Alberta-based RMMI (RMMI.C) entered into a partnership with plants genetic tech company, SynerGenetics Bioscience, to develop novel hemp strains with high-CBD content and other hemp-derived cannabinoid cultivars, according to a press release.
This partnership comes on the wings of a previous transaction with SG signed yesterday in which RMMI agreed to buy up to one million kilograms of high-CBD hemp flower and biomass before signing on the dotted line for a definitive strategic alliance, which secured SG as RMMI’s only supplier of high-CBD genetics.
“Completion of the SG transaction is a significant step forward in executing on RMMI’s strategic shift into hemp processing and CBD extractions. This partnership with SG provides us with the expertise, relationships, premium high-CBD flower and biomass and exclusive genetics to create a vertically integrated platform from CBD seed to concentrates at scale,”said Peter Cheung, interim chief executive officer and chief financial officer.
SynerGenetics Bioscience is in the business of developing novel hemp strains with high-CBD content using genomic research and tech to produce hemp cultivars capable of providing 15%+ CBD content and less than 0.3% THC. They already have a genetic library with more than 20 novel strains under development.
SG Transaction Highlights:
- SG Transaction provides the basis for creating a platform focused on becoming the lowest cost producer of CBD concentrates and CBD flower for a rapidly expanding global market that is demonstrating an increasing demand for extracts and premium flower.
- One million kilograms of premium high-CBD hemp flower and biomass cultivated in 2020 contributed by SG on favourable terms to RMMI which is expected to yield between 60,000-70,000 kg of CBD concentrates.
- SG brings established relationships with farming partners in Ontario, Manitoba and B.C., which collectively have cultivated 1,325 acres of SG’s proprietary genetics for the 2020 season.
- SG’s management brings decades of combined experience in the breeding, cultivation and extraction of hemp biomass and concentrates
- Fully-integrated seed-to-sale business model in high-CBD hemp seeds, flower and concentrate production provides a diversified revenue stream for RMMI
- Significant alignment of interests with SG as SG will be receiving the majority of its total consideration for the Hemp contribution agreement and strategic alliance in common shares of RMMI and cash consideration tied to the sale of products
The deal includes providing a contribution of up to one million kilograms of premium hemp flower biomass with an anticipated average over 10% CBD with a minimum of 8% from SG. RMMI is paying for the deal with a mix of 22 million common shares and a payment of up to $13.6 million in cash.