VANCOUVER, BC / ACCESSWIRE / June 20, 2019 / EastWest Bioscience (the "Company" or "EastWest") (TSX.V: EAST) announces that, further to its News Release on April 30th, 2019 that the Company has signed a Definitive Agreement with Azema Sciences Inc. ("Azema" or "Azema Sciences") to Joint Venture on a preferred supply and distribution agreement, specifically for the supply of bulk CBD and finished CBD products, and distribution throughout the US and Globally.
EastWest is entering into a Joint Venture with Azema, securing for EastWest first rights on Azema's output of bulk CBD and finished CBD products which are ready for sale in the USA and globally. EastWest Science USA ("EastWest USA"), EastWest's US operating division, will be the preferred purchaser and distributor for Azema's finished goods. These finished products will include CBD creams, tinctures and salves, which are complementary products to EastWest's existing catalogue. Additionally, EastWest will have first right of refusal to all potential opportunities relating to Azema's Kentucky based CBD processing facility.
Situated on a wholly owned 6-acre property, which is currently home to its 18,000sf CBD processing facility, Azema Sciences is one of approximately 110 licensed Hemp processors in Kentucky. The Joint Venture specifies exclusive access for EastWest USA to 9000sf of Azema's facility, which will co-locate EastWest USA with Azema's CBD processing, tincture bottling and logistics operations. Co-locating provides EastWest USA with the real estate and resources to build out its own Nutraceutical manufacturing adjacent to Azema's CBD operations, providing significant efficiencies to its logistics and warehousing of product.
"Integrating our operations tightly with Azema's makes sense, as it will provide EastWest USA with many benefits, such as flexibility of raw material supply and direct shipping to retail wholesale distributors. While also ensuring a stable source of CBD material necessary for EastWest USA's expected rapid expansion." states Rodney Gelineau, CEO of EastWest Bioscience.
With operations based in Lebanon, Kentucky, Azema Sciences is situated in the heart of Kentucky's Hemp country, with an estimated 80% of the state's CBD Hemp farming within 100 miles of the facility. Kentucky's licensed Hemp production grew to more than 42,000 open air acres and around 66 greenhouse acres in 2019. This growth is due mainly to strong commercial support from the Kentucky Department of Agriculture, being one of the first states to embrace pilot hemp programs allowing tobacco farmers to transition to hemp, and the direct political support of state legislators, Senate Majority Leader Mitch McConnell who introduced the hemp Farming Act of 2018 that was contained within the 2018 Farm Bill.
EastWest is focused and actively working on consumer products in anticipation of widespread approval of CBD product availability to exploit its extensive catalogue of products for formulation with CBD where it is beneficial. The partnership with Azema will ensure that EastWest will have an ongoing supply of CBD to fulfill its manufacturing requirements for the US market.
"Partnering with Azema Sciences will provide EastWest a significant opportunity to take its data from its Canadian health food customers and allow Eastwest the unique and early opportunity to take the benefits from CBD and integrate it in unique products," continues Gelineau, "Partnering with a manufacturer of CBD in the heart of Kentucky Hemp country is a major step toward achieving our fully integrated target in the US, and vital to delivering our four lines of consumer products: nutraceuticals, pet products, functional foods and health and beauty products to the biggest CBD market in the world."