over the strategic direction of the subsidiary
Agritec’s sole purpose is to enter into agreements with third parties at minimal cost to leverage the Company’s Intellectual Property for the cultivation, processing, and production of cannabis products.
The strategic rationale for Kanabo is twofold:
· Firstly, Agritec provides Kanabo with complementary near-term revenue opportunities
· Secondly, Agritec will offer Kanabo improved security of cannabis supply through a diverse range of suppliers, who will all adopt Kanabo’s high-quality manufacturing standards without Kanabo having to fund or become directly involved in cannabis cultivation.
Agritec’s three other shareholders are co-founders Ophir Shimshi and Eilon Bdil, experts in Cannabis regulation and cultivation and R. P. Growing Technologies Ltd., who each hold 20% of the issued share capital in Agritec.
R.P. Growing Technologies Ltd, is a Group of companies, which includes Grow Tec Innovations Ltd (2018) & We Can Dry Ltd (2018), which are both experienced in agricultural technology projects, providing a wide range of services, from planning, designing, engineering and/or manufacturing as well as complete turnkey projects and high-level agricultural projects in field of medical Cannabis.
Agritec, will be able to offer customers turnkey consulting services relating to the:
· Procurement, design and build of commercial scale medical cannabis cultivation facilities
· Supply high-quality genetics and standard operating procedures for optimal medical cannabis cultivation
· Provide post-harvest services including offtake agreements with Kanabo Group plc
· Design and draft reporting and documentation filing services with the local authorities
· Provide local training and ongoing consulting services
Agritec has signed its first MoU for the design, build and operation of a 4,000kg per annum indoor cultivation and processing facility in Madrid, Spain. The proposed facility is to be focused exclusively on medical cannabis.
As per the terms of the MoU, Agritec may may elect to receive up to 20% ownership of the Project based on the achievement of agreed milestones.