Good News . Getting All There Ducks In A Row Vancouver, BC / May 16th, 2019 / EastWest Bioscience (the “Company” or “EastWest”) (TSX.V: EAST) announces that on May 13, 2019 they signed a Letter of Intent to joint venture with Continental Agro Trade Corporation (“Continental”) to secure a ready stockpile of Hemp flower containing CBD for EastWest’s production of high-grade CBD isolate. This stockpiled Hemp supply will be ready for processing into CBD isolate within EastWest’s Penticton Facility immediately upon approval for EastWest’s Cannabis Processor license.
Continental will be joint venturing to provide harvested hemp flower containing CBD exclusively to EastWest. The strategic alliance further solidifies EastWest’s vertically integrated seed-to-sale strategy and secures the Company’s supply of hemp flower to produce CBD isolate, a required ingredient for the CBD consumer products under development.
On October 17, 2018, the Cannabis Act came into force which stated that the legal sale of edible cannabis, cannabis extracts, and cannabis topicals will be permitted no later than October 17, 2019. It currently appears market demand for CBD is going to be higher than anticipated and media suggests supply will be limited in October when edible cannabis, cannabis extracts and cannabis topicals will be permitted. In anticipation of retail stores being able to market CBD products, EastWest is preparing its retail chain Sangster’s to carry a variety of CBD products under the Sangster’s brand as well as EastWest’s own house branded products.
The Sangster’s acquisition brought to the Company an extensive catalogue of NPNs (Natural Product Numbers) and valuable consumer behavior data. Combining this with the Company’s current CBD product development in the US, its ability to manufacture short runs of new formulations in Canada through Orchard Vale Naturals, EastWest is well positioned to offer consumer CBD products that have been market tested in the US and manufactured in Canada.
This joint venture mirrors the vertical strategy the Company is taking in the USA, by securing supply of high-quality CBD hemp flower, extracting CBD derivatives and manufacturing CBD consumer products within its own group of companies.
“Together with EastWest’s brands, manufacturing and US operations, securing this agreement with Continental for our Canadian CBD processing plans is a big win for the Company,” states Rodney Gelineau, CEO of EastWest, “It is a definite win for the company and moves us further toward CBD production in Penticton, BC.”
A period of negotiation and exchange of information is required to finalize terms and the definitive and binding Joint Venture Agreement will be complete on or about June 30, 2019.