Crop Infrastructure’s (CROP.C) 49% owned subsidiary, Elite Ventures, is partnering with MYM Nutraceuticals (MYM.C) to farm 120 acres of cannabidiol-rich hemp in Nevada.
This partnership marks Crop Infrastructure’s third foray into the Nevada market for cannabis, bringing their total acreage to 3,235.
The estimated hemp production from the MYM parcel is 120,000 pounds per harvest with a CBD level of 10 to 19%. The anticipated potential revenue from the venture is $26 million and MYM will take home half of that minus what they absorb in processing and sales fees.
Since United States federal regulation impedes the involvement of mainstream lenders in the cannabis-space, Crop Infrastructure has gone the unusual but lucrative route of private financing, providing capital and access for cash, and a stake of the proceeds.
In this case, MYM will finance Elite with USD$500,000 for the rights to 50% of CBD-rich hemp grown on the 120-acre farm. In return, Elite will provide all the necessary capital and supplies, as well as plant, grow and harvest the hemp.
At a macro-level, the CROP business model is to invest capital in land and equipment to increase weed operators’ growth. It’s basically a cannabis-specific Real Estate Investment Trust (REIT).
CROP invests in producers and processors through lease programs and fee-based management options,” wrote Equity.Guru’s own Lukas Kane in February.
If MYM requests it, Elite has also agreed to take on the processing and sale of the biomass.
What is MYM Nutraceuticals?
MYM Nutraceuticals is a Canadian medical cannabis company focused on acquiring assets in the technology, nutraceuticals and CBD sectors.
In addition to the Nevada location, MYM has a global footprint that spans three countries, including a 1.5 million square foot grow facility in Quebec and an operation in Australia.
“This is very significant partnership arrangement with Vancouver-based MYM Nutraceuticals, which has operations in three countries and will bring additional exposure to our organic hemp products,” Crop CEO Michael Yorke said.
Earlier this year, Crop announced that Elite had completed their Nevada-based 1,600 square foot genetics, tissue culturing and micropropagation laboratory.
The lab will provide 10 million plant starts for the company’s 2,115 acres of CBD farm and save them $3 million in seed and planting costs for the 2019 season.
In addition to their assets in Nevada, Crop has expanded their footprint to include two operations in Washington and two in California. The company has recently sold their holdings in Italy and Jamaica, bringing home more than $2 million.
Shares slid CAD$0.03 to rest at $0.31 per share by end of trading.
Currently the company has 154,058,727 issued and outstanding shares with a market cap of $48.5 million.
–Joseph Morton
Full disclosure: Crop Infrastructure is an Equity.Guru marketing client.