Village Farms International (VFF.Q) announced yesterday that they have signed into a binding agreement to buy 6.6% of one of the Asia-Pacific’s leading cannabinoid platforms, Altum International Pty.
Naturally, the closure of the deal will be subject to the completion of certain conditions, which haven’t yet been finalized and are expected to be completed sometime in the next several weeks. What is known is that Village Farms will have the option to increase its ownership in Altum if it should so choose.
“Village Farms is at a place where, with well-established North American operations, continuously refined and enhanced for optimized performance and growth, we are able to turn our attention to strategic, early-stage international opportunities where CBD and cannabis are being legalized in our pursuit of well-researched capital allocation for the generation of outsized, long-term returns,” said Michael DeGiglio, CEO of Village Farms International.
Altum is focused on spreading cannabinoids, and specifically CBD, to consumers across the Asia-Pacific region via a platform that facilitates large-scale importation, distribution and marketing for CBD. The platform will consist of three channels, with each focusing on the unique regulatory requirements of each country:
- Proprietary Consumer Brands – Fully-owned consumer brands, currently consisting of Felix and Co (www.felixandco.com), Kind Cannabis and tsubomi;
- Commercial Inputs – A range of cost-competitive, compliant and effective premium CBD ingredients through its LIFE brand (www.lifecbd.asia), designed for seamless addition to foods, beverages, cosmetics and other consumer packaged goods; and,
- Retail – Retail sales and educational and experiential stores for both Altum and partner products.
Altum’s primary geographic focus has been their opportunities in Hong Kong, which benefits from one of the most progressive pro-CBD attitudes and regulatory regimes in the Asia-Pacific region. The company has CBD products under its Felix and Co brand, and received positive customer feedback and sales.
They’re also looking at Australia and New Zealand as potential targets for their high-THC medical cannabis. It’s legal in both countries, and the company intends to chase after the recreational cannabis market in both countries if they vote to legalize it in the upcoming September 19th, 2020, referendum. Their presence in New Zealand includes a 49% interest in Kariki Pharma Limited, a medicinal cannabis company working on creating a line of pharma-quality medical cannabis products to sell in the New Zealand, Australian, Asian and European export markets.
“With approximately 4.5 billion people – more than four times that of the U.S., Canada and Europe combined – the Asia-Pacific market represents one such sizeable but nascent opportunity, with the addressable market for cannabis alone forecast to reach US$10 billion by 2024. Altum is an outstanding organization at the very forefront of the emerging CBD industry in the Asia-Pacific region and represents a capital efficient means by which to participate in this significant opportunity, as well as the legal medical, and potentially the legal recreational, cannabis markets in Australia and New Zealand,” said DeGiglio.
Altum’s products extend to include supplying craft brewers to make CBD-infused beer, coffee chains and juice bars for beverages and edibles, and they’re presently in discussions to forge supply agreements for a wide array of products, including pet food and cosmetics verticals, and also CBD-infused spa products for hotels.
“For a year now, we have watched Altum successfully execute on its business plan and now very much look forward to working collaboratively with Altum’s exceptional leadership team, with its deep experience throughout the Asia-Pacific region, including extensive consumer packaged goods experience, and the vision, plan and capability to be the leader throughout this market. We also look forward to exploring the numerous synergistic opportunities that exist amongst our businesses,” said DeGiglio.
Earlier this year, Altum opened Found, a cafe and retail concept store in Hong Kong dedicated. It’s Asia’s first store decided to CBD. The company intends on expanding this business strategy throughout the Asia-Pacific region, specifically gearing towards greater China, Japan, South Korea, Thailand, Australia and New Zealand. Their short term goal, specifically 12 months, is to be available commercially in three other countries.
—Joseph Morton
