TGOD (TGOD.T) partners with a big European grower

On January 25, 2019 The Green Organic Dutchman (TGOD.T) announced that it has signed a deal with Knud Jepsen to establish two 50/50 joint ventures:

  1. Commercial production of cannabis and cannabis oils.
  2. Develop and patent elite cannabis genetics.

Weed companies typically sign deals with chocolate-makers, dispensaries, telemedicine app developers or branders.

Knud Jepsen is a horticulture company.

You know – they grow stuff.

In fact, Knud Jepsen is the world’s largest Kalanchoes breeder, distributing and selling more than 35 million plants in Europe and 90 million cuttings a year to over 75 countries.

To put that in perspective, Knud Jepson could hand-deliver a Kalanchoes-cutting to every living person in Denmark, Belgium, Croatia, Finland, Greece, Portugal and Serbia – and still have enough left over to give a cutting to every Canadian resident.

Kalanchoes are not the go-to plants for weddings receptions or Valentine’s day, but you do know these plants.

Kalanchoes are cultivated as ornamental houseplants. They are popular because they have extremely low water requirements, and come in a dazzling variety of flower colors.

Knud Jepsen has made significant horticultural innovations, like developing high ethylene resistance plants. That’s a big deal because Ethylene is a natural gas released from ripening fruits and vegetables, exhaust gas and cigarettes – and it makes plants wilt.

Founded in 1939, Knud Jepsen has 80 years of experience in all areas of horticulture ranging from genetics and breeding to international partnerships and developing global distribution networks.

With 520 global employees, Knud Jepsen operates an 880,000 sq. ft. flower and young plant production facility in Turkey, and a 700,000 sq. ft. facility in Vietnam specializing in producing cuttings belonging to the Queen Genetic assortment.

Knud Jepsen and TGOD will form both JVs in Denmark with a goal to expand the Production JV into future low-cost European jurisdictions.

The agreement outlines TGOD and Knud Jepsen‘s launch of a premium organic European bulk cannabinoid production platform.

According to this agreement TGOD will have the exclusive right to all cannabis-related production from the JV, through a guaranteed off-take agreement at a pre-determined price relative to the production cost of the JV.

The Production JV will have exclusive access to all intellectual property including elite cannabis genetics developed within the Genetics JV.

Knud Jepsen will run the day-to-day operations of the JV and TGOD will “leverage Knud Jepsen’s years of horticulture experience and science and R&D division to accelerate commercial operations in Denmark and throughout Europe.”

TGOD’s differentiated approach to organic cannabinoid production combined with Knud Jepsen’s large-scale commercial horticultural and globally integrated seed-to-sale operations will accelerate TGOD’s global initiatives.

“We are thrilled to officially enter the cannabis market with the signing of this definitive agreement with TGOD,” stated Frands Jepsen, Knud Jepsen’s CEO. “We will shift to strategic European locations with low-cost production.”

“This JV is incredibly important to furthering TGOD’s presence in Europe,” stated Brian Athaide, Director and CEO of TGOD. “Knud Jepsen is a remarkable partner, having over 80 years of experience in R&D and cultivating plants in millions of square feet. We will leverage Knud Jepsen’s expertise as operators, and our expertise in cannabis.

TGOD Q3, 2018 Highlights:

  • Deployed $33 million on construction facilities in Hamilton, Ontario and Valleyfield, Quebec
  • Commercial production in both facilities anticipated the first half of 2019.
  • Developing five new strains for medical and recreational markets
  • Commercial crop allocated to TGOD’s “Grower’s Circle” in January 2019.
  • Filed appeal with Hamilton planning department regarding a zoning amendment required to produce cannabis in its new 123,000sq ft hybrid facility.
  • Secured approvals from the City’s Agricultural and Rural Affairs Committee, the Planning Committee, the Ontario Federation of Agriculture.
  • Hamilton’s 2 existing facilities (total 27,000sq ft), already zoned to produce medical cannabis.
  • Invested in Jamaica, through Epican Medicinals. Existing retail sales in its Kingston store.  Planned expansion into four more retail stores. Expanding production capacity to 14,000 kgs.
  • HemPoland booked sales of CBD oil and other industrial hemp products across Europe
  • Anticipates 170,000 kgs of annual cannabis capacity across Canada and Jamaica.
  • Has developed both THC and CBD beverage formulations
  • JV’d with one of largest pharmaceutical distributors in Mexico.
  • Radically expanded operations, administration and marketing infrastructure.

On January 28, 2019 commented on the Greek Ministry of Agriculture‘s press release and CNN‘s (Greece) coverage related to TGOD’s proposed Greece operations.

Qq  The press release contemplates a significant investment in the development of the pharmaceutical hemp and cannabis sector within Greece and highlights an up to $74 million-euro investment, 34-acre property in Thebes, and a multi-phased large-scale state-of-the-art cannabis cultivation facility. qq

While TGOD “cannot comment on the specifics of its application”, it does plan to construct and commission a multi-phased facility, subject to Licensing from The Greek Government.”

Athaide states that the JV partnership with Knud Jepsen will “allow TGOD to focus on building global sales and distribution channels, developing proprietary and patentable IP, and furthering brand equity.”

Full Disclosure:  TGOD is an Equity Guru marketing client, and we own the stock.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

The Green Organic Dutchman

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